Calculating Available-To-Promise Quantity
The ATP function calculates the projected quantity available for an item in a business unit on a given date, enabling you to promise orders against future supply. Use the Setup Fulfillment-ATP Reservations page to select optional sources of demand and supply. The following sections describe the variables used in the ATP calculation, the calculation itself, and the processes and components that call the ATP function.
To project expected supply for an item in a business unit, the ATP function considers purchase orders, scheduled production in the firmed status, and interunit transfers that should be received between the current date and the scheduled ship date. You can specify additional sources of supply on the Setup Fulfillment-ATP Reservations page, including; scheduled production in the entered status, purchasing requisitions, manufacturing co-products or by-products, planned purchase orders, planned transfer orders, and planned production orders from PeopleSoft Supply Planning.
Purchase Orders
Open, pending, approved, and dispatched purchase orders to be put away in the inventory business unit are included as standard sources of supply in the ATP calculation. The due date on the purchase order schedule line is used as the date when the items are available. Subcontract purchase orders for production IDs are excluded; this supply is captured as part of scheduled production.
Any quantity already received for a schedule line on a purchase order is subtracted from the original requested quantity. Quantity received but not put away is counted as supply with an availability date equal to the current date. Similarly, receipts without purchase orders that have not completed the putaway process are treated as supply with an availability date equal to the current date.
Scheduled Production
Firmed, released, and in-process scheduled production orders are included as standard sources of supply in the ATP calculation. To be counted as supply, an item must be the primary output for the production order or a component on a tear down order. The production order's due date is used as the item availability date unless the item is produced during an earlier operation sequence; in that case, the operation's due date is used as the item availability date.
Quantity yet to be completed is calculated based on the expected output of the production run minus the already completed output quantity for the run. Completed output quantity that has not been putaway is counted as supply with an availability date equal to the current date.
In addition, you can select to include production orders in the Entered status in the supply side of the ATP calculation by selecting the option on the Setup Fulfillment-ATP Reservations page.
Interunit Transfers
Stock transfers to be received from other business units are included as a standard source of supply in the ATP calculation. The scheduled arrival date for the interunit transfer is used as the item availability date. Quantity received but not put away is counted as a supply with an availability date equal to the current date.
Requisitions
Approved requisitions can be included as an optional source of supply in the ATP calculation. Only approved requisitions that specify an Inventory business unit and a due date are counted. The due date on the requisition is used as the item availability date. Any quantity on a requisition that has been sourced to a purchase order or interunit transfer is subtracted from the requisition quantity.
Co-Products and By-Products
Both co-products and by-products can be included as optional sources of supply in the ATP calculation. To be counted as supply, the item must be listed as co-product or by-product on the production order. Waste by-products are not counted as supply. The production order's due date is used as the item availability date unless the item is produced during an earlier operation sequence; in that case, the operation's due date is used as the item availability date.
Co- or by-product quantities yet to be completed are calculated based on the expected output of the production run minus the already completed output quantity for the run. Completed output quantities of co- or by-products that have not been put away are counted as supply with an availability date equal to the current date.
Planned Supply
Planned purchase orders, planned interunit transfer orders, and planned production orders from PeopleSoft Supply Planning can be used as sources of supply. When selecting these options on the Setup Fulfillment-ATP Reservations page, you will define which planned POs, planned transfers, and planned production should be included based on whether or not the order is approved, the status of the order (planned, firm planned, or both), and if the order is frozen or not.
To project expected demand for an item in a business unit, the ATP function considers sales orders and material stock requests that have previously been promised. You can specify additional sources of demand on the Setup Fulfillment-ATP Reservations page, including; dependent demand for an item, work orders from PeopleSoft Maintenance Management, planned interunit transfers and planned purchase orders from PeopleSoft Supply Planning.
Sales Orders
Sales orders that have been promised or lot allocated, but not confirmed as picked, are included as a standard source of demand in the ATP calculation.
Unpromised sales orders are not counted as demand. Sales orders that have been confirmed as picked are not counted as demand because the order quantity has already been subtracted from the item's available quantity.
Material Stock Requests
All material stock requests and interunit transfers (including those sourced from PeopleSoft Purchasing or created by PeopleSoft Supply Planning) that have been promised (or lot allocated) but not confirmed as picked are included as a standard source of demand.
