System Calculations for Supply-and-Demand Quantities

The system uses supply-and-demand inclusion rules to calculate the supply-and-demand quantities for an item. A manufacturing environment uses work orders to create a supply of parts or materials, whereas a maintenance environment uses work orders to create a demand for parts.

Type	Definition
Sources of supply	Starting with the requested date on purchase orders, the system calculates the supply quantity from these sources: On-hand inventory, where the supply quantity is the quantity on hand less hard commitments and quantities on sales and work orders. Purchase orders, where the supply quantity is the quantity entered on purchase orders. Manufacturing work orders, where the supply quantity is the quantity entered on a work order less the quantity shipped.
Sources of demand	Starting with the requested date on sales orders, the system calculates the demand quantity from these sources: Sales orders, where the demand quantity is the quantity entered on sales orders less the quantity shipped and the quantity canceled. Safety stock, where the demand quantity is any quantity reserved as protection against fluctuations in demand and supply. Work order requirements and parts lists, where the demand quantity for sources such as the quantity required less the quantity issued.