Units of Measure-Working Example

Working Example:

Buy from manufacturer by weight, stock in bags, sell by different weight

In this example, we buy Chai Tea from the farmer by weight (1,000kg at a time), but stock it in 25kg bags (a single 1,000kg order yields 40 25kg bags in stock), and then sell it in 100kg package, but each package contains 4 bags. Patently, our basic unit is 25kg bag.

First, let’s set up the item.

Now, let’s set up two (2) unit of measure conversions – one for purchasing, and the other for selling.

Here’s the purchasing unit of measure conversion.  On the top of our created item master, the first related link is “Unit of Measure”.  Select that link and hit “New Unit of Measure” button. (You can also set it from Unit of Measure Tab whenever you want.)

As shown above, remember to select Applies Only to Purchase Order.

Now let’s enter a purchase order for 1000kg of this item.  

Enter a line item for the created purchase order.  Notice that the UOM that comes up is the one from the item master is 25kg bag.

Now, let’s change the purchasing UOM to be the new UOM conversion (1000kg Lot).  Notice that the price also changed? Receive the PO and you’ll now see you have 1000kg

Since we did not set up a UOM for sales orders, we will only be able to sell in kgs. Please review the Sales Order below. We will make a Sales Order for a quantity for 500 kg.  There will be no price change accordingly and will pull from the Item Master Price.

Let’s save it and generate a picking list.  Notice it does NOT do any UOM conversion. Now, let’s pack the sales order line.