Unit Types

The Purchase Orders application maintains three unit types:

• Pricing units. These are the units in which the vendor quotes prices. Pricing units are defined in the Products By Vendor file. All quantities in the Products By Vendor file are maintained in terms of pricing units.
• Purchasing units. These are the units in which orders are placed. Purchasing units are defined in the Products By Vendor file.
• Stockkeeping units. These are the units in which inventory is maintained. All quantities in the Products By Warehouse file are maintained in stockkeeping units.

The system uses two factors, the pricing factor and the quantity factor, to convert from purchasing units to pricing units and stockkeeping units, respectively. These factors are maintained in the Products By Vendor file. The following formulas are used for conversions:

Purchasing Units x Pricing Factor = Pricing Units

Purchasing Units x Quantity Factor = Stockkeeping Units

Requests for quotes and purchase orders are entered in terms of purchasing units. Receipts are entered in terms of either purchasing or pricing units. Invoice line item quantities are pricing units.