Moving
Average Price (MAP) and Physical Inventory:
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Moving
Average Price:
Concept:
We all know material will be evaluated at plant/Company code level and once you
evaluate the price for the material, we need to update in the material master-
based on material type. If the material is Finished good, then material price
will be moving average price and semi-finished goods may have standard price
indicator in material master.
For finished goods, its good to have moving average price
because as per the market value the price will change daily.
For semi-finished goods they cannot be changed daily because
it’s not a product, mainly it’s a consumable material which will use for
support product and it’s a standard price.
Example:
In our country when ever the budget
proposal happens, then they will decide whether this finished goods price
should be decreased or not, but they will not worry about consumable materials
Note: We are doing all above things to know the report of
spends and correct GL hitting after posting MIGO for a material.
When we are updating price in material master, these things
will keep in mind and update the price indicator respectively because its
effecting the GL accounts in background.
If you have knowledge on account determination, then the
above scenario will affect the PRD transaction key- Price difference account.
How it works:
Once we are maintaining the material then we are updating
price control as V or S.
After updating how the price will change for price indicator
V-Moving average price, this filed in material master will change daily if we
are doing MIGO with the combination of material and plant.
For standard price the price will not change automatically,
if required we need to change it manually.
How price is changing for V (Moving average price)-in
material master:
Here the price needs to change whenever the MIGO was done
for PO
We have one standard formula that on what basis, the price
will change in material master.
Previous
MAP * Previous stock + PO price per quantity * GR Quantity
MAP= ---------------------------------------------------------------------------------------------
Previous stock + GR
Quantity
Check out the formula
Note 1: Where check the previous MAP price in
material master for that material and in the same screen we can find out the
stock present for that material.
Note 2: Once you get that information then
check the current PO price per quantity and GR quantity.
If you are creating PO, then take that info like if you are
creating PO now for 100 quantity where per 1 quantity is 10 EUR then GR
quantity as 100.
Note 3: Check the previous stock for that
material in material master and GR quantity that you are doing now.
Example: lets think previous MAP is 10 and previous stock is
125 and current PO price is 15 with current GR quantity as 100
Now for denominator- Old GR quantity is 120 and new GR
quantity is 100
10 * 125 + 15 * 100
MAP= ----------------------------------------------------
=12.22
125+100
The new price is 12.22 EUR
Now check the material master price in that material- Moving
average price – the price will be 12.22 EUR.
Physical
Inventory:
Every company will have stock of materials in warehouse for
there production activities and everyday the respective persons needs to update
the entry and exit of stock in the plant and sometimes it may affect the
production if we are not doing this properly.
Example: we all know PR’s will be created by System and
manually but if incise system wants to create PR then it will check the level
of stock in plant and once the level of stock decreases then automatically
system will create PR for that material. To do that correctly the system stock
should be updated correctly and there are many scenarios that people tends to
forget the updating the inventory with correct numbers and for that SAP has
been recommended the physical inventory.
If the level of stock decreases by 50% then system will
create auto PR’s with fixed vendors.
End of the day of physical inventory both the stocks needs
to match -if not we will post the differences and match it in SAP.
Physical Inventory:
the concept is the
warehouse stock should match with physical stock in plant and this counting
will be done manually in plant.
Overview:
Every company they
will follow this physical inventory process and its recommended by SAP to do,
like for every 3 months or 6 months this physical inventory check should happen
and this is the process done in SAP and warehouse persons will update and
provide the stock to respective person to update in SAP.
Few companies they will check this physical inventory
monthly because they don’t to be in trouble of production loss.
Procedure:
This activity mostly done in weekends and once we are doing
this will mark freeze option or block option to avoid incorrect count in
physical inventory.
Once we are decided to check for physical inventory then
respective team will open T-code MI01 and create a physical inventory.
Create Physical Inventory: MI01---
Where we
will enter the plant, material and storage location and save the screen
Now the physical inventory has been created.
1.
Posting Block:
We are marking posting block indicator such
that there will be no inventory postings done in SAP before completing this
physical inventory for this material.
If the physical inventory is taking 10
days, then up to 10 days there will be no postings done in SAP.
2.
Freeze book inventory:
If we select this option, then system will
allow for postings in SAP, but the physical inventory number will be frozen or
locked with that number such that there will be no difference in number of counts.
Most of the companies will prefer this
option because we don’t know how much time it may take for counting.
Print Physical Inventory: MI21
Enter physical documentary number and execute, so that it
will allow you to print.
Whatever they created for material they need to segregate as
per the material group wise and take a printout of that what we created.
Once we have taken the print of that physical inventory then
we need to send that print to the respective warehouse person then they will
count and update in paper that stock is this much.
Enter count for Physical Inventory: MI04
Once we get the count from the warehouse person, then the
count needs to be entered in the system as per the material through MI04.
Update the physical inventory number and execute then it
will show the material then update the quantity in quantity field and save the
screen.
MI05- if we need to correct the number what they have
updated then we can update it.
Post Physical inventory: MI07
Once you have posted above step now, we need to do the
posting the difference.
Go to MI07 and enter the physical inventory number then
system will automatically show the difference in quantity and just check with
original quantity in system then post the differences -Save
Here we have only 2 cases the quantity in the physical stock
is more than the system stock
Quantity in the system stock is more than the physical stock
Or else both the stocks are matching with correct quantity.
Here once we are posting the differences the system will
automatically generates the movement types accordingly.
Movement types-
701/702- Unrestricted Stock
703/704- Quality Inspection
707/708- Blocked Stock
System will automatically pick up as per the stock selected
in MI01- here we have 3 options to select that physical inventory needs to be
done from which stock.
701- Goods receipt for Warehouse Unrestricted stock
It Means
Counting stock is more than System stock
702- Goods issue for Warehouse Unrestricted stock
It Means
System stock is more than Counting stock
703- Goods receipt for Warehouse QI stock
It Means Counting stock is more
than System stock
704- Goods issue for Warehouse QI stock
It Means Counting stock is more
than System stock
707- Goods receipt for Warehouse Blocked stock
It Means Counting stock is more
than System stock
708- Goods issue for Warehouse QI stock
It Means Counting stock is more
than System stock
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