There are 2 options to update your inventory cost. These are defined in the configuration area of Store Operations Manager:

1. Open Store Operations Manager
2. Click on File\Configuration
3. Click on the Inventory tab.


Method 1. Last Cost: Select this method if you want to replace existing item costs with received costs shown on purchase orders. For example, assume that you have in stock 20 hammers that cost $10.00 each. You then order 10 more hammers that cost $12.00 each. If the last cost method is selected, Store Operations automatically changes the cost for the hammers to $12.00 when the 10 hammers are received.

Method 2. Weighted Average: Select this method if you want Store Operations to update the item cost based on an average cost of all units of that item. When you receive new items, Store Operations adds the total cost of the unit received to the total cost of the existing units. This total cost is then divided by the total number of units on hand. For example, assume you have in stock 20 hammers that cost $10.00 each. You then order 10 more hammers that cost $12.00 each. If the weighted average cost method is selected, Store Operations automatically changes the cost to $10.67 when the 10 hammers are received. Look at the following computation:

Total cost = 20 hammers @ $10.00 each + 10 hammers @ $12.00 each = $320.00
Weighted average cost = $320.00 / (20 hammers + 10 hammers) = $10.67

These costs are updated when the purchase order is committed and the inventory added.