3.3.5.1 Create Inventory Ordering Module Beginning inventory

saranshsaini
Occasional Contributor

3.3.5.1 Create Inventory Ordering Module Beginning inventory

My beginning inventory is in Negative. Why is this happening? Is there anything wrong with Beginning inventory or ending inventory formula? I have attached screenshots.

1 ACCEPTED SOLUTION

Accepted Solutions
JaredDolich
Moderator

Re: 3.3.5.1 Create Inventory Ordering Module Beginning inventory

@saranshsaini 

@MarkWarren is correct but there's a little more to the story.

This is called an inventory balance set. Ending Inventory = Beginning Inventory + Receipts - Sales.  If you have Sales set, but no Receipts then your inventory will keep going down, even negative. This obviously can't happen in the real world because sales would stop if you run out of inventory (stock outs). Once you start loading your receipts this will fix itself.

In short, your formula is correct but this model is "simplified" for learning purposes. 


Jared Dolich

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3 REPLIES 3
MarkWarren
Expert

Re: 3.3.5.1 Create Inventory Ordering Module Beginning inventory

This looks correct, the formulas look right.
The negative Beginning Inventory happens because of the Forecast Demand.
You have some overrides set?
JaredDolich
Moderator

Re: 3.3.5.1 Create Inventory Ordering Module Beginning inventory

@saranshsaini 

@MarkWarren is correct but there's a little more to the story.

This is called an inventory balance set. Ending Inventory = Beginning Inventory + Receipts - Sales.  If you have Sales set, but no Receipts then your inventory will keep going down, even negative. This obviously can't happen in the real world because sales would stop if you run out of inventory (stock outs). Once you start loading your receipts this will fix itself.

In short, your formula is correct but this model is "simplified" for learning purposes. 


Jared Dolich

View solution in original post

saranshsaini
Occasional Contributor

Re: 3.3.5.1 Create Inventory Ordering Module Beginning inventory

Yes! During sprint 3 exam i have imported data in"Submit Purchase Order Receipt" and now all values look good!