Inventory Availability Checking

Inventory availability checking is the calculation of the quantity of the part that is available and can be reserved for a customer order.  The following terms are associated with the inventory availability feature.

Sales Order Line

·      Order Quantity of a line item.  The total quantity of a part that a customer has ordered.

·      Release Quantity of a line item.  The quantity reserved in inventory to fulfill initial shipment of the order.

·      Backorder Quantity of a line item.  The quantity which is not reserved in inventory to fulfill initial shipment of an order but which is planned to be shipped in subsequent shipments.

The calculation is:

Backorder Quantity = Order Quantity - Release Quantity - Ship Quantity

Warehouse Balance

·      Inventory Balance.  The current inventory quantity for the part at the given company/warehouse.  If the order is to be relieved from distribution inventory, relief code of D, the inventory balance is the sum of the distribution balances.  This value is displayed on the order line window screen as "Dist Quantity".

·      Reserved Quantity.  The total of release quantities on all open sales orders that reference a specific part at a given company/warehouse.

·      Backorder Quantity.  The total of backorder quantities on all open sales orders that reference a specific part at a given company warehouse.

·      Available Quantity.  Inventory availability for an item is calculated in one of two ways, based on whether backorders have priority for the warehouse.

Backorders have priority: 
Available Quantity = Inventory Balance minus Reserved Quantity minus Backorder Quantity

New sales orders have priority: 
Available Quantity =  Inventory Balance minus Reserved Quantity

The reserved quantity for the sales order line is set based on this available quantity.

Multiple Location

·      Balance Type Quantity.  The current inventory quantity with a specific balance type in the given company/warehouse/stock location/lot number.

·      Reserved Quantity.  The total of reserved quantities on all open sales orders that refer to a specific item in a given company/warehouse/stock location/lot number.

Relief Code D - Non-assignable parts

The system automatically checks availability of a non-lot assignable part during line item processing.  Line item processing involves the initial entry of an order quantity and the subsequent maintenance and release of the order.  For each line the available quantity, inventory balance and on-order quantity for the part are displayed.

The system checks inventory availability in the following conversations:

·      Sales Order Maintenance

·      Multi-line Inventory Reservation

·      Automatic Order Release

A system option is provided that specifies whether inventory may be over-reserved.  If over-reservation of inventory is allowed, then the system automatically reserves the order quantity for a part.  If the order quantity is greater than the available quantity for the part, a warning message is displayed allowing the operator to reduce the release quantity accordingly if required.  If over-reservation of inventory is not allowed, the system automatically reserves the lesser of available quantity or order quantity for the part and backorders the remainder.  The operator may change the release quantity, but the release quantity cannot exceed the quantity available.

This diagram summarizes the processing associated with this option.

If the Release Quantity is greater than Quantity Available then system processing is determined by whether over-reservation is allowed.  This is outlined in the table below.

Note:    Backorder Quantity is a protected field that is recalculated by the system whenever Release Quantity or Order Quantity is changed.

A warehouse option is provided to specify whether inventory can be reserved for order lines with promised ship dates in the future.  An inventory reservation window is used to determine how far into the future inventory will be reserved for the line when the Automatic Order Release program is run.

If over-reservation of inventory is not allowed and order quantity is greater than the available quantity, so causing the system to automatically place part of the order on backorder, the operator has the following options.

·      Consult the multi-warehouse stock status inquiry screen to determine if inventory is available in another warehouse.  The operator can then change the sourcing warehouse to the appropriate warehouse.

·      Leave the sales order with part of the order backordered.

·      Backorder the entire order quantity.

·      Order the substitute part by closing the original sales order line and adding a line for the substitute part.  The substitute part is displayed on the Order Line window.

·      Close the line.

Relief Code D - Lot-Assignable Parts

Inventory availability checking is handled differently for lot-assignable parts.  An order quantity is assumed to be a backorder unless one or more lots have been reserved for the order.  Over-reservation of a given lot is not allowed.  The release quantity for the order line equals the sum of the reserved quantities specified through lot selection.  The backorder quantity equals the order quantity minus release quantity.  The order quantity can be modified, but it cannot fall below the release quantity; quantity first must be unreserved at the lot level.  The reserved quantity on the order line window be modified for these items.  All reserved quantity changes must be made at the line/lot level.

Relief Code M

The above details relate to orders relieved from distribution inventory, relief code of "D".  Sales orders sourced from the manufacturing warehouse can alternatively be relieved from manufacturing inventory, relief code of "M".  (Sales orders sourced from the distribution warehouse cannot use a relief code of M.)  In this case the following differences occur:

·      The release quantity is always set to the order quantity, regardless of the available quantity unless the Promised Ship Date is outside the inventory reservation window.  The planning modules, Master Scheduling and Requirements Planning, consider sales orders with a relief code of "M" as demand, and will plan accordingly.

·      The inventory balance is calculated as the sum of the on-hand balance and the planning balances for the part.

·      The Available Quantity, displayed for information, is calculated as:

Available Quantity = Inventory Balance - Allocated Quantity

Allocated Quantity is the inventory allocated to fulfill manufacturing orders or sales orders relieved from manufacturing/resources.  Note that two factors can change the calculation of the available quantity:

·     If any inventory balances at the manufacturing warehouse are available for both planning and distribution, MAC-PAC looks at the Sales Order Planning flag for the warehouse on the Warehouse Description file.  If this flag is No, then the reserved quantity is subtracted from the availability quantity.

·     If any distribution warehouses for the plant have an Available for Planning flag of Yes, then the distribution inventory at those warehouses is added to the available quantity.  This flag is defined on the Warehouse Description file.

For more information, refer to the Relief Code and Balance Types key concept in this manual.

Considerations

If an order line causes negative availability for a part, the Availability Exception Report is produced.

If the order hold code specifies that inventory should not be reserved, the release quantity is set to zero, and the availability check is not performed until the order is released from hold.

The inventory quantities displayed on the order line window on the stock status inquiry already reflect changes due to the current order.  For example, if you have added a line for part A with a release quantity of 10, and the stock status inquiry shows a reserved quantity of 50 for this part, then 10 of that reserved quantity of 50 is due to the order currently being processed.

The inventory quantities displayed on the lot selection screen reflect the amount reserved by all other sales order lines, but assume the line being displayed has not reduced available inventory.