FIFO Method

Hello Guru’s,

I need your help…

Let me explain the case,

Navision Version 5.0 (SP3)

I just want to understand in Navision the Inventory Movement when the Costing Method is FIFO.

  1. 01/OCT/2010 Purchase of Qty 10 for Item A was made with unit cost $ 45. Navision generated an Entry number 1245

  2. 10/OCT.2010 Purchase of Qty 10 for Item A was made but with different unit cost $50. Navision generated an Entry number 1255

Now a Sale is made on 12/OCT/2010 for Qty 10, Navision picked up the Item A with cost $45 and applied to entry number 1245. Is this logic correct?

I did a few scenarios and it works the same way but some users dont get this logic.

Appreciate any prompt reply.

Thanks,

Jack.

Hi Jack,

FIFO means First-In-First-Out - and the result is that Navision picks the first available inventory. So in your case then if all 10 are still available when you sell the Qty 10, then it will also use the unit cost from this first purchase.

If your costing method was LIFO, then it would have picked the last purchase and your cost would have been $50. If you had been using average cost, then it would have been $47.50.