To compute cumulative ATP

In the Item Master Plan (cprmp2101m000) session, there are several fields that give an indication of the item quantity that is still available at a certain point in time:

The projected inventory shows the inventory level as it is expected on the basis of the previous inventory, the expected demand, and the planned supply (see also To compute the projected inventory).

The available to promise (ATP) is an indicator of inventory availability that is specifically geared to the process of order acceptance. In the Item Master Plan (cprmp2101m000) session, the ATP is shown in two formats:

  • The ATP for one plan period
  • The cumulative ATP
To compute the cumulative ATP

A plan period's cumulative ATP indicates the item quantity that you can still promise to deliver to a customer in that plan period.

The cumulative ATP differs from the ATP in several respects:

  • The cumulative ATP also takes the (cumulative) ATP of the previous period into account.
  • The cumulative ATP can become negative.
  • The cumulative ATP is corrected for supply deficiencies in the future (that is, plan periods in which the actual demand exceeds the planned supply).

To a certain extent, the computation of the cumulative ATP is similar to the computation of the projected inventory. However, some key differences exist:

  • The computation of cumulative ATP considers actual demand only, whereas the computation of projected inventory uses nonconsumed demand forecast as well.
  • The cumulative ATP is corrected for future drops (in periods in which the actual demand is higher than the planned supply), whereas the projected inventory is not.

The computation of cumulative ATP can be described as a two-step procedure:

  1. Compute an (uncorrected) cumulative ATP value.
  2. Correct the cumulative ATP for future quantity deficiencies.

In the first step, an (uncorrected) cumulative ATP is computed for the current plan period and each subsequent period within the CTP horizon, as follows:

Cumulative ATP of previous period + total planned supply - total actual demand
Note

For the current plan period, no previous cumulative ATP exists. Instead, the inventory on hand is used.

In the second step, the cumulative ATP computed for the various plan periods is corrected for future deficiencies (periods with actual demand that exceeds planned supply). This is done as follows: for each plan period, the cumulative ATP is made equal to the lowest (uncorrected) cumulative ATP value that occurs in the future.

This correction enhances the effectiveness of the cumulative ATP as an order promising tool, because it makes the cumulative ATP sensitive to future deficiencies.

The result of the correction is that the cumulative ATP does not drop over time; it either rises or remains constant.

Example

This example assumes that no component CTP reservations need to be made.

Current plan period = 3

Inventory on hand = 10

Plan period345678910
(Planned supply - actual demand)10300-600400-10
ATP20300004000
Cumulative ATP (uncorrected)205050-10-10303020
Cumulative ATP (corrected)-10-10-10-10-10202020

 

In this case, the value in period 10 is copied back to periods 9 and 8, so part of the surplus supply in period 8 is reserved to make up for the deficiency in period 10.

Moreover, the negative value in period 6 is copied back to all previous periods. This serves to indicate that the available surplus supply in these periods must not be promised to customers, but must instead be reserved to make up for (part of) the deficiency in period 6.

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