Inventory and Availability
What to know
Inventory in Order Management revolves around Location, Location Group, Product Inventory, and availability calculations. Understand the difference between on-hand quantity, reserved/allocated quantity, and available-to-promise (ATP). Availability is typically computed as on-hand minus reservations (and minus safety stock or other configured deductions).
Know that inventory is tracked per location (and often per location group), and that routing uses availability to decide fulfillment. Understand the roles of reservation (holding stock for an order) and allocation (assigning stock to a fulfillment order line). Also know how inventory data typically arrives - via integration from an external system of record - and that Order Management may not be the master of inventory.
Traps
- Confusing on-hand with available. On-hand can be positive while available is zero due to reservations.
- Assuming Order Management is always the inventory system of record - often it is not; inventory is synced in.
- Forgetting safety stock deductions when computing availability.
- Mixing up reservation vs allocation timing.
Rule of thumb
Available = On-hand − Reserved − Safety stock (plus any configured adjustments). If asked whether an order can be fulfilled from a location, check available, not on-hand.
Worked example
Location A has 100 on-hand, 30 reserved, and safety stock of 10. Available = 100 − 30 − 10 = 60. A new order for 70 units cannot be fully sourced from Location A alone; routing would split or use another location.