Inventory availability safety factor

Promising inventory by delivery method

Safety factor can be defined for a delivery method associated with an item, classification attribute values of an item, supply type, node type, or item node definition. Sterling Order Management System uses the following logic to calculate availability:

Supply - demand - (safety factor for delivery method) = availability

If safety factor is not defined for an item's delivery method and inventory is requested for
the delivery method, the safety factor for the item, classification attribute 
value of the item, supply type, node type, or item node definition is used.
If safety factors are defined for multiple delivery methods for an item and inventory 
is requested for multiple delivery methods, the maximum 
safety factor defined for a delivery method is used.  

For example, if onhand safety factor is defined for an item and also the item's shipping delivery method but not the item's pickup delivery method, on requesting inventory for the shipping delivery method, the item that is associated with the shipping delivery method is considered for calculating the inventory availability. However, on requesting inventory for the pickup delivery method, the onhand safety factor for the item is considered.

In the example, if safety factors are defined for both the shipping and pickup delivery methods for an item, where the safety factor for the shipping delivery method is 5 and the safety factor for the pickup delivery is 10, on requesting inventory for both delivery methods, the pickup delivery method is considered for calculating inventory availability as it contains the maximum safety factor.

Promising onhand inventory

In a store availability scenario where availability is shared between online consumers and in-store customers, the actual availability of a product at any time might not be accurate, due to misplaced items, items in shopping carts, or reserved items. This scenario might lead to over-promising to online consumers.

Using the inventory availability safety factor, stores can define the quantity or percentage of inventory to be excluded from the inventory availability that is visible to online consumers.

Promising future inventory

Future inventory is supply that is expected to arrive at a supplier but is not yet on hand. Future inventory that is generated by a purchase order can be used by an enterprise to promise against new and existing orders. However, in some cases, not all future inventory can be considered to be reliable. For example, if an enterprise places a purchase order to one of its suppliers, it's possible that the order might become backordered. Therefore, the enterprise might want to consider only 40% of the future supply created by the purchase order for order promising. If the supply is shipped and is in transit, the enterprise can be more confident that the supply is received in a timely manner. Therefore, the enterprise can safely promise up to 95% of the in transit supply.

Sterling Order Management System provides for this flexibility. Each enterprise can define the percentage of each supply type that can be used to promise demand.

Unplanned inventory

The unplanned inventory is the inventory that is assumed to be available based on the lead time of an item. For example, if an order inquiry exists for 10 quantities of item1 with the lead time of 10 days, and only seven quantities of item1 are in onhand inventory. When unplanned inventory is considered, the order can be scheduled against the following inventory:

Onhand Inventory = Available on current date for seven quantities

Unplanned Inventory = Available on current date + 10 days (lead time) for three quantities