Scope and Locations — where stock sits, and the four ways every movement is labeled¶

What this covers. Every time stock moves — received, sold, transferred, wasted, counted, prepped — the system has to answer two kinds of question: where did it go, physically? and whose numbers does it belong to? This chapter teaches both. First, locations: the storage locations inside a warehouse where goods actually sit, and the small set of virtual ones (a vendor, a customer, the bin, the prep line) that stand for "the outside world" on the other side of every entry. Then the four labels stamped on every movement — Company (the tenant it belongs to), Warehouse (the accounting contour whose books hold its value), Restaurant (whose profit-and-loss it lands in), and Channel (how a sale reached the business). Along the way: why a business chooses how finely its stock is valued by how many warehouses it creates rather than by any setting; the storage locations that split physical quantity inside one warehouse without splitting its value; and the consumption warehouse selected by each restaurant, and the explicit transfers that let a shared prep warehouse supply several restaurants without misstating any of them.

1. Every movement is a move between two locations¶

Before the four labels, you need the thing they label. The whole stock system is built on one humble primitive: a stock movement — a quantity of one item going from one location to another. Receiving, selling, transferring, wasting, counting, prepping a batch — every one of them is the same shape, a from → to. Nothing is created or destroyed; quantity just moves.

This is the discipline of double-entry: in bookkeeping, every entry touches two accounts so the books always balance. Here the two "accounts" are two locations. If 10 kg of flour leaves a storage location, those 10 kg have to arrive somewhere — even if "somewhere" is the scrap bin or a customer's plate. There is no such thing as stock that simply vanishes; if it's gone, it went to a named place, and that place is the second half of the entry.

Why insist on this? Because "stock disappeared and I don't know where" is exactly the hole every inventory system is built to close. Forcing a destination on every movement means the books always answer where did it go, which in turn makes the month-end count a reconciliation rather than a mystery.

Worked example. You waste 2 kg of spoiled lettuce. That is not "−2 kg lettuce, reason unknown." It is one movement: 2 kg lettuce, from the walk-in fridge, to scrap. That location's on-hand drops by 2 kg; the scrap side records that 2 kg arrived there. The entry balances, and "where did the lettuce go" has an answer.

2. Storage locations vs virtual locations¶

Locations come in two flavors, and the difference is the key that unlocks the rest of this chapter.

A storage location — an internal location, in the model's own word — is a count area the business manages inside one warehouse, where goods physically sit: a walk-in, a back room, a bar. Each carries its own quantity, so it can be counted and corrected without pretending stock sits somewhere else. The warehouse remains the accounting contour: the storage locations inside it share one value pool, one average cost, and one period close.

A virtual location is not a place you own or count. It is a stand-in for "the other side" of a movement — the counterparty an entry needs in order to balance. The system seeds a small, fixed set of them per company, and they exist purely so that every movement has a legitimate second half. You never count them; their job is to absorb or supply the goods that cross your boundary.

There are seven location usages in all — one real, six virtual:

Usage	Real or virtual	What it stands for
internal	real	a storage location inside a warehouse — managed and counted by the business
supplier	virtual	the outside vendor stock comes from on a goods receipt
customer	virtual	the outside buyer stock goes to on a sale
scrap	virtual	the bin — where waste, spoilage, and expired stock go
production	virtual	the prep line — the in-between place during a batch prep
transit	virtual	"in the van" — the in-between place during a transfer between warehouses
inventory loss	virtual	the reconciling counterparty for count differences (shortage and overage)

Why have these at all? Because a movement needs two locations, and not everything that touches your stock is a place you own. When flour arrives, the real warehouse gains it — but where did it come from? Not another location of yours. It came from the vendor, which isn't yours to count, so "supplier" stands in as the source. When a dish is sold, the real warehouse loses ingredients — but they don't move to another location of yours; they go out the door to the customer, so "customer" stands in as the destination. The virtual locations let the books stay balanced and one-way without pretending the outside world is part of your inventory.

The walk-in, the bar, and the back room are therefore not annotations beneath a location: they are the warehouse's storage locations. A receipt put away in the walk-in lands there, and a relocation from the walk-in to the bar changes the quantity in each. Because both ends belong to the same warehouse, that relocation changes neither warehouse quantity nor value.

