Future orders

This example shows how one company handles future order processing. These are the characteristics of the company:

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

This scenario occurs:

  • A customer calls and places an order. For one line, item XYZ, the customer requests a future delivery date of April 28, 2017.
  • You create these decisions about the order:
    Decision Action
    Can the order be advanced to postpone allocation? You must decide whether to reserve inventory or to allow the item to be available for more current shipments. Flag the order line as a future order.
    Determine the average number of days to ship an order to this customer. If it takes four days to ship an order, then specify 04/24/17 as the expected ship date for this order line.
  • When you run Batch Allocation, these actions are performed:
    • Current receipts of inventory are used to attempt allocation of backorders. 1 is the default in the Future Days field.
    • If you specify Future Days on Batch Allocation, then you initiate the attempted allocation of future order lines. Average lead time days are specified on Item Location and determine the average number of days to receive an item from a vendor.
  • Based on the Expected Ship Date, Future Days, and Leadtime Days fields, this table shows the future order allocation:
    Calculation Date
    Customer future deliver date April 28, 2017
    Future order selection date based on Expected ship date April 24, 2017
    Minus item XYZ's leadtime days based on Average leadtime days 10 days in this example = April 14, 2017
    Minus future days based on Future days field on allocation parameters 1 day = April 13, 2017
    Note:  The item is not printed on the pick list until April 24, 2017. This action is based on the expected ship date, regardless of when the item is allocated.

    Based on the previous calculation, if there is sufficient stock for item XYZ, then allocation occur on April 13, 2017. If there is insufficient stock, a backorder and then a purchase order is created. With 10 days leadtime, you receive the goods and the goods are allocated by Batch Allocation on April 24, 2017. The item is printed on the pick list on April 24, 2017, and the item is shipped the same day. The customer should receive the item on April 28, 2017.