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Materials > Setup > Units of Measure
Description
Units of measurements for storing and issuing stock items can depend on the item itself or on the supplier. Cable, for example, is generally measured in feet. Liquids can be measured by the bottle, barrel, or gallon. Screws might be measured according to box or pound.
Measurements can vary within your own organization. Perhaps you must order widgets from a vendor in 24-item cases (the purchase unit of measure). Inventory, on the other hand, stocks widgets as single items (the inventory or stock-keeping unit of measure).
Define various measurements for different purchasing and inventory items. All system store transactions are based on inventory units of measure (how the items are actually stored). All quantities referred to on the bill of materials are also based on inventory units of measure.
When purchasing items in units of measure different from that in which you stock them, convert the unit of measurement. When the inventory unit of measure and the purchase unit of measure are exactly the same, the conversion factor is 1. If they are not the same, use the following formula:
purchase UOM x conversion = issue UOM
(1 box of widgets x 10 = 10 widgets)
When the buyer sends out requests for quotes to suppliers, the supplier might provide a price based on a unit of measure that is different than the purchase unit of measure (which could be true due to volume discounts, for instance). This is the quotation UOM, and you then need to supply a conversion factor between the quotation UOM and the purchase UOM when creating the purchase order or requisition.