Buy Ratio Guide

Buy Ratio - Enter the Buy Ratio corresponding to the cost you entered. The Buy Ratio is used by the system to calculate weighted average cost, margin and profit analyses, pricing for purchase orders, etc.

The Buy Ratio allows you to purchase in CASE/ROLL/SPOOL or other MULTI lots and sell as individual items. Example, if your vendor sells you a “spool” of rope, however you sell rope it by the foot, enter the spool cost in the Cost field and a Buy Ratio of 500 (amount on the spool), as shown above.

Although the Unit of Measure doesn’t do anything in effect, it is informational on how you stock and sell this product. (Note: Try to be consistent when entering Unit of Measure)

On the PO, you enter 1, 2, or 3 “Spools” and when it is received, the system will convert to QTY 500, 1000, 3000 and update your cost per foot. (i.e. 135.00 / 500 = .27 per foot cost)

Do not change the Receiver QTY!
(Note: Receiving 100 with a buy Ratio of 100 will result in 100 x 100 = 10,000 in stock and depending on the Extended Cost used could potentially have a negative effect on WAV Cost)

The result is we added 500 to our QTY on Hand and our WAV cost is correct at 0.37 and our Retail Price is .2.25 per foot. (Note: Retail Price is manually calculated (based on selling unit of measure) or can be calculated using Price Factors, Price Factors do take into account the Buy Ratio when calculating a markup from cost)

USE CAUTION and make sure you understand this powerful tool!

Fixing Buy Qty/Ratio Receipt Errors:

Often BUY QTY mistakes are not caught at the AP level because the total invoice cost is the same, however when it is noticed at the inventory level it is typically because of an overstated QTY and understated COST.

To fix these errors it is best to have an adjustment code that washes through inventory (i.e. the adjustment account is the same as the inventory account).

     • Adjust the QTY to the correct OH Qty using the E Adjustment Code
          o Inventory Management>Maintenance Functions>Inventory/Fuel Adjustments
     • Calculate the correct cost (at this point do the math for the unit cost)
     • Adjust the WAV Cost of the part
          o Inventory Management>Maintenance Functions>Change Weighted Average Cost

Done..

 **If at any point you run into any issues, feel free to email [email protected] for assistance.**