Netting inventory commitments
The following example describes demand netting of inventory commitments.
Example 3 : Inventory commitments netted against demand orders
Similar to Example 2, after you receive the second purchase order, but now with three pieces on hand available and a received quantity of nine pieces.
An inventory commitment can exist for one specifc demand. For example, an inventory commitment exists for sales order S3 of two pieces. The actual shortage for this sales order is not 10 in this case, but eight. The shortage for S3, however, still appears as 10.
The on-hand quantity is the quantity on hand that is available. This includes the inventory commitment for demand as displayed in the session. The inventory commitments for demand that does not appear in the session is not included in this on-hand quantity.
You must respect the inventory commitment per demand line. As a result, the following applies:
- The quantity assignments made for a demand line in the DMS session must at least meet the committed inventory for the demand line.
- The sum of assigned received quantity and assigned on-hand quantity must at least be equal to the committed quantity.
The received quantity is within the force cross-docking range, therefore, first the received quantity is assigned, and then the on-hand quantity.
| Item | X |
| Warehouse | WH1 |
| Received Quantity in Inventory Unit | 9 pcs. |
| Inventory on Hand | 3 pcs. |
Distribution in the DMS session is as follows:
| Priority | Date | Demand | WH | Shortage | Assigned Received Quantity | Assigned Inventory | Cross-dock Order |
|---|---|---|---|---|---|---|---|
| 106 | 14-4-2005 | Sales S4 | 2 | 2 | 2 | CD4: 7 pcs. - Planned | |
| 203 | 11-4-2005 | Sales S1 | 1 | 10 | 7 | 1 | |
| 205 | 13-4-2005 | Sales S3 | 2 | 5 | 2 | ||
| 212 | 15-4-2005 | Transfer T2 | 1 | 5 | |||
| 500 | 20-4-2005 | Forecast F1 | 2 | 20 |
Despite the fact that 12 pieces must be divided, you cannot fulfill demand S1 of 10 pieces, because of an inventory commitment for demand S3.
The available received quantity to be assigned per demand line is calculated as:
received qty - assigned received qtyThe available on-hand quantity to be assigned per demand line is calculated as:
on hand - (committed to other demand + commitment to other demand covered by assignments) - on hand assigned to other demandCalculation of the assigned quantities is as follows:
| Demand | Shortage | Available received calculation | Available received | Available on hand calculation | Available on hand | Assigned received | Assigned on hand |
|---|---|---|---|---|---|---|---|
| S4 | 2 | 9 - 0 | 9 | 2 | |||
| S1 | 10 | 9 - 2 | 7 | 3 - (2 + 10) - 0 | 1 | 7 | 1 |
| S3 | 5 | 9 - 9 | 0 | 3 - (0 + 0) - 1 | 2 | 2 | |
| T2 | 5 | ||||||
| F1 | 20 | __ | __ |
The received quantity is outside the force cross-docking range, therefore, first the on-hand quantity is assigned, and then the received quantity.
Distribution in the DMS session is as follows:
| Priority | Date | Demand | WH | Shortage | Assigned Received Quantity | Assigned Inventory | Cross-dock Order |
|---|---|---|---|---|---|---|---|
| 106 | 14-4-2005 | Sales S4 | 2 | 2 | 1 | 1 | CD4: 7 pcs. - Open |
| 203 | 11-4-2005 | Sales S1 | 1 | 10 | 8 | 0 | |
| 205 | 13-4-2005 | Sales S3 | 2 | 5 | 2 | ||
| 212 | 15-4-2005 | Transfer T2 | 1 | 5 | |||
| 500 | 20-4-2005 | Forecast F1 | 2 | 20 |
Calculation of the assigned quantities is as follows:
| Demand | Shortage | Available received calculation | Available received | Available on hand calculation | Available on hand | Assigned received | Assigned on hand |
|---|---|---|---|---|---|---|---|
| S4 | 2 | 9 - 0 | 9 | 3 - (2 + 0) - 0 | 1 | 1 | 1 |
| S1 | 10 | 9 - 1 | 8 | 3 - (2 + 0) - 0 | 0 | 8 | 0 |
| S3 | 5 | 9 - 1 - 8 | 0 | 3 - (0 + 0) - 1 | 2 | 2 | |
| T2 | 5 | 3 - (0 + 0) - 1 - 2 | 0 | ||||
| F1 | 20 | __ | __ |