Oh, the dreaded use of single quotes for an identifier. Don't use single quotes for an identifier. This is what you want:
Select IMSYS01.on_hand_qty * IMSYS01.piece_weight,
IMSYS01.sku_no,
(case when(imsys01.warehouse = '109') then 'foreign' else 'domestic' end) as vLocation
From IMSYS01 IMSYS01
Where (IMSYS01.sku_no < '99999' And IMSYS01.velo_code <> 'X')
Group By IMSYS01.on_hand_qty * IMSYS01.piece_weight,
(case when(imsys01.warehouse = '109') then 'foreign' else 'domestic' end),
IMSYS01.sku_no;
This is a great example of why you should never use single quotes for identifiers. It causes confusion. SQL Server supports other methods, but you don't even need to escape vlocation
. It is a fine identifier just by itself.