Convert Stock - Processing Overview

The Convert Stock option allows you to convert the available quantity for one in-house item number to another in-house item number. 

The Convert Stock option can only be used for existing items.  It does not allow you to automatically create items on the fly like the depreciate stock option does.  Both the source and the destination item to be processed must already exist in the Catalog file and in the Inventory file in the location where you are processing the transaction.

The Convert Stock option can only be used for Stocking inventory items.  The quantity and cost of nonstock items are not automatically updated by the system, so there is no reason to move quantities between nonstock items, or to convert from nonstock to stock items or vice versa.

 When the Convert Item option is selected in the Inventory Management program, the system verifies if the current operator is allowed to use the option.  If so, the system then confirms that there is an available quantity for the source item being converted.  If there is not an available quantity for the source item, or the operator may not use the option, an error message is displayed.  If the item can be processed (on hand – allocated quantity is greater than 0), and the operator is allowed to use the option, the system activates the Convert Stock Panel and it loads the selected item number into the Source Item section of the panel.   

At this point, the operator selects the destination item to be used.  This item must

•      Exist in the location in which it is being processed. 

•      Be a stocking item.  Non stock items cannot be processed.

•      Have the serial flag set to the same value as the source item (the serialized inventory behavior for the item does not change when it is converted to a new item.

Once a valid destination item has been selected, the operator specifies the quantity to be processed.  The quantity to be processed cannot be greater than the available or on hand – allocated quantity for the source item. 

If the source item is serialized, the operator also specifies the in stock serial records for the source item that should be processed.  

•      The quantity of serial records specified must be equal to the quantity being processed if the source item serial flag is set to Y. 

•      The quantity of the serial records must be zero if the source item serial flag is set to N

•      The quantity of the serial records can be from 0 to the quantity being converted when the serial flag for the source item is set to S.  In this case, serial numbers are recorded on sale and serials for these items may or may not exist already in the system.

The serial records for the source item can be selected using the In Stocks Button.  The serial records to be processed are displayed in the Serial Numbers grid on the right side of the program.

Once the operator has specified the source and destination item, the quantity to be processed, and the serial numbers for the source item (if applicable), the operator must specify the source and destination bins to be used.  The source bin should be selected using the prompt button next to the Bin From window.  The bin selected should have a free quantity equal to or greater than the quantity being processed (you should do multiple transactions if you need to convert quantities from multiple bins for the source item).  The destination bin can be selected from the existing bins for the destination item, or a new bin can be specified in the Bin To window.   If a new bin is specified for the destination item, it will be created by the system as the transaction is processed.

Once all of the required information has been entered, and the “Do It” Button is pressed, the system.

•      Reduces the on hand quantity of the source item by the quantity being processed.  The quantity in the source bin is also reduced.

•      Increases the on hand quantity of the destination item by the quantity being processed and creates (if required) or updates the destination bin quantity.

•      Checks the new item to see if any quantity is on hand for the item in the current division.

•      If no quantity is on hand, the system will update the destination item cost with the source item cost, and it will not write a journal entry for the cost change (in this case the cost of the source item is just transferred to the destination item.

•      If there is a quantity on hand for the destination

•      Type CI (Change Item) Inventory Activity records are written to record the change to the source and destination item quantities.  These records store the cost and quantity of each item at the time the transaction is processed, and the journal entry used to post the transaction to the GL.  If the cost of the destination item is changed, the prior and new cost are recorded in the transaction for the destination item.

•      Warehouse Transaction records are written to record the change to the source and destination bins.  The Waretran records have a source of CI and point to the inventory activity record used for the transaction.

•      A Journal Entry (Source IN) is made to record the change in the inventory value resulting from the transaction.  The difference between the source and destination item value (based on the current average cost for each item), is posted to the Inventory Control Account (based on the product line in each item), and to the GL Expense or cost account pointed to by a system parameter.  The system records a loss (or gain) when you change one item to a different item with a different cost.  The destination item cost is not updated, the system just uses it to calculate the change to the inventory value resulting from the transaction.

If the items being processed are serialized.

•      The Serial records for the source item are changed to status X or deleted and Type CI Serial History records are written to record the fact that the item has been converted.  The Serial History records point to the Inventory Activity record used for the transaction and they store “became: and the destination item number in the Note field – so that you can view the item the selected serial number was converted to.

•      Serial records (In Stock Status) are created for the destination item.  The Serial Numbers from the source item are “moved over” to the new item.  Serial Master records with a status of I (in stock) are created for the destinatino item, and serial history records (Type CI) are created to document the serial number changes.  The serial history records are linked to the Inventory Activity record for the transaction and they store was: and the item number of the source item in the Note field – so you can view the item the selected serial number was converted from.

More:

Convert Stock - Control Information