Weighted Average FIS Inventory Price

Relevant to: Buyers

Navigation Tree: Transactions > Inventory

AgriDigital has completely automated the process of calculating a Weighted Average FIS (Free in Store) price for all of your inventory positions. This exciting new feature live updates based on every delivery into an inventory position and provides a true cost of execution per delivery.

The Weighted Average FIS Purchase Price metric is displayed in the Inventory features' table within the Transactions module.

We calculate the Weighted Average FIS Price by:

1. Considering every inventory movement into each stack and calculating the FIS Adjusted cost of that movement. See this article for the FIS Adjusted Price Calc.
2. Calculating the weighted average of the stack based on the new inventory movement value and quantity and the stack's existing Weighted Average FIS price and quantity.
3. Assuming that all movements out of the stack do not affect the Weighted Average FIS price because out-turns are valued at the current Weighted Average FIS Purchase Price.

There are unique scenarios where we must calculate the weighted average differently.

These scenarios occur when the stack quantity is negative before or after an inventory movement (Ex. 1), when the inventory movement can't be valued (Ex. 2), or when inventory movements that have affected the Average get reversed (Ex. 3).

For example:

   1) Negative inventory quantity scenarios:

1. If the inventory quantity becomes negative or more negative after a movement out of the stack, the Weighted Average FIS Price of the stack is equal to the Weighted Average FIS Price before the movement occurred.
2. If the inventory position receives a movement into the stack, but the quantity remains negative, then the Weighted Average FIS Price is equal to the FIS Adjusted price of the individual movement in.
3. If the quantity is negative but then a movement into the stack occurs such that the new quantity is positive, the Weighted Average FIS price of the stack will be equal to the FIS Adjusted price of the movement, and the quantity will be the remaining positive quantity. 

   2) Inventory Movements with unknown values:

1. If the movement occurs into an empty stack, then the value of the stack will be 0 until a movement with a value occurs into the stack. At that point, the unvalued inventory movement gets assigned the same FIS Adjusted price as the first valued movement.
2. If the movement occurs into a stack with an existing Weighted Average FIS price, then the movement gets assigned the existing Weighted Average FIS Price so that the unknown movement does not affect the value.
3. If the movement occurs, but later, information is edited such that the FIS Adjusted price can be calculated, then the Weighted Average FIS for the stack is recalculated.

   3) Reversals:

1. If a delivery, transfer or other movement type that affects the inventory Weighted Average FIS prices gets reversed, then the Weighted Average FIS Price gets re-calculated as if the movement that was reversed never happened.

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Note:  The valuations are subject to change upon users completing twin deliveries, editing data, and reversing data. If you would like to know more information on how a particular FIS Adj. Price was calculated, please contact the support team.
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