Understanding How Green Coffee Costs Change Over Time

How Green Coffee Costs are Calculated

RoasterTools uses a weighted average cost model to track the costs of your green coffee inventory. This method averages costs by factoring in both quantity and price with each purchase, giving more weight to larger quantities for an accurate reflection of actual costs over time.

The system automatically updates your inventory cost to accurately reflect the weighted average every time you purchase green coffee.

Here’s what happens behind the scenes:

1. Initial Price Sets the Base Cost

   The base price is either the price you enter when you created the green coffee or the price you've entered in when you create your first purchase of the green.

2. Purchases Impact the Cost

   New purchases at different prices blend into the current cost based on quantity.

   Example: 100 lbs at $4 + 200 lbs at $5 = a weighted average of $4.67/lb.

3. Inventory Adjustments will not Impact the Price per Pound*

   If you make an inventory adjustment, it will not impact the cost per pound of the green coffee. It will only affect the total value of coffee you have on hand.

Where Green Coffee Costs Show Up

Here’s where you see those calculations in action:

Insights / Reports:

• Green Operations Report (Production Summary Reports > Green Operations Report)

  Show current weighted average green costs.

• Roast Operations Report (Production Summary Reports > Roast Operations Report)

  The cost for the roast is reflective of what the average weighted cost of the green (or pre blend) was at the time the roast was completed.

• Inventory Value Report

  Reflect current inventory value using weighted average cost.

Green Coffee Page:

The price displayed for the green coffee will reflect the weighted average price.

In the Purchase Page for Individual Green Coffee:

Green > three dots > Purchase

This page is where you enter in your coffee purchases and can note the new price. The cost per unit will update after a purchase is recorded. It will now reflect the new weighted average price for the green coffee.

Order Profitability Projections (indirectly)

Product Cost Calculations reflect green costs at time of Production. When we project profitability on your orders we are calculating your product costs, which includes the calculations for the roasted coffee. We calculate the cost of the green coffee for roasts using the weighted average cost when a roast task is completed.

Resetting Green Coffee Cost

If you need to reset your green costs follow these steps:

1. Zero Out the Inventory
   • Go to Inventory > Green Coffee > Update Inventory Count

• Locate Coffee and set the quantity to 0 lbs

1. Record a New Purchase
   • Navigate back to the green coffee page by selecting Inventory > Green Coffee
   • Locate coffee and select the 3 Dots located to the very right of the coffee > select Purchase

• Enter the current inventory and the accurate cost per pound

• RoasterTools will use the new cost going forward