Here is how the everyday operations decompose — note that each is the same primitive, distinguished only by which location is real and which is virtual, and on which side:

Goods receipt (the receiving of goods from a vendor): supplier → internal. Stock crosses in from the vendor; your warehouse gains it.
Sale: internal → customer. Stock crosses out to the buyer; your warehouse loses it.
Waste: internal → scrap. Stock leaves for the bin (spoilage, breakage, expired food).
Transfer between two of your warehouses: internal → transit → internal. Two legs, with "transit" as the in-between — goods leave one warehouse, ride in transit, then land in the other. (Both ends are real; transit just models the gap.)
Production (prepping a batch): internal → production to consume the inputs, then production → internal to yield the finished prep back into a storage location. (More in the recipes chapter; here the point is only that "production" is the virtual in-between.)
Count difference at close: stock loss → internal when the stock count finds more than the book said (an overage), or internal → stock loss when it finds less (a shortage). The difference is absorbed by the virtual loss location so the perpetual book is pulled to match the physical truth.

Worked example. You receive 100 kg of flour, then sell dishes that consume 8 kg, then a 1 kg sack splits and you bin it. Three movements, three different "other sides": supplier → dry goods (+100), dry goods → customer (−8 across the sold dishes), and dry goods → scrap (−1). That storage location nets to 91 kg on-hand; the vendor, the customers, and the bin are virtual and never counted. Every gram is accounted for.

3. Why a movement carries four labels, not one¶

Knowing where stock went (§1–2) is only half the story. The other half is whose books it belongs to — and that turns out to be not one question but four, because the answers sit at different grains.

A naïve system uses a single location concept and hangs everything off it: "the restaurant has 40 kg of flour worth €X and sold €Y of pasta this month." That collapses the instant two restaurants share a prep warehouse, because the question "what is a kilogram of flour worth right now?" and the question "which restaurant earned the margin on that pasta?" have different correct answers at different grains:

Value is a property of the warehouse whose books hold the stock. A kilogram of flour in the shared prep warehouse has exactly one cost — its weighted-average cost (abbreviated WAC), one price for the whole accounting period, struck at the close. That cost is a function of what was received into that warehouse and at what price — not of which restaurant will eventually eat it. If you valued flour per-restaurant you would have to invent a price the moment it crossed an internal boundary, and you would get two different "costs" for one identical sack.
Profit-and-loss is a property of who is responsible for the result. A restaurant's food-cost percentage, its margin, its cost of goods sold — these are management questions about a business unit, not about a building. One shared prep warehouse can supply three restaurants; each restaurant needs its own profit-and-loss; the warehouse itself earns no margin.

So a single stock movement gets stamped with four labels, each answering a different question, and they are deliberately independent — knowing one tells you nothing about the others:

Label	The question it answers	The grain it owns
Company	Whose tenant is this?	Isolation — every row belongs to exactly one company
Warehouse	Which books hold its value?	The accounting contour — valuation, on-hand, count, and close together: one cost pool, one WAC per company-and-warehouse-and-item
Restaurant	Whose profit-and-loss?	Profit-and-loss / cost-of-goods attribution — stamped onto the movement, never owns the stock
Channel	How did the sale arrive?	Reporting only — never a stock or valuation axis

The rest of this chapter takes them one at a time. The single most important idea, worth stating up front and returning to at the end: value rides the warehouse label; profit rides the restaurant label; and those are not the same axis. That separation is what lets one physical warehouse serve two profit-and-loss statements without double-counting a single gram of flour.

This is not a Sizl invention. It is the canonical separation, in every serious inventory system, between the valuation location (where stock is valued) and the profit center (the responsibility dimension a result is attributed to) — the latter stamped onto transactions rather than owning the stock. We adopt the standard, named pattern.

4. The four labels, one at a time¶

4a. Company — the tenant boundary¶

A company is the top of the world: the tenant that owns everything beneath it. Every warehouse, every restaurant, every stock movement, every cost figure, every accounting period lives under exactly one company and is invisible to all others. It is the isolation boundary, not a stock concept — it answers "whose data is this?" and nothing finer.

Why is it a hard wall rather than a soft filter? Because tenants must never see one another's stock or numbers, not even by accident. So the rule is fail-closed: every company-scoped read is filtered to the one resolved company, every write is stamped with it, and if no company is resolved the operation refuses rather than silently returning or touching another tenant's data. The active company is established from the authenticated session, never supplied by the caller.

