Which organization level must be chosen for stock valuation when implementing production planning and product costing?

The organization level that must be chosen for stock valuation when implementing production planning and product costing is the plant. In the context of SAP S/4HANA, the plant serves as a fundamental organizational unit where inventory management, production processes, and product costing are managed.

Valuation at the plant level allows for detailed tracking and management of materials along with their associated costs. Each plant can have varying valuation methods and can represent a specific geographical location or production facility, providing a clearer picture of costs directly associated with specific production lines, sites, or resources. This granular approach is essential in production planning and product costing as it enables organizations to assess profitability and efficiency at a more localized level.

Choosing the plant for stock valuation ensures that all related processes, including inventory valuation calculations, cost of goods sold, and asset tracking, are accurately aligned with that specific location's operational needs and cost structures. Other organization levels such as storage location, company code, or purchasing organization do not provide the same comprehensive view necessary for effective production planning and costing analysis.