The system tries to create quantities in inventory location detail as of the effective date. To do this, the system needs the closing inventory balance as of that date to determine quantity values, and ultimately, get the cost. To do this, the system uses the location detail records (ld_det) and tries to find all greater than or less than 0 (zero) values as of that date.

It then goes to the ending inventory balance of a reserved locations detail (LOCD-DET) records, then to FIFO history of unconsumed quantity on hand per period records (LOCPD_DET).

The system goes to the inventory master (in_mstr) records, then transaction history records (tr_hist) looking for temporary locations after the effective date in an attempt to get the beginning balance as of the start date.

These steps are to determine the beginning quantity as of the effective date. Once the system determines a quantity, it attempts to verify if the quantity is correct as of that date, so it checks for other transactions after that date.

At this point, the system goes into WIP site, determines open work orders after the effective date to capture WIP values. It then captures quantities and values in:

So, the initialization process creates cost records for the ending balance and creates the records above.

The system calculates production costs rates for previous periods, based on work center rates or a total value that you provide.