Unpromised stock requests are not counted as demand. Stock requests that have been confirmed as picked are not counted as demand because the order quantity has already been subtracted from the item's available quantity.
Dependent Demand
Demand for an item that can be sold as part of an assembly can be included as an optional source of demand. Dependent demand is derived from bills of material for other items or end-products. The Dependent Demand check box on the Setup Fulfillment-ATP Reservations page only includes production orders with a status of firmed, released, or in process are eligible as sources of dependent demand.
Select the Include WIP in Starting Quantity check box on the Setup Fulfillment-ATP Reservations page if item quantities in WIP storage locations should be considered available to promise in the ATP calculation; that is, if item quantities in WIP storage locations is available to fulfill finished good demand. This check box applies to both Dependent Demand and Planned Production Demand.
For standard production orders, all components on the component list are counted as dependent demand. For rework and tear down orders, the production ID assembly item is not counted as demand, because assemblies to be torn down or reworked are assumed to be in non-nettable storage locations. Quantities in non-nettable storage locations are excluded from the item's available quantity; therefore, the production ID assembly item on the tear down or rework production order should not be counted as demand. All other components on the rework or tear down order; however, are included as sources of dependent demand.
The production order's start date is used as the component item's demand date unless the component item is required for some operation sequence; in this case, the operation's start date is used as the component item's demand date.
If the production order's status is firmed or released, the scheduled quantity for the component item is counted as the dependent demand quantity. If the production order is in process, the dependent demand quantity is calculated as follows:
For any in-process production, if the component's issue method is Kit, or if the component's issue method is Issue or Replenish and the component's quantity per is Per order, the demand quantity is equal to the largest of the following values: (1) pending issue quantity, plus pending yield loss quantity; (2) current schedule quantity, minus issue quantity minus the smaller of [a] yield loss quantity or [b] current schedule quantity x (1 − (component yield / 100)); (3) zero.
If the component issue method is Issue or Replenish, the component's quantity per is Per assembly, and no routing exists for the production ID, then the demand quantity is calculated using the following formula:
((order production quantity − order completed quantity − order scrapped quantity) x quantity per assembly x (100 / component yield)) + pending issue quantity + pending yield loss quantity
If the component issue method is Issue or Replenish, the component's quantity per is Per assembly, and a routing exists for the production ID, the demand quantity is calculated using the following formula:
((order production quantity − "quantity completed" − "quantity scrapped") x quantity per x (100 / component yield)) + pending issue quantity + pending yield loss quantity
If the component item is required for a particular operation sequence, the quantity completed in the above formula refers to the completed quantity at that operation, and quantity scrapped refers to the quantity that was scrapped at that operation, plus quantity scrapped in prior operations.
If the component item is not required for any particular operation sequence, the quantity completed and quantity scrapped in the above formula refer to the completed and scrapped quantity, respectively, at the first operation.
Note: Dependent demand is considered promised for all ATP calculations.
Planned Demand
Planned interunit transfer orders and planned production orders from PeopleSoft Supply Planning can be used as sources of demand. When selecting these options on the Setup Fulfillment-ATP Reservations page, you will define which planned transfers and planned production should be included based on whether or not the order is approved, the status of the order (planned, firm planned, or both), and if the order is frozen or not.
Work Order Demand
If PeopleSoft Maintenance Management is installed, work orders can be included in the demand side of the ATP calculation.
To determine when supplies of purchased or manufactured items could be available when no supply (or not enough supply) is expected for the item in the business unit, the ATP function calculates availability based on the item's lead time.
Purchased Items
If PeopleSoft Purchasing is installed, the standard lead time value on the Purchasing Attributes page defines the standard lead time required to purchase an item. For buy items for which no future supply (or not enough supply) is anticipated, the promise date is calculated as the current date, plus this lead time. If PeopleSoft Purchasing is not installed, the lead time for buy items is calculated using the Replenish Lead Days value defined on the Define Business Unit Item - Inventory: Replenishment page as the current date, plus the replenishment lead time.
Manufactured Items
Fixed lead time and variable lead time values on the Define Business Unit Item - Planning: Fences/Lead Time page define the lead time required to manufacture an item. For make items for which no future supply is anticipated, the promise date is calculated using the following formula: current date + fixed lead time + (order quantity in the standard UOM x variable lead time). The resulting date is rounded up to the next day.
