Applying Reservation and Backorder Rules
This topic discusses:
Reservation and backorder rules are applied differently to soft-reserve, non-soft-reserve, ATP, and lot-allocated items. There are also special considerations for product kits and demand lines that have been pegged.
Soft Reserve Items
Reservation and backorder rules are applied to soft-reserve items. The demand line must pass the rule criteria to be set to the releasable state.
Non-Soft Reserve, Non-ATP Items
For non-soft-reserve items that are not ATP items, the setting in the Non-Reserved State field on the Setup Fulfillment page determines how the reservation and backorder rules are applied.
If the field is set to Unfulfilled, then the reservation and backorder rules are applied.
However, since no quantity is soft-reserved, the quantity and percentage checks of the reservation rules are not applied. The date checks on the line-level reservation rule and any order-level reservation rules are applied and the demand line must pass the criteria to be set to the releasable state.
If the field is set to Releasable, then the reservation and backorder-release rules are not applied.
The demand line has already moved past the unfulfilled state; however, the backorder-shipping rules are applied.
ATP Items
Reservation and backorder rules are applied to ATP items. The demand line must pass the criteria to be set to the releasable state. However, the promised quantity of the demand line is used instead of the reserved quantity (since an ATP item is not soft-reserved) to compare to the quantity and percentage checks of the rules.
If the ATP item is within the ATP lead days but outside the reservation lead days, then the system promises the quantity only if all of the requested quantity is available. If the item is within the reservation lead days, then the system can promise partial quantities, but a backorder decision is not made until the demand line passes any line-level and order-level reservation rules. Each time the Reserve Materials process or online processes are run for the demand line, the system will again check to see if it can promise the unpromised portion of the demand line but the system does not reevaluate the whole requested quantity.
Lot-Allocated Items
Reservation and backorder rules do not apply to lot-allocated items. Partial lot allocations result in splitting the demand line; lot-allocating one demand line and no allocated quantity on the second demand line. Both demand lines are left in the unfulfilled state.
Product Kits
For product kits on sales orders from PeopleSoft Order Management, the reservation and backorder rules are determined based on Order Management's backorder/shortage engine. The rules are defaulted to the product kit and then default to the individual components that are sent to PeopleSoft Inventory for order fulfillment. Product kits can also be adding directly to a material stock request in PeopleSoft Inventory. For both sales orders and material stock requests, during order fulfillment:
If the Release Multiple Kits check box on the Setup Fulfillment page (inventory business unit level) is not selected, then the system applies the reservation and backorder rules to each individual component.
If the Release Multiple Kits check box on the Setup Fulfillment page (inventory business unit level) is selected, then only multiples of complete kits are set to the releasable state.
For example; suppose that product kit X consists of 2 units of item A and 1 unit of item B. The demand line requests a quantity of 10 product kit X. Available stock includes 22 units of item A and 4 units of item B. The system can reserve 20 units of item A and 4 units of item B, then 8 units of item A and 4 units of item B (4 complete kits) are set to releasable status and passed downstream for picking. For any quantities initially reserved, promised, or lot-allocated but could not be set to releasable, in this case, 12 units of item A, the system follows the reservation rules to determine if a notification should be sent and/or the items be unreserved, unpromised, or unallocated, but does not allow the lines to be set to releasable.
Before reserving product kit components, you may want to run the Kit Re-Explode process. This process gives you to ability to synchronize the product kits on a sales order or material stock request with the latest product kit definition on the Product Kit Summary page. Changes to the kit definition are applied to the order by adding, modifying, or deleting demand lines containing kit components.
For material stock requests, the reservation and backorder rules can be manually entered on the demand line or default to the demand line from the Setup Item Fulfillment-Reservation / Backorder Rules page (the item/business unit level) or the Setup Fulfillment-Reservation page (business unit level).
If there are no reservation and backorder rules established for the demand line, then the system uses the Partial Qtys Can Ship, Cancel Backorder, and Partial Orders Can Ship check boxes located on the Setup Item Fulfillment page or the Setup Fulfillment page to determine releases and backorders. Demand lines with no reservation rules refer to the Partial Qtys Can Ship check box. Demand lines with no backorder rules refer to the Cancel Backorder check box.
Field or Control |
Description |
|---|---|
Partial Qtys Can Ship |
Select this check box to enable the system to reserve part of the requested quantity for a demand line and set to releasable state when it is within the reservation lead days. The system splits the demand line, releases the reserved quantity, and backorders the shortage. If this check box is not selected, then the system does not set the demand line to releasable state unless the entire requested quantity can be reserved. If the demand line is within the reservation lead days and the entire requested quantity cannot be reserved, then the entire demand line is backordered. Note: This check box has uses beyond reservations; it is also checked at picking and shipping time. |
Cancel Backorder |
Select this check box to cancel any backorder created by the Reserve Materials process or the online reservations processes. |
The Partial Quantities Can Ship and Cancel Backorder check boxes work together to determine the reservation and backorder decisions. The following actions are taken depending on the settings:
If the Cancel Backorder check box is not selected and the Partial Quantities Can Ship check box is selected, then partial quantities are reserved and a backorder created for the shortage.
If the Cancel Backorder check box is not selected and the Partial Quantities Can Ship check box is not selected, then either the full requested quantity is reserved and released or no quantity reserved and released. A backorder is created for the full quantity if no quantity is reserved
If the Cancel Backorder check box is selected and the Partial Quantities Can Ship check box is selected, then a partial quantity is reserved and the backorder is canceled for the shortage.
If the Cancel Backorder check box is selected and the Partial Quantities Can Ship check box is not selected, then full quantity is canceled if it is not available to be reserved.
At shipping time, if the Partial Orders check box on the Setup Fulfillment page is not selected, then the shipping processes do not allow any of the lines on the order or unit of work to be shipped unless all of the lines within the order or unit of work can be shipped.