Comment 26 for bug 610738

Hello Fabien,
Returning products back to supplier _does_ change average cost.

I Disagree with you in this point.

> The following operations should not change the average cost:
> - delivering a customer (with products that come from a particular
> supplier or not)
> - scrapping defects products (that come from a particular supplier or not)
> - returning the products back to a supplier (fortunately, otherwise you
> have to reconcile each product you send to a
> supplier with the right reception order.) (*)
>
> (*) Returning products back to supplier _does_ change average cost.

Let's say you have:
1) 10 Products A @ AVG €100,00 (Initial Inventory) that yields €1.000,00
2) Buy 5 Products A @ €150,00 yielding €750,00 which causes AVG to change to
AVG = (1.000,00+750,00)/(10+5)
AVG = 116,67 yields a total inventory of €1.750,00 = 15*116,67
3) Sell 3 Products A @ AVG €116.67, causing a reduction in the inventory
1750-3*116,67 = 1.400,00 keeping 12 Products A @ AVG= 116,67
4) Return to supplier 2 Products A @ same purchase price €150, which causes
inventory to reduce to 1.400,00 - 2*150,00 = 1.100,00.
That let us with an Inventory Valued in 1.100,00 for 10 Products A.
And the only way that we can "guarantee that accounting values =
stock_accouting values (basic assumption for any audit)", as pointed by
Chricar, is that those 10 remaining Products A be recomputed theirs average
cost to 1.100,00/10 = 110,00 = AVG.

When returning products to suppliers we _must_ do them at same purchase
price, otherwise, if returning at average price, we could be harnessing a
cost that is not ours, whenever AVG > purchase price, or earning a profit
that either is not ours, whenever AVG < purchase price.

Sorry for posting this too late, but better late than never.

Regards.

Hbto