For the stock domain, the practical consequences are:

Every cost figure is keyed by company, warehouse, and item together. The company prefix is always present — even when it goes unmentioned, it is implied by the fact that the warehouse and the item are themselves company-scoped.
"Company-wide" valuation is not a separate grain. It is only the degenerate case where a company happens to run a single warehouse. The moment there are two warehouses, there is no single company-wide cost for an item — there are two warehouse costs (see §4b).
A company carries a single trading currency and a single tax posture (US vs EU), which the costing layer reads. The company itself does no tax or currency math; it is purely the boundary. (Costing and tax live in the costing chapter.)

4b. Warehouse — the accounting contour¶

A warehouse is a contour of the books, not a place: the set of storage locations a business values together (§2). It can be a restaurant's small back-of-house store, a bar's stock of bottles, or a large shared commissary (a central prep-and-hold warehouse that supplies several restaurants — by explicit transfer, §5). The model does not grade these by size or importance; what separates them is how many restaurants each supplies (§5) — and, before that, which family of item it was opened to hold at all (below).

The warehouse is the accounting contour — the grain at which value is computed, physical truth is asserted, and books are sealed. Three things that could in principle have lived at three different grains deliberately live at exactly one:

                    ┌─────────────────────────────┐
                    │        one warehouse        │
   what it is worth │  cost pools, one WAC each   │
   what is really   │  the count that walks it    │
     there          │                             │
   when it is final │  the period close           │
                    └─────────────────────────────┘

They are bound together on purpose, and the binding is what makes a close auditable. The value the close publishes is proved by a count; the count is complete for exactly the storage locations the pool covers; the pool is exactly what that count walked. Break the alignment — value one set and count another — and the closing figure stops being reproducible from any one walk, which is the same as saying nobody can check it.

What that grain owns, concretely:

One shared cost pool per warehouse. Within a warehouse, an item has exactly one weighted-average cost. Every unit of that item sitting in that warehouse is valued at that single number; there is no per-restaurant or per-receipt sub-price for valuation. (See the stock-ledger and food-attributes chapters — but quantity and value live at the warehouse grain.)
The same item can cost different amounts in different warehouses. Flour received cheaply into the commissary and flour received at a higher price into a satellite store are two distinct cost pools. This is correct and intended: you value stock where it sits, at what it actually cost to get it there.
Counts, their overage and shortage adjustments, and period close happen at the warehouse grain. Each warehouse closes its own books on its own calendar, in its own timezone, at its own cadence — a rhythm it declares (weekly, monthly, quarterly, annual, or simply count-to-count) that pre-fills the next boundary without ever forbidding another date. A physical count reconciles one warehouse's perpetual book to its physical truth; any shrinkage found at close is charged out in that warehouse, at that warehouse's own price for the period (the reconciliation chapter has the detail).
Or, where the contour keeps the asset register instead, the durable assets placed on it. Such a warehouse carries no pools at all: its balance is the book value of the units its books hold, confirmed serial by serial on its own walk. Every unit the company owns stands on exactly one warehouse, in one of its storage locations, from the day it is registered — so adding up the warehouses accounts for the whole register, with nothing ownerless and nothing counted twice. See Fixed assets.

The reason value must sit here and nowhere else is the one from §3: a kilogram of flour in a warehouse has exactly one honest cost for the period, set by what was paid to land it there. Attach value to anything coarser (the company) and you lose the two-warehouse case; attach it to anything finer or sideways (the restaurant) and you have to invent a transfer price the moment stock crosses an internal boundary. The warehouse is the grain at which "what is this worth right now?" has a single, real answer.

A warehouse admits one class of item, and only one. Everything a business buys falls into two families that are counted, valued and closed by different arithmetic: the things bought to be used up — stock carried at a weighted-average cost, small tools pooled until they break, goods expensed at the door — and the durable assets capitalized as individual units in the register. A warehouse is opened for one family or the other; the choice is made when it is created and can be revisited only while the books are still empty — once anything has landed there, or is drafted or routed to, it stands for the warehouse's life.

operating stock                       fixed assets
  flour, oil, cups, pans                ovens, mixers, vans
  quantities in each room               one identified unit each
  valued at the period's price          carried at book value
  walked by counting                    walked by ticking serials

Why one and not both: a walk is a single gesture. In a stock warehouse it asks how much is here and the answer is a number per item; on the register's books it asks is this exact unit still here and the answer is a tick per serial. A warehouse holding both would need two walks that seal as one, a balance that is half pool and half book value, and a count sheet where an unexpected sighting could quietly invent stock inside the asset books. Splitting the families by contour makes all three questions have one answer each. It also lets the two run on the rhythms they deserve: flour wants a monthly walk, a fleet of ovens wants an annual one, and neither has to drag the other (see close policy in Period close).

