Example of future order processing

This example shows how one company handles future order processing. The company has these characteristics:

  • Performs online allocation

  • Pick and ship on same day

  • Prioritize expected ship date for backorder and future order allocation (determined on BL00.1)

These scenario occurs:

  1. A customer calls and places an order. For one line, item XYZ, the customer wants a future delivery date (April 15, 2001).
  2. You make these decisions on the order:
    Decision Action
    Is the order far enough in advance to postpone allocation? You want to decide to reserve inventory or allow the item to be available for more current shipments. Flag the order line as a future order.
    Determine how many days, on average, it takes to ship an order to this customer. If, for example, it takes four days to ship an order, specify 04/11/01 as the expected ship date for this order line.
  3. When you run Batch Allocation (WH110), these actions are performed by the application:

    • Current receipts of inventory are used to attempt allocation of backorders

      Note: Future Days default as 1.

    • If you specify Future Days on Batch Allocation (WH110), then you will initiate the attempted allocation of future order lines.

      Note: Average leadtime days are specified on Item Location (IC12), and determine the average number of days it takes to receive an item from a vendor.
  4. Based on the Expected Ship Date, Future Days, and Average Leadtime Days fields, the future order allocation is:
    Calculation Date
    Customer future deliver date April 15, 2001
    Future order selection date (based on Expected ship date) April 11, 2001
    Minus item XYZ's leadtime days (based on Average leadtime days) 10 days (in this example) = April 1, 2001
    Minus future days (based on Future days field on allocation parameters) 1 day = March 31, 2001
    Note: The item will not print on the pick list until April 11, 2001. This is based on the expected ship date, no matter when the item is allocated.
  5. Based on the above calculation, if sufficient stock exists for item XYZ, then the allocation will occur on March 31, 2001. If sufficient stock does not exist, a backorder, then a purchase order, is created. With 10 days leadtime, you receive the goods and Batch Allocation (WH110) allocates the goods on April 11, 2001.
  6. The item prints on the pick list on April 11, 2001, and the item is shipped the same day. In four days, the customer receives the item on April 15, 2001.