Issue What Inventory posting setup means ?

1. Automatic Cost Adjustment 
E.g. if selected weekly

Purchase something on 010109 and sell it on 010209 i.e. next day. Add some charges to this purchase on 030109 i.e. the day after the COGS will be updated as the date falls in range of ur selection i.e. weekly. If u post the charges on 020209 then u will have to run adjust cost to see the actual change.

So in nutshell the shorter the period the more inaccurate u r :)

2. Average Cost Calc Period

Average cost in NAV always worked on valuation date and application method has been FIFO. But for every exit the principal is COG S = weighted avg of all inbound on or before valuation date of exit.
But this has been bucketed from 5.0 onwards this works if ur date falls in the period selected in this option.
So if selected weekly COGS for a week will be the weighted avg of the week on or before the valuation dates posted in the week where u r looking at COGS.