The rule is about arrival, not history. It is asked wherever something lands somewhere new — a receipt line's placement, a count row claiming a quantity, the floor a production run works on, the receiving end of a transfer, a unit registered by hand. On a document that posts, the answer is a refusal at the door; on a stock count — a record of looking that creates no movement — a mismatched observation cannot supply complete closing evidence (see Period close §2). It is never asked of what is already on the books: whatever a contour holds today stays countable, correctable, removable and closable. A rule about where things may go must never make what is already there unreconcilable.

Because both families exist from the first day of trading, a business opens with two contours: one for operating stock, linked to the restaurant it feeds, and one for the asset register, which nothing is ever consumed out of and no restaurant draws from. A shop whose only durable asset is its espresso grinder still has somewhere honest to put it, and one taking delivery of a whole fit-out of ovens and cold rooms does not have to invent a set of books on the morning the van arrives. More contours of either kind come later, when the business has a question its current ones cannot answer.

Every warehouse otherwise works the same way: it holds what it admits, begins on one shared opening date, and counts and closes as described above. A site that has physically separated its prep does not need a different kind of warehouse for it — the production floor is simply another storage location inside the warehouse that feeds it, so raw goods walk onto it by relocation, a batch may draw its inputs from it, and it is counted and closed like any other. The full story is in Recipes & production.

4b.1 Valuation strategy is a shape, not a setting¶

Admission settles which family a warehouse holds; it says nothing about how many warehouses that family gets. That second question — one blended cost for the whole business, or a cost per site — is the one below, and businesses answer it differently. Some want one number to explain and one walk to organize. Others want to know exactly which site is losing money on olive oil, which needs each site valued on its own.

Many systems expose that as a mode: a company-level switch between "value everything together" and "value each site separately." This model has no such switch, and will never have one. The choice is made by how many warehouses the company creates — the same decision, expressed as a shape instead of a flag:

one blended cost for the business
  → create ONE materials warehouse
    one pool per item · one average · one count · one close

see where each site's loss happens
  → create ONE warehouse PER SITE (or per room)
    independent pools, independent counts, independent closes

Why a shape rather than a flag: a flag would let the pool, the count, and the close come apart. Blend the pools across three warehouses while each one still walks its own storage locations on its own week, and the blended figure is confirmed by no single count — you could never point at one walk and say "this is the evidence for that number." Making the contour the only dial keeps the three permanently aligned, and it means there is exactly one set of close rules in the world rather than one per mode.

Two consequences worth internalizing:

Coarser is always available by arithmetic. A company-wide figure is just the sum of its warehouses' figures, and a company-wide unit cost is the value-weighted blend of theirs. You never lose the coarse view by cutting fine; you only lose the fine view by staying coarse.
Cutting finer later is honest work, not a re-computation. Splitting one warehouse into three is done the way a real business would: create the new warehouses with empty initial balances and transfer what belongs there. The transfers carry both the quantities and their value. What the old pool's closed periods settled stays settled, and the finer pools account for what they actually receive.

A newcomer's rule of thumb: start with as few contours as you can defend. The pair a business opens with — one materials warehouse and one for the register, closing once a year — is a perfectly serious configuration for a single site or a small group, and the annual walk of that second one is the whole of "the asset check" with no extra ceremony invented for it. Cut finer only when you have a question the coarse books cannot answer.

4b.2 Storage locations — quantity below the contour, without a second value pool¶

Inside a warehouse, "where exactly?" is a real stock question. The walk-in, the bar, the back room, the dry-goods corner by the door — each is one of its storage locations. Every warehouse has one default storage location for documents that do not name a more precise destination; the others are named explicitly when goods are put away, moved, consumed, written off, or counted.

