Hi All,

I need to revisit this problem again with an example of an item that has a problem.

The total qty on hand 248, and the total cost is $177,582.65, making an average cost of $716.06. I know that the actual cost of this item is $19.45!!! Obviously costs are being added to the pool and not being taken away, or added at a much higher rate than being taken away.

I know for a fact that there was a problem with the way someone was entering production for this part - they were using adjustments instead of assemblies (using bills of material).


How can I reduce the cost base?