Example of future order processing

This example shows how one company processes future orders.

The company has these characteristics:

  • Performs online allocation
  • Picks and ships on the same day
  • Prioritizes expected ship date for backorder and future order allocation

This scenario occurs:

  1. A customer calls and places an order. For one line, item XYZ, the customer wants a future delivery date, which is April 18, 2018.
  2. This table shows the decisions that are created for the order:
    Decision Action
    Is the order far enough in advance to postpone the allocation?
    Note: You must decide whether to reserve inventory or to allow the item to be available for more current shipments.
    		 The order line is flagged as a future order.
    Determine how many days, on average, to ship an order to this customer. It takes four days to ship an order. April 14, 2018 is specified as the expected ship date for this order line.
  3. Batch Allocation is run and these actions are performed by the solution:
    • Current receipts of inventory are used to attempt allocation of backorders.
      Note:  1 is the default for the Future Days field.
    • If Future Days is specified on Batch Allocation , then the attempted allocation of future order lines is initiated.
      Note:  Average lead time days are specified on Item Location and determine the average number of days to receive an item from a vendor.
  4. Based on the Expected Ship Date, Future Days, and Average Days fields, this table shows the future order allocation:
    Calculation Date
    Customer future delivery date April 18, 2018
    Future order selection date based on Expected ship date April 14, 2018
    Subtract the item XYZ's lead time days based on average lead time days 10 days (in this example) = April 4, 2018
    Subtract the future days. Future days are based on the Future days field on the allocation parameters page. 1 day = April 3, 2018
    Note:  The item is not printed on the pick list until April 14, 2018. This date is based on the expected ship date, regardless of when the item is allocated.

    Based on the previous calculation, if sufficient stock exists for item XYZ, then allocation occurs on April 3, 2018. If sufficient stock does not exist, then a backorder and a purchase order is created. With 10 days lead time, the goods are received and Batch Allocation allocates the goods on April 14, 2018. The item prints on the pick list on April 14, 2018 and the item is shipped on the same day. The customer receives the item on April 18, 2018.