Details:
A unit of measure gives meaning to quantities of inventory items. For example, case, pallet, roll, or each. All inventory items have a Sell Unit of Measure, and at least one For Ordering Unit of Measure. Units of measure are also used to calculate the cost of an item by converting it into individual units when the item is received.
Step by Step:
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Open the Unit of Measure tab on the Administration - Inventory screen (Administration > Inventory > General Setup > Units of Measure).
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Click Add. The New Unit of Measure screen appears.
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Enter a descriptive Name of the unit of measure. For example, Case4, Case12, Pallet, Pallet24, Roll50, Roll200, Ton, Yard.
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Try to keep the names as consistent as possible.
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Enter the Conversion Factor. This field only applies if you purchase an item in this unit of measure, but you sell the item as individual units (each). For example, if you buy a case of 12 items but sell them individually. When you receive the case, the system automatically converts the case into 12 individual units.
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The order by cost will be divided by this number to calculate the single unit cost. The conversion factor will also be multiplied by the received quantity to determine the single unit quantity. For example, if the unit of measure is Case24, the Conversion Factor is 24. The order by cost will be divided by 24 to determine the single unit cost, and the received quantity will be multiplied by 24 to determine the single quantity received.
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Click OK to save.