Cardex Integrity in an Average Cost Environment

ED GUTKOWSKI, SENIOR DISTRIBUTION CONSULTANT

Ensuring your JD Edwards cardex details summarize accurately to the item balance is a critical step in maintaining a healthy inventory system. You can check individual items by inquiring on the item ledger screen and exporting the details to Excel. The sum of the transaction quantity should equal the stated balance on top of the screen, and the sum of the extended costs should equal the stated balance. Be careful though, as things are not as straight forward as highlighting the column in Excel and getting the total!

Here are some things to consider:

• All transaction quantities MUST be in primary units of measure. If your business transacts an item in multiple units of measure, non-primary quantities must be converted. The extended cost does not need to be converted.
• Posting code (ILIPCD) ‘X’ records must be filtered out. The code indicates the cardex record is ‘memo only’ and must be ignored. This happens on manufacturing scrap and lot releases, which can have quantities and costs associated with them. Location and item adds are also coded with the ‘X’, but typically have no quantity or cost.
• The cost method used for the item determines the level the analysis should be done.

Wait a minute … what do you mean with that last one? The cost method makes a difference in cardex analysis?

As it turns out, it sure does. If standard costs (07) are used, then the balances on the top of the item ledger screen will always agree to the details, no matter if you filter the results to the branch, location or even the lot number. If average costs (02) are used, then you must also know the cost level of the item to filter the item ledger properly. Consider this example:

Let’s say you have a new average cost item with lot control turned on and the cost level set to 2 (item branch). You receive 1 at $100 for Lot A1. The average cost changes from 0 to $100. Then you do a second receipt for 1 at $110, Lot A2. Your inventory data looks like this:

Now the ending balance of 2 agrees with the sum of the cardex transactions correct? But if you filter the item ledger on an individual lot, then each one is off by $5:

Is there an issue …no! JD Edwards does not go back and ‘rebalance’ the lots when the average cost changes. So the moral of the story … in an average cost environment, you must be aware of an items cost level and filter accordingly in order do a proper analysis!