Why should I price based on highest of?

Question

Aside from ensuring the highest cost is used for calculating retail prices, is there another reason to use the Highest of the Last Ordered Cost, Cost Average and AGLC/BC LDB Cost?

Answer

Typically there's a bit of variance in these costs, usually related to purchasing on LTO. Choosing the highest allows for pricing to the highest retail price within your purchasing cost range.

The biggest piece with selecting the "Highest of" is to avoid pricing against an LTO cost, though this will depend on your pricing strategy. Some clients prefer to pass these discounts on automatically, where some prefer to purchase with the discount, hold, and set up a specific sale manually to pass on the savings. Some choose not to pass the LTO on at all.

Another honourable mention for using the highest of the three is catching errors. In theory, you could have an incorrect Last Ordered Cost (perhaps a typo on the last receive) and GT wouldn’t necessarily catch it as a typo, but errors are more pronounced when you're using multiple data points.