Hi,

We do something similar. We’re very fond of virtual locations. If in doubt we add another, it can be a really helpful thing.

Pretty much all inventory is received and shipped out of STORES. If it’s available and in-house that’s the location it resides in. Items that fail and need to either be returned to the vendor or require further review are transferred into MRB-IN, if sent to the vendor we transfer them to MRB-OUT. Items needing repair are moved to REPAIR. As a rule, we count the REPAIR location as “available” only because we have deemed that these can/will be repaired in-house indicating that it shouldn’t take long and because if inventory ran low we’d get someone to work on those items. MRB location doesn’t count. Chances are it will be there a while. There are of course exceptions, but you want to separate out what’s not immediately available but could become available from what you just can’t count on.

We also run several other virtual locations. We manage our DEMO equipment which carries no dollar value and they aren’t available inventory. We also track customer-owned equipment returned for repair. So we were never able to use the top level quantity or average cost in searches for our inventory. There are a few things to be aware of.

1. Take care when you build inventory searches:
   • When making any inventory search you need to set the applicable inventory location(s) in your search criteria and ensure to thoroughly audit during creation that you’re pulling in the quantities and costs that you want/need for those items. In so doing you also have to make sure that you pull inventory locations into the search results as well in case you are doing multiple locations.
2. Location Costing.
   • Sounds like you have a pretty good grasp on the primary distinction between your virtual locations. Saleable Goods vs Unsaleable Goods. However, this does beg the question should all of your Unsaleable Goods be carrying costs? Before anything else you need to decide that.
     • Transferes between locations that are mixing costed and uncosted inventory will wreak havoc on your average costing. We do sometimes legitimately take things from a costed location and move it into an uncosted one, and vice versa. For example when you build a new item for your DEMO pool. We do not allow transfers between costed and uncosted locations. So our process is to write off the item in STORES and pick it up in DEMO-IN at $0. Depreciation is handled via fixed assets and our so our controller is then notified.
     • If you do have costed and uncosted locations, one of the first things you need to do is ensure that no transfers via TO or inventory transfer occur between the two. Trust me, it happens all the time. A DEMO item needs repair and someone decides to x’fer it to the REPAIR location.
3. Build custom fields on your Location Records.
   • You can filter on these fields in your custom searches which can be extremely helpful and will make your searches much more dynamic. Every time you add a new location you won’t have to edit your searches to change the criteria or formulas to look or not look at the new location.
     • Build a list field for the location records for “Unsaleable Goods” and “Saleable Goods”.
     • If applicable, build a list field for the location records for “Costed” and “Uncosted”
4. Make sure you clearly define each virtual location and the parameters for its uses and make sure that you go over it with people a lot of times. Once finalized I recommend writing it all out and handing it out to people who are going to be making transfers. Trust me there will be mistakes and they will be very logical.