The reservation of inventory against a demand prior to the outbound process.

You can allocate a quantity of inventory to a business partner or a particular demand order.

Inventory that is allocated to a specification. This inventory is not allocated to a specific order, but can be consumed by any order line with a specification whose characteristics match the characteristics of the specification of the allocation buffer.

A commission to change the allocation of inventory.

An order, usually a sales order or sales schedule, fulfilling the demand of a customer.

A demand related to a demand for another item.

Two basic types of dependent demand exist:

• Demand for components that are used to manufacture an item.
• Demand that originates from another warehouse location or a related company.

With master planning, the dependent demand is equal to the sum of the following fields:

• dependent material demand
• dependent scheduled demand
• dependent distribution demand

LN explodes the ATP and the dependent demand of a main item to plan items that have the same planning cluster as the warehouse you specified on the bill of critical materials of the main item.

The computer-to-computer transmission of a standard business document in a standard format. Internal EDI refers to the transmission of data between companies on the same internal company network (also referred to as multicompany). External EDI refers to the transmission of data between your company and external business partners.

A uniquely identifiable physical unit that consists of packaging and contents. A handling unit can contain items. A handling unit has a structure of packaging materials used to pack items, or is a part of such a structure.

A handling unit includes the following attributes:

• Identification code
• Packaging item (optional)
• Quantity of packaging items (optional)

If you link an item to a handling unit, the item is packed by means of the handling unit. The packaging item refers to the type of container or other packing material of which the handling unit consists. For example, by defining a packaging item such as Wooden Crate for a handling unit, you specify that the handling unit is a wooden crate.

A demand that is unrelated to demand for other items.

Examples of independent demand:

• Demand for finished goods.
• Demand for components required for destructive testing.
• Service part requirements.

A planning concept in which planning data is handled in the form of orders.

In order planning, supply is planned in the form of planned orders. LN takes into account the start and finish dates of individual planned orders. For production planning, this method considers all material and capacity requirements, as recorded in an item's BOM and routing.

A demand-pull system that regulates the supply of items to shop floor warehouses.

In this supply system, a specific production order for a specific product pulls the required items from a supply warehouse to the shop floor warehouse. A direct link is established between the production order for which the items are required, and the warehousing order that regulates the supply of the required items to the shop floor warehouse.

The expected changes in the inventory levels due to planned orders for items.

A supply order in Enterprise Planning that is created for planning purposes, but which is not an actual order yet.

Enterprise Planning works with planned orders of the following types:

• planned production order
• planned purchase order
• planned distribution order

Planned orders are generated in the context of a particular scenario. The planned orders of the actual scenario can be transferred to the execution level, where they become actual supply orders.

A list of time-phased requirements, generated by a central planning system, such as Enterprise Planning or Project, that are sent to the supplier. Push schedules contain both a forecast for the longer term and actual orders for the short term.

A push schedule can use one of the following release types:

• Material Release: only material releases are sent. Shipping is performed based on the Firm and Immediate requirements in the material release.
• Shipping Schedule: both material releases and shipping schedules are sent. Shipping is carried out based on the Firm and Immediate requirements in the shipping schedule. The material release only sends forecasting data.
• Shipping Schedule Only: only shipping schedules are sent. Shipping is carried out based on the Firm and Immediate requirements in the shipping schedule. No forecasting data is sent to the supplier.

A purchase or sales order on which returned shipments are reported. A return order can only contain negative amounts.

A collection of item-related data, for example, the business partner to whom the item is allocated or ownership details.

LN uses the specification to match supply and demand.

A specification can belong to one or more of the following:

• An anticipated supply of a quantity of an item, such as a sales order or production order
• A particular quantity of an item stored in a handling unit
• A requirement for a particular quantity of an item, for example a sales order

An intermediary product in a production process that is not stored or sold as an end product, but that is passed on to the next operation.

For subcontracting purposes, a manufacturer can send a subassembly to a subcontractor to carry out work on the subassembly. This subassembly has its own item code defined in the Item Base Data.

After work is finished, the subcontractor sends the subassembly back to the manufacturer. Also this reworked subassembly has its own item code defined in the Item Base Data.

Allowing another company (the subcontractor) to carry out work on an item. This work can concern the entire production process, or only one or more operations in the production process.

An order, usually a production order or a purchase order, that contains a quantity of a particular item needed to fulfill a demand order.

An agreement between business partners about the sale, purchase, or transfer of goods, in which you can define detailed terms and conditions about orders, schedules, planning, logistics, invoicing, and demand pegging, and define the search mechanism to retrieve the correct terms and conditions.

The agreement includes the following:

• A header with the type of agreement and the business partner(s).
• Search levels with a search priority and a selection of search attributes (fields) and linked terms and conditions groups.
• One or more lines with the values for the search levels’ search attributes.
• Terms and conditions groups with detailed terms and conditions about orders, schedules, planning, logistics, invoicing, and demand pegging for the lines.

An inventory management method according to which the supplier usually manages the inventory of his customer or subcontractor. Sometimes, the supplier manages the supply planning as well. Alternatively, the customer manages the inventory but the supplier is responsible for supply planning. Inventory management or inventory planning can also be subcontracted to a logistics service provider (LSP).

The supplier or the customer may own the inventory delivered by the supplier. Often, the ownership of the inventory changes from the supplier to the customer when the customer consumes the inventory, but other ownership transfer moments occur, which are laid down by contract.

Vendor-managed inventory reduces internal costs associated with planning and procuring materials and enables the vendor to better manage his inventory through higher visibility to the supply chain.