About allocating inventory items

You can select whether or not to include backorders, items on order, items intransit, work in process, or hold quantities when allocating inventory. There are two formulas you set up when you defined your Inventory Control company: available to allocate and available to sell.

The basic formula is as follows:

Stock-on-hand - Allocated inventory - In process = Available quantities

You can also choose to add or subtract these quantities:

Backordered quantities
On order (for example: open purchase orders)
Intransit
Work in process
Hold quantity

Available to allocate

You define the formula for inventory that is available to allocate when you set up your Inventory Control company.

Available to sell

The available to sell quantity is used with customers who do not allow backorders. Generally, if sufficient stock does not exist, then you cannot add an order line for a client who does not accept backorders. However, by using the available to sell formula, you can alter the available stock-on-hand quantity. For example, you can choose to add in the on-order quantities from open purchase orders to the stock-on-hand quantity. That way, if insufficient stock exists, but you have an order arriving from a vendor for that item, you can add the order line for a customer who does not accept backorders.