You can call the ATP function to calculate the cumulative ATP quantity for a current or future date using the Item/Product Availability component. When you promise orders using online reservations or the Reserve Materials process from the Order Entry Form component in PeopleSoft Order Management or from PeopleSoft Inventory, the ATP function is called. No matter how the ATP function is called, the ATP quantity is calculated the same way. After gathering the supply and demand data, the ATP quantity is calculated for each schedule date starting at the furthest point in the future and working back to the current date. The cumulative ATP balance, a running total of the ATP for each schedule date, is calculated next, starting with the current date and working forward to the furthest point where supply or demand exists. The cumulative ATP available on a given date is the quantity that can be promised to orders scheduled for shipment on that date.
Warning! If concurrent Reserve Materials processes are running or if ATP is being checked online at the same time, over-promising can occur. For example, the Reserve Materials process runs for a particular order line for item A. ATP is checked and there is just enough quantity to promise to the order line. At the same time, another Reserve Materials process is running for a different order line but for the same item. ATP is checked and again there is just enough to promise. However, the two order lines together would result in a negative cumulative ATP balance. Because both order lines are not yet promised when the simultaneous Reserve Materials processes run, they are excluded from the ATP calculation that the two processes perform, resulting in over-promising. Use the Item/Product Availability Inquiry page, along with the Shortage Workbench, to monitor and correct situations of over-promising.
When orders are promised in batch, the ATP quantity is calculated for the schedule date on each order line for ATP-reserved items. If the schedule ship date of the order line falls within the ATP lead days, but outside of the reservation lead days defined for the item or business unit, the full order line quantity is promised if available or nothing is promised. However, if the order line falls within the reservation lead days, the cumulative ATP balance calculated for the schedule date is promised to the order line up to the full requested quantity and a backorder is created for any unpromised quantity (assuming backorders are allowed).
When you promise an order using online reservations, the ATP function also uses the schedule date to calculate the quantity that can be promised. However, if the full quantity cannot be promised on the schedule date, you can opt to change the request quantity, change the schedule date to the next date that the full quantity can be promised, or split the order line into multiple schedule lines with the maximum quantity that can be promised on those dates. In addition, if the order is a critical one and you must promise a certain schedule ship date and quantity regardless of whether there is enough cumulative ATP quantity on that date, you can do so by reserving the order line directly from the Order Entry Form component.
When you calculate the cumulative ATP online using the Item/Product Availability inquiry component, if a requested quantity was entered as a search criterion, the ATP function calculates the first available ship date for the quantity, if possible. The following sections describe the ATP calculations and demonstrate how the cumulative ATP quantity is calculated for a specific example.
Calculating ATP for Each Schedule Date
In PeopleSoft, ATP is calculated for each schedule date. In this context, schedule date refers to any date in the future that the business unit is scheduled to receive supply or fulfill demand for the item. ATP is calculated for each schedule date starting with the latest date where supply or demand exists. Depending on the specified demand options, one of two algorithms is used.
If dependent demand is not included in the ATP calculation, or if dependent demand is included and the Incl WIP in Starting Qty (include work-in-process in starting quantity) option is selected, the ATP quantity is calculated for each schedule date as follows, starting with the latest schedule date and working back to the current date. The ATP balance for a schedule date equals either the net supply or zero, whichever is larger.
Net Supply = Total Supply Qty for the schedule date − Total Demand Qty for the schedule date − Leftover Demand Qty from the next schedule date
where
Total Demand Qty = Finished Good Demand Qty + Dependent Demand Qty,
and where
Leftover Demand Qty = 0 if this is the latest schedule date, 0 if the Net Supply from the next schedule date is greater than or equal to 0; or the absolute value of the next schedule date's Net Supply, if the Net Supply is less than 0.
ATP for the schedule date representing the current date is calculated slightly differently:
ATP for the Current Date = Starting Qty Available + Total Supply Qty for this and any earlier schedule date − Total Demand Qty for this and any earlier schedule date − Leftover Demand Qty from the next schedule date.
