Generate an Inventory Count Using Theo on Hand

This article is part of entering Inventory Counts and covers generating an Inventory Count using Theoretical on Hand. 

When necessary, users can generate an inventory count using Theo on Hand. When this feature is used, the system uses the calculated theoretical usage for items to estimate the inventory on hand. 

There are instances when inventory co unts must be conducted multiple times within a short time frame, particularly in cases in which the end of the operating calendar and the end of a posting period are less than a week apart. Generating a count using the Theoretical on Hand allows greater efficiency in these scenarios, and the count variance is typically negligible. Users can utilize the calculated theoretical usage to enter the inventory count instead of conducting another full inventory count days later.

Security 

In addition to 'Edit' and 'Create' Inventory Count Permissions, Users must have the following permission to use the 'Generate Theo on Hand' function:

Food → Inventory Counts → Generate Using Theo on Hand

Calculating Theo on Hand

Theo on Hand is the theoretical number of Items available in Inventory. This number is based on the usage per $1000. Theo on Hand is approximated using historical Inventory Item Usage.

Theo on Hand is calculated using the following formula:

Where the following is true:

• EndCountQty - The item quantity counted on the date of the last Inventory Count that occurred before the date the Theo on Hand is determined

• UsagePer1000 - The ratio of item usage per $1000 of sales on the date Theo on Hand is determined

• Theoretical Sales - The sum of Actual Sales and Forecasted Sales between the date of the last Inventory Count that occurred up to and including the date the Theo on Hand is determined

• Inventory Transactions- The net inventory effects of R365 sourced data between the date of the last Inventory Count up to and including the date the Theo on Hand is determined. The data from Inventory Transactions includes the following:

  • AP Invoices

  • AP Credit Memos

  • AR Invoices

  • AR Credit Memos

  • Commissary Receiving and Sales

  • Item Transfers In and Out

  • Catering Sales

Generating an Inventory Count Using Theo on Hand

To use the Theoretical Usage for an Inventory Count, first, create a new Inventory Count, then, follow these steps:

	Once the inventory count sheet is open, click the Generate Qty button at the top of the sheet.
	This will auto-generate the inventory count for all the Items using the theoretical usage of the items. The storage locations on the count will each update to reflect 100% completion.
	Once the storage locations are marked as complete, click the Review button to review the inventory count before completing or approving it.

Duplicate Items on a Single Count

When an item exists twice on the same inventory count, whether that is twice in the same storage location or in a different location but in the same count, the Generate Qty button will generate a qty only once for the item. The first storage location will get the value. The repeated items will be left at 0.

Theo Generated Grid Column

The Theo Generated column can be added to the inventory counts grid.

This column indicates whether or not an inventory count was entered using the generate theo on hand function.

• When marked as Yes, the Count was entered using the generated theo on hand function

• When marked as No, the Count was entered in manually