Defining Balance Types

MAC-PAC uses up to four balance types. Balance types allow you to segregate inventory by the way it will be used. The four balance types are defined once for the entire system. For all inventory transactions, you must indicate the balance type of the inventory.

Balance types are defined through the Balance Type Maintenance conversation. This option appears on the Material Control Menu within the Inventory Control module.

When you define a balance type, you first define how that type will be identified throughout the system. Three fields contain this descriptive information:

· Code. A one-character field. Used on transaction screens to indicate the balance type.

· Column Heading. An 8-character field. Used to specify the text that will appear on screens and reports where inventory levels are listed by balance type.

· Description. A 25-character field.

In addition, you must define how the balance type will be processed by the system. For each balance type, there are three flags:

· On-hand Balance Flag. This flag determines whether the balance represents inventory that is physically present in the warehouse at this time for use in manufacturing. This flag is set to Y for the first balance type and set to N for the other three balance types. It cannot be changed. When the On-hand Balance flag = Y, you cannot change the other two flags. For more information, refer to the On-Hand Balance Type section of this key concept.

· Order Planning Flag. Determines if the inventory is available to meet demand in the planning modules. This flag affects processing in the Master Scheduling and Requirements Planning modules. When this flag is Y, the inventory is considered available for manufacturing. Additional supply orders will not be generated or recommended until all inventory available for planning is consumed.

· Distribution Flag. Determines if inventory balances can be reserved for customer sales orders. This flag affects processing in the Order Processing module. When this flag is Y, the inventory is considered available for distribution. In general, this flag is Y (yes) for inventory stored at a distribution warehouse.

The two valid values for these flags are Y (yes) and N (no). Figure 2 indicates how the two flags operate in conjunction with each other. The flags in bold type are set by the system and cannot be changed.

You may establish a balance type with three 'No' flags. This might be used to record inventory balances that cannot be used for manufacturing or distribution. For example, it might be used for inventory that has been damaged or expired. It might also be used for inventory that has been set aside for a special function such as research and development.

In general, if the Order Planning flag is Y, all items in the balance type are considered "manufacturing inventory." If the Distribution flag is Y, all items in the balance type are considered "distribution inventory." When you fill customer orders, you can specify whether the orders should come from manufacturing or distribution inventory. If both the Order Planning flag and the Distribution flag are Y for a balance type, the balance type can be used to fill orders that specify either manufacturing or distribution inventory. For more information, refer to the Manufacturing and Distribution Inventory section of this key concept.

Note: All balance types where the Distribution flag = Y must have the Order Planning flag set to the same value. This rule ensures that all inventory available for distribution is handled the same throughout the system. The following example illustrates this point.

Not allowed:

Balance Type	On-Hand flag	Order Plan flag	Distribution flag
A	N	Y	Y
B	N	N	Y

Either type A must be changed to NNY or type B must be changed to NYY.

On- Hand	Plan Flag	Distrib Flag	How Balance Type Is Processed	Typical Use
Y	Y	N	Inventory is used primarily for manufacturing. Any customer sales orders sourced from this inventory are automatically included as demand in the planning modules. Inventory reservation is not used for the sales orders.	Inventory physically present in the warehouse for use in manufacturing
N	Y	N	Inventory balance is available to meet demand requirements in MS and RP (from forecasts, actual customer sales orders, or manufacturing activity). Inventory reservation is not used for the sales orders.	In-transit inventory, or inventory that should be considered for planning but is not necessarily physically present in the warehouse
N	N	N	Inventory balance cannot be used to meet planned demand from the factory or to fill customer sales orders. Although MAC-PAC tracks the quantity of inventory in this balance type, the inventory is not included in any calculations of available inventory.	Rejected inventory waiting to be returned to the vendor, or obsolete or damaged inventory.
N	N	Y	Inventory is intended for sale to customers. It is included in the inventory reservation and backorder processing in Order Processing. Inventory balances are ignored by the planning modules (unless the Available for Planning flag on the warehouse is Yes).	Finished goods at distribution warehouse
N	Y	Y	Inventory is considered by both the planning modules and the inventory reservation/backorder processing logic.	Finished goods at manufacturing warehouse

Balance Type Flags

Flags in bold type are system defined and cannot be changed.