The Cost Layer Rebuild process is like a nightly "accountant" that ensures your inventory costs are accurate and up-to-date. Think of it as a financial health check for your inventory that runs automatically to keep your cost tracking clean and reliable.

Cost layers are records that track the true cost of every item in your inventory. This isn't just the purchase price you paid to your supplier - it includes:

Over time, your cost data can become inconsistent due to:

The nightly rebuild ensures that by morning, all your cost data is accurate and reflects reality.

The system looks at your actual receiving reports and purchase orders to understand:

For each item, it:

The process:

With clean cost data, your profit margins and financial reports reflect reality, not outdated or incorrect cost information.

Your inventory is valued at its true cost, giving you accurate balance sheet numbers for financial statements and tax purposes.

You can trust cost-based decisions like pricing, supplier evaluation, and product profitability analysis.

Eliminates the accumulation of data inconsistencies that can compound over time and cause reporting errors.

The rebuild is designed to be:

Think of this process as having a meticulous accountant who:

This automated process ensures that your cost tracking stays accurate without requiring manual intervention, giving you confidence in your financial data and inventory valuations.
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Let me walk you through a complex real-world scenario that shows exactly how the system calculates costs.

Background:

Your company receives a shipment from a Chinese supplier containing three different products, with various extra costs that need to be allocated properly.

Only 75% of the ordered quantity actually arrived:

Total Unit-Based Costs: $850.00 + $120.00 = $970.00

Total Units Received: 1,275 units

Cost Per Unit: $970.00 ÷ 1,275 = $0.7608 per unit

Total Value-Based Costs: $480.00

Total Received Value: $12,000.00

Cost Per Dollar: $480.00 ÷ $12,000.00 = $0.0400 per dollar

If the system is configured for weighted average costing, it combines all shipment layers:

Total Quantity: 750 + 375 + 150 = 1,275 units

Total Cost: (750 × $5.9608) + (375 × $13.2408) + (150 × $26.7607) = $13,450.00

Weighted Average Cost: $13,450.00 ÷ 1,275 = $10.5490 per unit

Let's say the current stock levels are:

For SKU 12345 (Widget A):

For SKU 12346 (Widget B):

For SKU 12347 (Widget C):

This detailed calculation ensures that your inventory valuation reflects the true landed cost of goods, including all associated expenses properly allocated across all received items.

Great question! Let me walk you through what happens when additional stock arrives after the initial cost layer rebuild. There are several scenarios to consider.

Let's continue with our previous example where we only received 75% of the original shipment.

The system recognizes this as part of the same shipment because it has the same supplier_purchase_order_shipment_id.

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Apply to RebuildCostL...

Unit-based extra costs: $0.7608 per unit (already calculated)

Value-based extra costs: $0.2000 per unit (already calculated)

Final cost per unit: $5.9608 (same as the first batch)

Now let's say 3 months later, you receive a new shipment of the same products but with different costs.

Unit-based costs: $600.00 ÷ 800 units = $0.75 per unit

Value-based costs: $265.00 ÷ $6,650.00 = $0.0399 per dollar

For Widget A (SKU 12345):

The system maintains separate cost layers for each receipt:

Widget A Cost Layers:

When items are sold/consumed:

The system combines all layers into one average cost:

Calculation:

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Apply to RebuildCostL...

Total quantity: 750 + 250 + 500 = 1,500 units

Total cost: (750 × $5.9608) + (250 × $5.9608) + (500 × $6.4697) = $9,194.30

Weighted average: $9,194.30 ÷ 1,500 = $6.1295 per unit

Result: Single cost layer of 1,500 units @ $6.1295 per unit