Understanding parent-child inventory control

You should create a parent-child relationship between items in RMH if store employees can "open up" or "break open" the parent item to restock shelves with the child item. If a parent-child relationship exists between items and the available quantity of the child item is zero (0), when a customer purchases the child item at POS, RMH automatically recognizes that the parent item has been opened up and adjusts the available quantities of both the child and parent items accordingly.

Scenario 1: Printer paper

The store sells printer paper by the case and by the ream. Each case contains 10 reams (individual packages). There are currently 5 cases of printer paper in stock, but no reams (i.e., the available quantity of reams is zero).

A customer comes into the store and wants to purchase 2 reams of printer paper, so an employee opens up one of the cases of printer paper, gives 2 reams to the customer, and restocks the shelf with the remaining 8 reams. Because the items are set up with a parent-child relationship, when the customer purchases the 2 reams of printer paper at POS, RMH automatically recognizes that a case was opened up. The available quantity of cases is adjusted to 4 and the available quantity of reams is adjusted to 8.

Scenario 2: Wine

The store sells wine by the case and by the bottle. Each case contains 12 bottles. There are currently 10 cases of wine in stock, but no bottles (i.e., the available quantity of bottles is zero).

A customer comes into the store and wants to purchase 2 cases of wine and 6 individual bottles, so an employee opens up one of the cases of wine, gives 6 bottles to the customer, and restocks the shelf with the remaining 6 bottles. Because the items are set up with a parent-child relationship, when the customer purchases the 2 cases of wine and the 6 individual bottles at POS, RMH automatically recognizes that a case was opened up. The available quantity of cases is adjusted to 7 and the available quantity of bottles is adjusted to 6.

Ordering and costs

If you create a parent-child relationship between items, the cost of the child item is updated automatically after you create and receive a purchase order containing the parent item. This is because it is usually more cost-effective to order the parent item and break it open to restock the child item. RMH calculates the cost of the child item as follows: cost of the parent item / child quantity.

Note: The child item cost calculation is not connected to the Cost Update Method selected under File | Configuration | Inventory rules. However, the cost of the parent item may be updated based on the selected Cost Update Method.