Credit Hold and Partial Fulfillment on a Configured Order
A customer places a single order for 1,200 units of a configured product with a requested ship date of the 15th. Available on-hand is 700 units in the main warehouse; 300 units are in transit to a second warehouse and will arrive on the 12th; the remaining 200 units would require a drop-ship purchase order with a 10-day supplier lead time. The customer's credit limit is $150,000 and current exposure is $148,500; the order value is $96,000. The order is on credit check hold. The orchestration process is configured to split lines by availability and to create a back-to-back drop-ship PO only if the customer accepts a partial shipment. The customer has not yet responded to the partial shipment request. A service level agreement requires 95% on-time shipment.
1. Why is the order on credit hold, and can any part of it ship before the hold is resolved?
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The order pushes credit exposure from $148,500 to $244,500 ($148,500 + $96,000), which exceeds the $150,000 limit by $94,500. The hold is therefore a hard credit control, not an inventory issue. No shipment should be released while the order is fully on credit hold unless the credit team approves a partial release or the order is reduced.
There are three practical paths:
- Credit approval: the credit team reviews the customer's payment history and temporarily raises the limit or approves the specific order. This is the cleanest path if the customer is otherwise in good standing.
- Partial release: release only the 700 units that can ship now. The released value is 700/1,200 of $96,000, or $56,000, which brings exposure to $204,500. That still exceeds the limit, so a partial release alone does not solve the credit problem unless the credit team approves the exposure.
- Order reduction or prepayment: reduce the order to fit the available credit, or obtain prepayment for the excess.
The key judgment is that inventory availability does not override credit. The 700 units can be physically ready, but the order remains blocked until credit acts.
2. How should the orchestration process handle the split across on-hand, in-transit, and drop-ship supply?
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The orchestration process should evaluate each supply source against the requested date and the configured split rules. The 700 on-hand units are available now. The 300 in-transit units arrive on the 12th, which is before the 15th ship date, so they are feasible if the transfer is received and put away in time. The 200 drop-ship units require a 10-day supplier lead time, which means the drop-ship PO must be placed by the 5th to support the 15th; that is likely not feasible if the order is still on hold.
The orchestration is also waiting on the customer's acceptance of a partial shipment. Until that response arrives, it should not create the drop-ship PO, because the configured rule makes drop-ship conditional on partial-shipment acceptance. The process can still release the 700-unit line if credit approves it, but the remaining 500 units should stay in a waiting or backorder status.
A defensible plan is: ship 700 now if credit releases them; receive the 300 on the 12th and ship them as a second partial; keep the 200 as a backorder pending customer acceptance and supplier confirmation. The orchestration should not silently split the order in a way that changes the customer's commitment without consent.
3. What actions would you take to meet the 95% on-time shipment target without violating credit or inventory controls?
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The target is at risk because credit is blocked and the drop-ship lead time is tight. The planner should work the exceptions in parallel rather than waiting for the customer.
- Credit: escalate to the credit team with the customer's payment history and the fact that 700 units are ready. Ask for a time-bound release for the 700 units or a limit increase covering the order. Document the decision.
- Customer consent: contact the customer for an immediate response on the partial shipment. If the customer accepts 700 now and 500 later, the orchestration can proceed with the split; if not, the order may need to be re-promised.
- Transfer: confirm that the 300 in-transit units will be received and put away by the 12th. If the transfer is late, the second shipment slips and the 95% target is unlikely.
- Drop-ship: if the customer accepts the split, place the drop-ship PO immediately for the 200 units. A 10-day lead time from the 5th is the latest feasible start; any delay pushes the final shipment past the 15th.
If credit cannot be resolved, the honest answer is that the order cannot meet the target. The planner should re-promise rather than ship on hold or create unapproved supply.