Negative inventory

Allowing negative inventory enables you to deliver goods for an order if the goods are physically available but have not yet been registered in LN. This occurs if the physical flow of goods is faster than the electronical flow.

Example

You enter a sales order for 10 pcs. The current inventory is 0, but you have an open purchase order for 10 pcs. Actually, the goods have already arrived at the warehouse, but are not yet registered.

LN can register negative inventory in the Item - Warehouse - Negative Inventory (whwmd2555m000) session. Negative inventory is intended to be only temporary.

LN only creates negative inventory if all of the following applies:

  • The Negative Inventory Allowed check box in the Inventory Handling Parameters (whinh0100m000) session is selected.
  • The item's location allocated inventory in the warehouse or location exceeds the item's inventory on hand.
  • Inventory on order exists for the item, warehouse, location and/or lot combination. By default, negative inventory cannot be more than the inventory on order. If, however, in the Item - Warehousing (whwmd4100s000) session, Allow Negative Inventory without On Order * is selected, this constraint does not apply. As a result, confirmation of the picking list line will not be blocked.
  • You manually create outbound advice in the Outbound Advice (whinh4525m000) session.
  • To create negative inventory using the Process Outbound Advice (whinh4200m000) session or the Generate Outbound Advice (whinh4201m000) session, Create Outbound Advice Despite Inventory Shortage * must be selected.
*This option is only available if, in the Inventory Handling Parameters (whinh0100m000) session, the Advanced Negative Inventory check box is selected.

 

Note
  • Negative inventory is not fully possible for lots. You can only use lots in inventory if the lot to be used already exists and is referenced on the outbound order line.
  • Because an item's inventory valuation method cannot be known before the receipt of the item, all negative inventory transactions are valued against Fixed Transfer Price (FTP).
  • If the inventory on order is (partly) received in the warehouse (when the receipt is confirmed in the Warehouse Receipt (whinh3512m000) session), LN subtracts the received quantity from the negative inventory quantity. If the received quantity is equal to or more than the negative inventory quantity, LN deletes the negative inventory record.
Backflushing

In case of backflushing, LN can also generate negative inventory records. LN generates negative inventory for an outbound order line for which backflushing applies if, in addition to the above mentioned conditions, all of the following applies:

  • The item is delivered but the receipt is not yet registered.
  • The item is picked from the warehouse based on a backflush order.
  • The orders or operations are reported completed in Shop Floor Control.

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