A storage location carries quantity but not its own value pool. All the storage locations in one warehouse share the warehouse's weighted-average cost and close together. Moving 12 bottles from the back room to the bar reduces one by 12 and raises the other by 12, while warehouse quantity and value stay unchanged.

warehouse   the contour: one value pool and one close
  └ storage location   the count area: "walk-in", "bar"
      └ note / label   free text: "shelf 3", "with Vasya"

The warehouse's opening date governs all its storage locations, with the initial quantities stated separately for each. A stock count then verifies one storage location at a time. The warehouse's initial balances, location coverage and archive conditions belong to Period close §2. Each chosen count is then read against the book kept for that storage location, and the differences that survive are approved one by one before any of them reaches the ledger — a difference is recorded where the walk happened, and one storage location's loss is never re-attributed to another. The warehouse's figure is the sum of the parts: it is derived, never a place a difference is posted to.

4c. Restaurant — whose profit-and-loss (the profit center)¶

A restaurant is a profit center: the business unit whose food cost, cost of goods sold, and margin we report. It also carries a local clock — its own working hours and timezone — which is what stamps a sale with the right business date (the calendar day a sale belongs to in the restaurant's own local time, regardless of the raw timestamp). That business date drives which recipe version applies and which accounting month a sale lands in.

The restaurant is the profit-and-loss attribution grain — and nothing more in the stock domain. Critically:

A restaurant does not own a stock pool and is not a valuation grain. It never holds the authoritative on-hand or the authoritative cost of an item. There is no per-restaurant cost of a kilogram of flour. Per-restaurant profit-and-loss is a roll-up of attributed consumption — you sum the value of the consumption movements stamped with that restaurant over the period — not a second place where stock is valued.
The restaurant label is stamped onto a movement, not owned by stock. When a sale consumes stock, each resulting consumption movement is stamped with the restaurant that earned the sale (and with the warehouse the route resolved — one of that restaurant's own stores, §5). The restaurant rides on the movement as an attribution tag; it does not own the movement.
The restaurant is purely a business/reporting axis — it is not an authorization boundary. Tenancy is the company's job (§4a). This is exactly the right footing for a profit center.

A word the model deliberately avoids here: do not call a restaurant "the kitchen." A kitchen station on an item (§5), or a warehouse named kitchen, are fine and appear below — but the restaurant is the business and its profit-and-loss, not a room.

The company roll-up (the whole-tenant profit-and-loss) is then the aggregate over restaurants and the company's warehouses — never a separately-valued grain of its own.

4d. Channel — how a sale reached the business¶

A channel records how a sale arrived — dine-in, a specific delivery marketplace, a till — so that revenue and consumption can be sliced by channel in reporting. A channel is an entry the company authors in its own selling vocabulary: Glovo, Wolt, the hall. The selling surface owns the notion — a channel groups the storefronts a business sells through and carries their dine-in-or-delivery nature (taught in Menus & storefronts); the stock side reads it as attribution on the sale, alongside the restaurant: a ticket that records the storefront it sold through answers to that storefront's channel, and a ticket that records none is sliced by the free-text source label its feed carried.

The one hard rule: a channel is never a stock axis and never a valuation axis. Stock is not held "in a channel," is not counted by channel, and is not valued by channel. Two pasta plates sold through two different channels deplete the same warehouse cost pool at the same weighted-average cost; only the reporting dimension differs. Channel is therefore the lightest of the four labels — a slice for the profit-and-loss, with no claim on where stock sits or what it is worth. It is listed here so the set of four is complete and so no one is tempted to model a channel as a location.

5. The restaurant ↔ warehouse relation (consumes-from / supplies)¶

This is the relation that makes the whole separation pay off.

One consumption warehouse, shared when appropriate¶

A restaurant selects one current operating-stock warehouse for its sales and internal consumption. Several restaurants may share that warehouse: their storage locations keep quantities distinct, its period price values the goods together, and each restaurant receives its own consumption cost.

This consumption relationship belongs to the restaurant. General associations with warehouses used for other work remain separate; a restaurant's relationship with a warehouse does not create a stock pool or ownership of its storage locations. Historical consumption belongs to the warehouse where it was recorded, even after the restaurant chooses a different warehouse for current consumption.

Goods travel by explicit transfer; consumption stays home¶

When a commissary preps dough for a restaurant, the dough physically leaves the commissary — so the books must say so. The dispatch is recorded as an explicit transfer (internal → transit → internal, see the stock-ledger chapter) into the restaurant's own store, and only then is it consumed. The hard rule that follows: a sale's consumption draws from the selling restaurant's selected consumption warehouse — never a remote pool the goods have physically left.

