Enhanced Inventory Ratios: Options and Utility Setup

(ITR users running the Eagle OS operating system only)

Use the following procedure to set up Enhanced Inventory Ratios on your system. Before you begin, option 8206 "Improved Inventory Ratios on System" must be set to Yes by an Epicor representative.

Setting up Enhanced Inventory Ratios includes the following tasks:

Setting up the Enhanced Inventory Ratio options
Running the Build Average Inventory (BAI) utility in your end-of-day queue

Set Up Options

Display the Options Configuration window.
Click the ID button on the toolbar. In the dialog that displays, enter 8207 and click OK. The option " QOH used to calculate Inventory Ratios" displays. In the Current Value column, select A (Average).

This option determines whether the system uses current or average quantity-on-hand (QOH) in calculating inventory ratios (GMROI, Turns, and Sales to Inventory).

A = Inventory ratios that include inventory value in their calculation are based on average QOH, which is a true average of QOH over a specified time period. For example, to calculate the average QOH over a one-year period, the system determines what the QOH was for each day during this period, using data in the Inventory Transaction Register (ITR). It then sums up the QOH for each day and divides by the number of days.

C = Inventory ratios are calculated using current QOH.
Click the ID button again. In the dialog that displays, enter 8209 and click OK. The option " Sales & Costs used to Calculate Inventory Ratios" displays. In the Current Value column, select R (Running Accumulation).

This option determines whether the system uses year-to-date (YTD) figures or a running accumulation to calculate inventory ratios (GMROI, Turns, and Sales to Inventory).

R = Inventory ratios (GMROI, Turns, Sales to Inventory) are calculated using the running sales and running Cost of Goods Sold (COGS) that are accumulated over a specified time period. The system calculates this information based on the transactions found in ITR.

Y = Inventory ratios (GMROI, Turns, Sales to Inventory) are calculated using YTD Sales and YTD Cost. Your inventory ratios may not be accurate in the beginning of the year since the system uses YTD information. For example, if an item is seasonal and doesn't start selling until spring or summer, the YTD Sales and YTD Cost of Sales will be very low early in the year, which will adversely affect your Turns and GMROI for this item.
Click the ID button again. In the dialog that displays, enter 8211 and click OK. The option " Number of months used to calculate Average QOH and running Sales & Costs" displays. In the Current Value column, enter the number of previous months of ITR data you want the system to use to calculate the average quantity on hand (QOH), running sales, and cost of goods sold (COGS). For example, if you want to include at least 12 months of ITR data, enter 12.

This option determines the number of previous months of ITR data that the system will use to calculate the Average Quantity-on-Hand (QOH), Running Sales, and Cost of Goods Sold (COGS). The current month is always included in the calculation, so set this option to the number of previous months you would also like to include. For example, if you want to include 12 months of ITR data in addition to the days so far in the current month, enter 12. These amounts will be calculated and stored in the inventory record and consequently used by the Inventory Valuation Report (RIV), Inventory Maintenance, and the Inventory viewers. These are the amounts that will be used in the calculation of the inventory ratios (GMROI, Turns, and Sales to Inventory ratio). This option only applies if you have either option 8207, "QOH used to Calculate Inventory Ratios" set to A, and/or option 8209, "Sales & Costs used to Calculate Inventory Ratios," set to R.
Click Change on the toolbar.

Set Up the Build Average Inventory Utility (BAI)

Build Average Inventory (BAI) is a utility that calculates average inventory value using your ITR data. Click here to learn more about how the system performs the calculations.

BAI can be run by store or across all stores. The "Number of Months for Inventory Ratios" field defaults from the setting in Option 8211 ("Number of months used to calculate average QOH"), but you can enter a different number if desired. You can also run BAI based on Eagle for Windows' standard Code Selections (User Codes, Popularity Code, etc.).

Add BAI to your end-of-day queue. For more information about queues, click here. You can also run BAI manually.

Be sure to schedule BAI to run right before the Inventory Valuation Report (RIV) so that RIV uses the Avg QOH, Running Sales, and Costs calculated by BAI.

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