Calculation of order price for items with different Inventory UOM and pricing UOM

Answer

At Pricelist, price is set for pricing UOM. Although the pricelist shows that UOM as Inventory UOM, but there is no direct relation between UOM displayed at pricelist and the list price of the item but it helps in identifying the price list line. This UOM is the default unit of measurement of the item which helps in uniquely identifying the item.

Application converts the Order quantity to Pricing quantity based on the conversion factor configured at pricing UOM. Then Amount is calculated based on Pricing quantity and Unit Price of the Item. So even if UOM displayed in the price list is Items default UOM but price calculation always happens on the Pricing Qty(calculated using conversion rate).

Example Scenario:

1. Item 'Item1' has UOM 'EACH'(Inventory UOM) and Pricing UOM as 'TON'.
   
   
2. For item 'Item1' the conversion factor between Pricing UOM and Inventory UOM is set as 0.25.
   
   
3. Item 'Item1' is added to pricelist with unit price $10.
   
   
4. Now order is created for item 'Item1' with UOM EACH for quantity 3.
   
   Result: Line Total is $7.5
   
   In above example-
   Pricing quantity= Ordered qty * conversion factor
   Pricing quantity= 3 * 0.25 = 0.75
   Total Amount = Pricing Qty * Unit Price
   Total Amount = 0.75 * $10 = $7.5