> For the complete documentation index, see [llms.txt](https://docs.rmhpos.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.rmhpos.com/store-manager/configure-pos-and-store-manager/inventory-and-purchasing/setting-up-inventory-rules.md). # Inventory rules 1. Click **File** | **Configuration**. 2. Click the **Inventory Rules** tab. 3. (Optional) Select inventory rules for the store, e.g., whether to update item cost when receiving purchase orders, whether to include landed cost, and what price to display in POS.

Option	Field	Description
Cost Update Method	None	Store Manager can automatically update the cost of items received through purchase orders or inventory transfers. Select this option if you do not want to change existing costs when items are received.
	Last Cost	Select this option if you want Store Manager to automatically update the cost of items based on the item cost on the most recent purchase order.
	Weighted Average	Select this option if you want Store Manager to automatically update the cost of items based on the average cost of all in stock (existing) and new units, e.g., you have 2 units in stock @ $10/ea. and 20 new units just arrived at $12/ea. for a total of $260. The weighted average cost ($260/22 units) is $11.82.
Landed Cost	Use landed cost when receiving merchandise	Select this option if you want to use landed cost, e.g., include tax, shipping, tax on shipping, and invoice discounts in the cost of each item received.
	Default Cost Distribution Method	Select the default cost distribution method (Quantity, Value, or Manual) that you want Store Manager to use to calculate the landed cost. Refer to Landed cost for more information about the calculations used for landed cost.
Price Calculation	Use Minimum Price	Store Manager analyses discount, level, sale, and buydown prices for the item and calculates the lowest price for the item.
	Use Level if it exists. Otherwise use minimum.	Store Manager calculates the price of the item based on the defined price level. If the price level does not exist, it uses the minimum price.
	Prioritize in order of: quantity discount, level, sale, then buydown	Store Manager calculates the quantity discount price. If no quantity discount exists, it uses the price level. If no price level exists, it uses the sale price. If no sale price exists, it uses the buydown price.

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