Balance Type

Balance types are used to classify inventory in a warehouse according to how it can be used

Must be one of the four balance types defined for the system.  If you are maintaining a manufacturing company/warehouse, the balance type will default to the first balance type, ON-HAND (H).  If you are maintaining a distribution company/warehouse, the balance type must be entered. 

Balance types are defined on the System Control File in Inventory Control - Material Control.  Four balance types can be defined for use throughout the system.  The first type, the on-hand inventory type, is defined for you.  You cannot change either of the two processing flags for the on-hand balance type.  For all other balance types, you must define two flags:

• Order Planning.  Determines if inventory in the balance type is available to meet demand in Master Scheduling and Requirements Planning.  For the on-hand balance type, this flag is Y.  When this flag is Y, the inventory is manufacturing inventory. 
• Distribution.  Determines if inventory in the balance type can be reserved/backordered for customer sales.  For the on-hand balance type, this flag is N.  When this flag is Y, the inventory is distribution inventory. 

Note that both flags can be Y for a balance type, indicating that the inventory is available for both manufacturing and distribution.  This could theoretically result in a situation where inventory reserved for a customer was also planned for use on the shop floor.  There are two ways to avoid this double-counting:

• You can include sales orders sourced from distribution inventory in the demand calculations within MS and RP.  (Sales orders sourced from manufacturing inventory are always included as demand).  This option is specified using the Sales Order Planning flag on the Warehouse Description File for manufacturing warehouses.  (Note that sales orders sourced from distribution warehouses are never included in the demand calculations.)
• MAC-PAC automatically deducts inventory reserved for customer orders from the total available for planning if any balance types are available for both planning and distribution and the Sales Order Planning flag is No. 

Also note that if you define one balance type where both flags are Y, you cannot also define a balance type where the Distribution flag is Y but the Order Planning flag is N.  Either all distribution inventory is available for planning, or none of it is.