Parts Packaging Ratios

This page will explain how to setup package ratios on parts in master inventory and how the package ratio affects ordering and receiving the parts.

A package ratio is a multiplier set on parts that are purchased in bulk quantity but sold individually.

Setting Up the Package Ratio

When viewing the General tab of a part in master inventory, in the upper-left corner there are 3 fields related to the package ratio:

  • Selling Packaging – description of how the part is sold (e.g., quart, piece, each, etc.)
  • Purchase Packaging – description of how the part is purchased (e.g., case, box, roll, etc.)
  • Packaging Ratio – multiplier used when the part is ordered and received (e.g., if the package ratio is set to 12, ordering and receiving a quantity of 1 will receive 12 individual items into inventory)

When using a package ratio multiplier, the Retail Price, Replacement Cost, Average Cost, and Standard Cost (depending on cost method used) should be equivalent to the price and cost of the individual item, not the package price and cost. This requires that you divide your package retail price and cost by the package ratio. See example below.

In this example we are setting up quarts of oil. The oil is purchased in a case of 12, but each quart is sold individually. The retail price set on each quart would indicate that the entire case retails for $90 ($7.50 x 12). The replacement cost set on each quart would indicate that the entire case is purchased for $60 ($5 x 12).

*Note: If the part is in a price book and the price/cost indicated in the price book is the bulk price/cost, then you will need to uncheck the Price Book Update boxes for the retail price and replacement cost.

 

Ordering Parts with Package Ratio

When a part with a package ratio is added to the Ordering List, the Pack Ratio field will be highlighted in orange indicating there is a multiplier involved. In addition to that, the Ordering comments field will indicate how many individual items are being ordered.

Once the PO is created, those same fields carry over and the sub-total of the PO reflects the cost of the case.

Receiving Parts with a Package Ratio

When receiving a part with a package ratio the Pack Ratio field and Ext Cost are highlighted in orange indicating there is a multiplier in affect.

Once the item is fully received the TOH in master inventory will reflect the individual quantities received.