Why so strict? Because the alternative makes two books lie at once. Imagine Downtown's pizza sales depleting the commissary's dough pool while the dough physically sits in Downtown's own store: the commissary's book now claims dough it no longer holds, and Downtown holds dough its book has never heard of. Neither warehouse can be counted truthfully — and the physical count is the one moment the whole perpetual system is reconciled against reality. Recording the transfer keeps every warehouse's book equal to what its storage locations actually hold, at both ends, at all times.

Value rides along: the transfer carries the goods at the sending warehouse's weighted-average cost and joins the receiving store's own pool — value-conserving, with no invented internal price. The worked example in §7 shows the full arc.

Stations — how an item names its preparation route¶

Routing needs one more concept. A station is an item fact — kitchen, bar, and so on — naming the kind of work that makes it, not a stock location. The vocabulary is per-company and deliberately small. A made-to-order item declares its station once in the shared catalog, while each restaurant may map that station to a storage location inside its consumption warehouse. An unmapped station uses the restaurant's default source; a directly sold stocked item is stationless.

The location precedence and open-period correction rules belong to sales and consumption.

6. Valuation grain vs profit-and-loss grain — stated once, precisely¶

This is the rule to carry away:

Valuation grain = Warehouse. On-hand and value are computed per company-and-warehouse-and-item. One shared cost pool, one weighted-average cost, per warehouse. Counts, overage and shortage adjustments, reconciliation, and period close all happen here — which is why the warehouse is called the accounting contour, and why how many of them a business creates is its valuation strategy (§4b.1).
Profit-and-loss grain = Restaurant. Cost of goods and margin are a profit-center roll-up of the value of consumption movements stamped with that restaurant over a period. A restaurant is never a place where stock is valued.

A consumption movement is therefore stamped with both: a warehouse (whose pool it depletes — and therefore what it costs) and a restaurant (whose profit-and-loss it lands in). The same physical depletion answers the valuation question at the warehouse grain and the profit-and-loss question at the restaurant grain from one record. That is how a prep cost computed once at the commissary can travel — by transfer — into each restaurant's own store and still land in whichever restaurant's profit-and-loss sold the product.

7. Worked example: a commissary serving two restaurants¶

Setup. One company ("Flow") runs two restaurants and one shared commissary:

Warehouses: Commissary (preps and holds dough), Downtown Store, Uptown Store.
Restaurants (profit centers): Downtown, Uptown.
Consumption: Downtown selects Downtown Store, and Uptown selects Uptown Store; each uses a default storage location there.
Supply: Commissary transfers prepped stock into either warehouse.

Step 1 — Receive flour into the commissary. A goods receipt posts a supplier → Commissary movement: 100 kg of flour at €0.50/kg = €50. The commissary's flour pool now quotes a provisional price of €0.50/kg — the only arrival so far, and the figure the close will strike unless a later delivery moves it. Note the cost belongs to the warehouse, decided by what was paid to land it there. No restaurant is involved yet — receiving is not a profit-and-loss event.

Step 2 — Produce dough at the commissary. A production move-pair consumes flour Commissary → production and yields dough production → Commissary. Say 80 kg of flour (€40 at €0.50/kg) plus other inputs yields 90 kg of dough; the input cost rolls into the dough's cost — suppose it works out to €1.20/kg. Dough is a stocked prep item — formally, a semi-finished good: an item the business makes and stocks in advance, with its own recipe — held at the commissary: again a warehouse-grain valuation, still no restaurant attribution. (Production mechanics live in the recipes chapter; the point here is that the cost pool is the commissary's.)

Step 3 — Transfer dough to each restaurant's store. The commissary dispatches 30 kg of dough to Downtown Store and 20 kg to Uptown Store — two ordinary transfers, each internal → transit → internal. The dough leaves the commissary at its €1.20/kg provisional price (€36 and €24 of value respectively) and joins each receiving store's own dough pool — here each store held no dough before, so each pool's provisional price is also €1.20/kg. Should the commissary's close strike a different figure, the difference follows the dough to each store (see Period close, what a close sends on). Value is conserved end to end; nothing was bought or sold. The dough now physically sits — and is booked — in the restaurants' own stores, and the commissary's book dropped by exactly what physically left it.

