Method and system for determining absorption costs for transfers between inventory sites of a business operation

Abstract

Embodiments of the present invention are directed to a computer-implemented method for determining absorption costs for transfers between a plurality of cost groups of a business operation. In one embodiment, a processing sequence for the plurality of cost groups is determined. For iteration (n) where n>1, a periodic moving average cost of a transferable item is then calculated for each of the plurality of cost groups according to the processing sequence, where the transferable item is to be transferred between the plurality of cost groups. A difference between the periodic moving average cost calculated in iteration (n) for each of the plurality of cost groups and a periodic moving average cost calculated in iteration (n−1) for each of the plurality of cost groups is then calculated. The steps of calculating the periodic moving average cost and calculating the difference are then repeated until the difference is within a specified tolerance.