Note: If the Incl WIP in Starting Qty option is selected, the starting quantity available is the current on-hand available quantity for the item (BU_ITEMS_INV.qty_available), plus the total quantity in WIP locations.
If dependent demand is included in the ATP calculation, but the Incl WIP in Starting Qty option is not selected, the ATP balance is calculated for each schedule date as follows, starting with the latest schedule date and working back to the current date. ATP for the schedule date is equal to the net supply or zero, whichever is larger.
Net Supply = Total Supply Qty for the schedule date − Total Finished Good Demand Qty for the schedule date − Non-WIP Dependent Demand for the schedule date − Leftover Demand Qty
where
Leftover Demand Qty = 0 if this is the latest schedule date, 0 if the net supply from the next schedule date was greater than or equal to 0; or the absolute value of the next schedule date's net supply, if the net supply was less than 0.
In the previous calculation, dependent demand is first netted against available WIP quantity. Once the available WIP quantity is exhausted, dependent demand is netted against non-WIP quantity. Non-WIP dependent demand in the previous calculation refers to any dependent demand quantity that could not be netted against available WIP quantity for that given schedule date. (The Item/Product Availability Inquiry page displays the WIP available quantity. Once this value reaches 0, any subsequent dependent demand is considered to be non-WIP dependent demand and affects the ATP calculation.)
ATP for the schedule date representing the current date is calculated slightly differently. In this case, the starting quantity available is the current on-hand available quantity for the item (BU_ITEMS_INV.qty_available):
ATP for the Current Date = Starting Qty Available + Total Supply Qty for this and any earlier schedule date − Total Finished Good Demand Qty for this and any earlier schedule date − Non-WIP Dependent Demand Qty for this and any earlier schedule date − Leftover Demand Qty from the next schedule date.
Calculating Cumulative ATP
Cumulative ATP is a running total of the ATP quantity calculated for each schedule date. After the ATP quantity is calculated for each schedule date, starting with the latest schedule date and working backward, the cumulative ATP balance can be calculated starting with the current date and working forward:
Cumulative ATP = Cumulative ATP for the prior date (or 0 if today's date) + the ATP for the schedule date.
Calculating Available Quantity for Each Schedule Date
The available quantity that appears on the Item/Product Availability Inquiry page is a running total of the available quantity calculated by adding supply or subtracting demand in chronological order. The available quantity calculated for the last schedule date should always match the cumulative ATP; however, available quantity and cumulative ATP values may differ for intermediate schedule dates. The ATP calculation is a more sophisticated approach, netting supply and demand across multiple days to reflect more accurately how much quantity is available to promise on a particular date.
Note: Available quantity is calculated for display only on the Item/Product Availability inquiry page. This calculation is not performed when promising order lines.
If dependent demand is not included in the ATP calculation, or if dependent demand is included and the Incl WIP in Starting Qty option is selected, the available quantity is calculated for each schedule date as follows, starting with the current schedule date and working forward:
Available Qty = Available Qty for the previous schedule date (or Starting Qty Available for today's date) + Total Supply Qty for the schedule date − Total Demand Qty for the schedule date.
If dependent demand is included in the calculation and the Incl WIP in Starting Qty option is selected, total demand quantity in the previous formula is calculated as follows:
Total Demand Qty = Total Finished Good Demand Qty + Total Dependent Demand.
If dependent demand is included in the ATP calculation, but the Incl WIP in Starting Qty option is not selected, available quantity is calculated for each schedule date as follows, starting with the current schedule date and working forward:
Available Qty = Available Qty for the previous schedule date (or Starting Qty Available for today's date) + Total Supply Qty for the schedule date − Total Finished Good Demand Qty for the schedule date − Non-WIP Dependent Demand for the schedule date.
Calculating the First Available Ship Date
If you specify a quantity requested on the Availability Inquiry Selection page, the ATP function calculates the first available ship date for the specified quantity as follows:
The quantity requested is compared with the cumulative ATP starting with today's schedule date and working forward.
When the cumulative ATP is equal to or greater than the quantity requested, the schedule date is checked against valid shipping dates for the business unit defined on the Closure Calendar page.
The first schedule date on which the cumulative ATP is greater than or equal to the quantity requested and on which the date is valid for shipping operations for the business unit is recorded as the first available ship date.
