In-Transit Warehouse

In-transit warehouses are used in Transfer Control to indicate that inventory is currently being shipped between warehouses.  When the goods are placed on the truck at the sourcing warehouse, a transaction is entered to transfer the inventory to the in-transit warehouse.  When it reaches its destination, it is transferred from the in-transit warehouse.  Since two transfers have taken place, it is possible for two transfer price variances to be incurred.  To ensure that the transfer is accounted for properly, the price in the in-transit warehouse should be identical to the price at either the sending or the receiving warehouse.  The in-transit price should equal the price at whichever warehouse retains ownership of the goods while in transit (as determined by the FOB code).