Step 4 — Sell a pizza at Downtown. A customer orders a pizza at the Downtown restaurant. The sale is unpacked, against the recipe in force on the sale's business date, down to its raw ingredients; one of them is 200 g of dough. Routing resolves the warehouse: the pizza's item station is kitchen, and Downtown maps kitchen → Downtown Store. The consumption movement is:

from Downtown Store (internal) → to customer (virtual)
item = Dough, quantity = 0.200 kg
Warehouse = Downtown Store — the valuation source: depletes its own pool at its dough price — €1.20/kg provisionally, restated to the struck figure at the close → 0.200 × €1.20 = €0.24
Restaurant = Downtown — the profit-and-loss attribution: Downtown earned this sale
Channel = dine-in / marketplace / … — the reporting tag

Step 5 — Sell the same pizza at Uptown. Identical unpacking, identical 200 g of dough — drawn from Uptown Store's own pool, also at €1.20/kg, also €0.24. But this movement is stamped Warehouse = Uptown Store and Restaurant = Uptown. Same item, same cost, two truthful books.

Step 6 — Roll up. At period close:

Commissary (valuation / close grain): it produced 90 kg of dough and transferred 50 kg out; its book says 40 kg on-hand at €1.20/kg — exactly what its storage locations hold. It counts and closes its own book; any shrinkage found leaves it at its own period price. There is one dough cost, computed once, regardless of which restaurant eventually serves it.
Downtown Store: received 30 kg, consumed 0.2 kg → book and physical truth agree at 29.8 kg. Uptown Store: likewise at 19.8 kg. Every warehouse's count is truthful, because the dough's physical journey was recorded as movements at every step.
Downtown profit-and-loss (profit-center grain): dough cost of goods includes its €0.24. Uptown profit-and-loss: dough cost of goods includes its €0.24. Each restaurant's food-cost percentage is computed from the value of consumption attributed to it, at a cost the commissary computed once.

The payoff. One sack of flour was valued exactly once (at the commissary, at what it cost to land there), and one dough cost was computed exactly once (at the commissary) — then that cost simply traveled with the transfers, joining each store's own pool value-neutrally, so each pizza's €0.24 reads straight off the selling restaurant's own warehouse. Two restaurants each got a correct, independent profit-and-loss — valuation rode the warehouse label and attribution rode the restaurant label — and every warehouse's book matched what it actually held at every moment, because the dough's physical moves were explicit. The explicit transfers let the commissary supply both restaurants while keeping both ends countable. Without the transfer, Downtown's sales would have silently drained a pool whose goods left the commissary days earlier — and at least two counts would have stopped being true.

8. Common pitfalls¶

Valuing per restaurant. There is no per-restaurant cost of an item. If you find yourself computing one, you have collapsed the valuation grain into the profit-and-loss grain — value at the warehouse, attribute to the restaurant.
Treating "company-wide" as a real valuation grain. It is only the single-warehouse degenerate case. With two warehouses there is no single company cost for an item.
Hunting for a valuation-strategy setting. There isn't one, by design. If you want a single blended cost, create a single materials warehouse; if you want per-site isolation, create a warehouse per site. The topology is the strategy (§4b.1).
Treating a storage location as a small warehouse. A storage location has a quantity and its own count, but no average cost or close. The moment a place needs separate valuation and a separate period, it needs to be a separate warehouse.
Putting the oven where the flour is. A warehouse admits one family of item. A capitalized unit goes onto books kept for the register — never onto the contour that values stock — and a sack of flour never lands on the register's. The delivery that brings both is still one document; its lines simply point at two contours (§4b).
Modeling a channel as a location. A channel is a reporting tag on the sale; it never holds, counts, or values stock.
Treating a consumption warehouse as exclusive to one restaurant. Several restaurants can select it and share its period price while retaining separate consumption attribution.
Consuming from a warehouse the goods have already left. If the commissary physically dispatched stock to a restaurant, record the transfer; consumption then depletes the restaurant's own store. A sale that reaches back into a remote pool makes two books lie at once — the commissary's book claims stock it no longer holds, and the restaurant holds stock its book has never seen.
Forgetting both stamps on a consumption movement. A consumption movement needs both a warehouse (cost pool / valuation) and a restaurant (profit-and-loss attribution); dropping either breaks one of the two reports.
Letting stock "vanish." Every movement has a real second location. If goods are gone, they went to a named place — a customer, scrap, a stock-loss adjustment — never nowhere.