If no available ship date is found with enough cumulative ATP quantity, a message appears.
When you promise an order online using the Order Entry Form component, you provide the order quantity and schedule ship date, and the ATP function determines whether the quantity can be promised on the given ship date. If the ATP function determines that the full quantity cannot be promised on the schedule date, you can change the request quantity, change the schedule date to the first date that the full quantity can be promised (the first available ship date), or split the order lines into multiple schedule lines with the maximum quantity that can be promised on those dates.
Example ATP Calculation
To illustrate how ATP is calculated for a given time period, consider the following picture of demand and supply for an ATP calculation made on May 1.
|
Schedule Date |
May 1 |
May 2 |
May 3 |
May 4 |
May 5 |
May 6 |
May 7 |
May 8 |
|---|---|---|---|---|---|---|---|---|
|
Demand |
||||||||
|
Promised |
50 |
100 |
60 |
50 |
100 |
120 |
40 |
60 |
|
Dependent Demand |
40 |
40 |
20 |
|||||
|
Total Demand |
90 |
100 |
60 |
50 |
140 |
140 |
40 |
60 |
|
Supply: |
||||||||
|
Current Available |
150 |
|||||||
|
Purchase Orders |
100 |
|||||||
|
Transfers |
||||||||
|
Scheduled Production |
200 |
300 |
300 |
|||||
|
Total Supply |
150 |
300 |
0 |
0 |
300 |
300 |
||
|
ATP Per Schedule Date |
60 |
70 |
0 |
0 |
0 |
0 |
0 |
240 |
|
Cumulative ATP |
60 |
130 |
130 |
130 |
130 |
130 |
130 |
370 |
In this sample ATP calculation, the current date is May 1 and the latest scheduled date for both promised demand and incoming supply is May 8. Demand or supply orders exist every day between, providing an eight-day period over which to calculate available future supplies.
The May 1 date represents today's supply and demand, which includes any supply orders scheduled to be received today, any demand orders scheduled to be fulfilled today, and any supply or demand orders that have not been received or fulfilled as scheduled for schedule dates before May 1. The Incl WIP in Starting Qty option is selected in this example, so the available quantity for the item in the business unit (from BU_ITEMS_INV.qty_available), plus the total quantity of the item in WIP locations is captured as part of the supply for the current schedule date. This is the current available quantity in the previous chart.
After supply and demand information has been captured, the ATP balance for each schedule date is calculated, starting with the schedule date at the furthest point in the future and working back to the current date. In this example, the ATP is first calculated for May 8 by subtracting the total demand scheduled for fulfillment on May 8 from the total supply scheduled for receipt: 300 − 60 = 240.
ATP is calculated as the larger of two values: net supply or zero. Therefore, for schedule dates when there is no supply or when demand exceeds supply resulting in a negative net supply, the ATP is zero. For this reason, the ATPs for schedule dates May 7, May 6, May 4, and May 3 are each 0.
For May 5, a total supply of 300 is scheduled for receipt and a total demand of 140 is scheduled for fulfillment. However, in addition to the demand for May 5, the ATP calculation must also account for demand for future dates on which there is no scheduled supply. In our example, total demand from May 6 and May 7 is also subtracted from the May 5 supply to calculate the ATP for May 5: 300 − 140 − 140 − 40 = -20. Since this is less than 0, the ATP quantity is set to 0, with 20 considered as leftover demand quantity.
Demand from May 2, May 3, and May 4, plus any leftover demand quantity is then subtracted from the supply expected on May 2 to calculate the ATP for May 2: 300 −100 − 60 − 50 − 20 = 70. The leftover demand quantity is reset to 0, because there was enough supply to meet the demand. Finally, the ATP for the current date, May 1, can be calculated: 150 − 90 = 60.
Cumulative ATP is a running sum of the ATP quantities calculated for each schedule date. Cumulative ATP for a given date is calculated by adding the ATP for that date to the cumulative ATP of the prior date. The cumulative ATP of the current date will always be the same as its ATP quantity. For example, the ATP (and cumulative ATP) quantity for May 1 is 60 and the ATP quantity for May 2 is 70; therefore, the cumulative ATP for May 2 is 130 (60 + 70 = 130). The cumulative ATP for May 3 is also 130 (130 + 0 = 130).