Basic Quick Inventory Primer

V5 Question
21

There is no simple answer to this question. The flexibility of the system allows you to do nearly anything you want. You need to make some decisions.

You should carefully evaluate every scenario per each Product (and Portion) that you sell and each Inventory Item that you purchase.

There is no basic, quick, correct or incorrect way to do this, because different Products require different handling.

##These are the top considerations:

  • how do you sell the Product (Portions)
  • how do you buy the Inventory Item
  • how do you want Inventory reported (Consumption and Stock counts)
  • for similar Products, do you want consistent or simplistic Inventory Entry and Reporting
  • system limitations:
  • you can only Purchase Inventory by the Transaction Unit or Additional Unit, unless the Transaction unit is absent, in which case you can purchase by the Base Unit or Additional Unit.
  • you can only use Base Units of Inventory Items* in Recipes

(* you can use any Unit of an Inventory Product in Recipe, but that is outside the scope of this “Basic Quick Inventory Primer” ;P)

##How do you sell the Product (Portions)

  • Wine H is a house wine sold by the Glass or Bottle. The Product for H therefore has 2 Portions: Glass and Bottle.
  • Wine S is a special wine sold only by the Bottle. The Product for S therefore only requires 1 Portion: Bottle.

The Base Unit for the Inventory Item must be the smallest unit of measure that you sell for the related Product Portion. Or it can be even smaller than your smallest Portion if you prefer. It comes down to granularity and accuracy. As a general Rule for the Base Unit, smaller measures are better.

  • For Wine H this could be Glass, but it could also be Ounce or mL, even if you don’t sell those Portions.
  • For Wine S, this could be Bottle, but it could also be Glass, Ounce or mL, even if you don’t sell those Portions.

##How do you buy the Inventory Item

Both Wine H and Wine S might be bought by the Case or the Bottle, but most often, they are bought by the Case.

  • a case of H is 6x 1-Gallon Jugs.
  • a case of S is 12x 750mL Bottles.

This brings us to …

##How do you want Inventory Reported

This is where your most important decision is made, IMO.

Inventory Reporting is computed using the Transaction Unit, or in its absence, using the Base Unit. Depending on the Item, you might want counts based on Ounce, mL, Shot, Nip, Glass, Bottle, Case, Pallette, etc.

But you can only choose 1 of those for Reporting for each Inventory Item. So choose wisely, because there is no going back.

If you choose Case, then you will see fractions of Cases, such as 0.75 Case.

  • for Wine H, this equates to 4 Jugs
  • for Wine S, this equates to 8 Bottles.

If you choose Bottle/Jug, then you will see counts of Bottles, or fractions of Jugs.

  • for Wine S, you should only ever see whole Bottle counts
  • for Wine H, you will see fractions of Jugs, given that you sell Glasses which are a Portion of a Jug. For example, if you sold 3 Glasses from 1 Jug, you would see 0.859 Jug remaining in Stock (3x 6oz Glass divided by 128oz per Gallon Jug = 0.141 Jugs Consumed). Is that useful? I don’t think so.

Now we get to smaller Units. If Wine S is only ever sold by the Bottle, you can stop here with that, since there are no smaller Portions, but you may choose not to, for the sake of consistency across similar Products, and more granular accuracy.

If you choose Glass, then you will see counts of Glasses. Given that a Glass is 6 Ounces or 187.5 mL …

  • for Wine S, you should only ever see Glass count multiples of 4, since there are 4 Glasses in a Bottle
  • for Wine H, you will see any number of Glasses Consumed and remaining in Stock. You can then manually compute how many Jugs that might be, if you want. A Jug holds 21.33 Glasses (128oz/6oz)

##Don’t go simple - go granular, go accurate, go consistent

Shot, Nip, Glass … these are arbitrary Units. They could mean anything, and they mean nothing at all. Even Bottle, Jug, Jar, Carton, Sack, Bag are arbitrary Units. Even an Ounce and Pound are arbitrary, depending on wet/dry Volume, and/or wet/dry Weight, and depending on Region (British v. US)! You should never use any of these as the BASE Unit. Also, PREFER METRIC, since it is STANDARD.

If you stopped at the Base Unit of Bottle for Wine S, you chose the simple way, as opposed to the consistent way. There is nothing wrong with that, and in many scenarios, simple can be better. But now let’s look at the consistent way…

If you choose mL (or :wince: Ounce) as your Base Unit, you are now at the most granular unit of measure possible (or necessary) for any similar Product. This might be Wine, Spirit, Soda - whatever… the point being, this small Base Unit is used across all similar Inventory Items and Products no matter what Portions you sell. As the definition of a Base Unit, this is where you should be, in my opinion. You can still Report and Count on the Transaction Unit anyway.

So…

###Wine S (by Bottle)

  • Base Unit: mL
  • Transaction Unit: Bottle, Multiplier: 750 (Bottle is the Reporting Unit)
  • Additional Unit: Case, Multiplier: 12, Parent: Bottle

Since Wine S is only ever sold by the Bottle, I would set it up as above. The Base Unit is mL, but the Reporting Unit is Bottle. Good enough, and it makes sense.

But, if you wanted to , you could Report/Track by mL by omitting the Transaction Unit…

###Wine S (by mL)

  • Base Unit: mL
  • Transaction Unit: <blank>, Multiplier: 0 (mL is the Reporting Unit)
  • Additional Unit: Bottle, Multiplier: 750, Parent: mL
  • Additional Unit: Case, Multiplier: 12, Parent: Bottle

Or this works also:

  • Base Unit: mL
  • Transaction Unit: <blank>, Multiplier: 0 (mL is the Reporting Unit)
  • Additional Unit: Bottle, Multiplier: 750, Parent: mL
  • Additional Unit: Case, Multiplier: 9000, Parent: mL

###Wine H (by Jug)

  • Base Unit: mL
  • Transaction Unit: Jug, Multiplier: 3785* (Jug is the Reporting Unit)
  • Additional Unit: Case, Multiplier: 6, Parent: Jug

(* Inventory Item Multipliers can only be whole numbers. In the above scenario, 3785 is actually 3785.41 but we can not use decimals/fractions for Inventory Item Multipliers. We can use decimals/fractions of Units within Recipes however)

###Wine H (by Glass)

  • Base Unit: mL
  • Transaction Unit: Glass, Multiplier: 187* (Glass is the Reporting Unit)
  • Additional Unit: Jug, Multiplier: 3785*, Parent: mL
  • Additional Unit: Case, Multiplier: 6, Parent: Jug

Additional Units could alternatively be defined as:

  • Additional Unit: Jug, Multiplier: 21*, Parent: Glass
  • Additional Unit: Case, Multiplier: 126*, Parent: Glass

Or you could use higher Multipliers with Parent as mL:

  • Additional Unit: Jug, Multiplier: 3927*, Parent: mL
  • Additional Unit: Case, Multiplier: 23562*, Parent: mL

###Wine H (by mL)

  • Base Unit: mL
  • Transaction Unit: <blank>, Multiplier: 0 (mL is the Reporting Unit)
  • Additional Unit: Jug, Multiplier: 3785*, Parent: mL
  • Additional Unit: Case, Multiplier: 6, Parent: Jug
3 Likes