When this report is printed, you are selecting the correct option to 'create a physical inv. adjustment workfile'. This creates a set of datafiles for each location, and the file names are ICW###'1, ICW###'2 and ICW###'R (where ### is a 3 digit number such as 001, indicating an internally stored reference for the location). These are created in your data directory, and should have file sizes larger than 0 bytes.

If you print the physical inventory worksheet report for each location, and refresh the workfile for every location, you should see a set of 3 files created for each location (as above), with file dates equal to today. Can you confirm that this is the case? Or do you find that some files are not created, not refreshed with today's date, or created but with a size of zero bytes? Knowing what happens could help.

Also, what option are you selecting for items - all items, all allowed at the location, active items, and so on? This could also be important.