Supply Allocation Calculations
Set the preference to Perform Supply Allocation After Transaction Entry, Update or Delete and then save a demand order form. NetSuite then performs a new allocation calculation in real time for each order line. This calculation determines whether inventory supplies can meet the demand on the order by the Supply Required By Date.
Inventory demand can originate from several sources, including:
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Sales to customers (sales orders)
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Retail store locations (transfer orders)
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Warehouse distribution centers (transfer orders)
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Assembly manufacturing locations (work orders)
After you enter these transactions, the Supply Allocation feature uses them to calculate demand for the items on the order. Then, demand for items is matched to current and future sources of supply for the items. Inventory supply sources can include these examples:
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Vendor fulfillment of purchase orders (purchase orders)
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Warehouse distribution centers (transfer orders)
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Assembly manufacturing locations (work orders)
Based on allocation strategies defined on order lines, NetSuite performs supply allocation calculations that determine the best ways to commit supply to demand. For details about strategies, see. For details about strategies, see Allocation Strategies.
NetSuite can perform allocation calculations automatically based on preference settings or based on predetermined schedules. The following are allocation calculation triggers:
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Automated Real Time - NetSuite calculates allocation automatically in real time if you set the Perform Supply Allocation After Transaction Entry, Update or Delete preference.
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NetSuite calculates allocation each time a demand order is created, edited, or deleted (Sales Order, Transfer Order, Work Order).
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NetSuite calculates allocation each time a supply order is created, edited, or deleted (Purchase Order, Transfer Order, Work Order).
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NetSuite calculates allocation for each order line.
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Reallocation whenever supply falls below allocated quantities
For details on this preference, see Setting Demand Preferences for Supply Allocation.
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On Demand - NetSuite calculates allocation for demand orders using the Allocate Orders page.
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Scheduled - NetSuite calculates allocation automatically for demand orders based on schedules using the Order Allocation Schedule page.
For more information, see Creating Order Allocation Schedules.
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Manual - Manually calculate reallocation for demand orders using the Reallocate Items page.
When a supply quantity is matched to a demand quantity, that quantity is allocated to the specific demand order. When the allocation is set as Firm, that quantity cannot be changed or reallocated to another order. If the allocation is not firmed, quantities allocated to that demand order may be reallocated by the supply allocation process during a future calculation.
You can set an allocation as firm in one of two ways:
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On the allocated order line, check the Commitment Confirmed box.
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On an Allocation Strategy, set the Allocation Type field to Firm Allocation. Then, apply the associated strategy to the order line before allocation.
For more information, see Creating Allocation Strategies and Applying Allocation Strategies to Order Lines.
If a calculation determines that demand cannot be met, an alert warns you that demand for one or more lines cannot be met. For more information, see Supply Allocation Exceptions.
Available Date Calculation on Supply Allocation Strategies
Allocation strategies include the Available Date Calculation setting on which you can specify whether to consider the ATP lead time when calculating the available date. Based on your setting, it determines which available date sources to use for the calculation. Then, it chooses the latest date among the available date sources, as shown in the following table:
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Available Date Calculation Option |
Order Line Allocation |
Date Source (for Expected Ship Date or Expected Supply Date) * |
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Calculate Available Date with ATP Lead Time ** |
Fully allocated |
Supply By Required Date Date of latest supply allocation Current Date |
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Not fully allocated |
Supply By Required Date Date of latest supply allocation Current Date + ATP lead time |
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No allocation |
Supply By Required Date Current Date + ATP lead time |
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Calculate Available Date without ATP Lead Time |
Not fully allocated |
Supply By Required Date Date of latest supply allocation Current Date |
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No allocation |
(No available date) |
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* For work orders, date calculations apply to the Expected Supply Date. For transfer and sales orders, they apply to the Expected Ship Date. ** If the ATP lead time is not set or is set to zero, only the current date is considered. |
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Supply Allocation always assigns an available date to order lines with allocation strategies that consider the ATP lead time for available date calculation. If you apply a strategy that does not consider the ATP lead time, it does not calculate and assign an available date when the order line has no allocation at all.
Total Lead Time = <Work Order Fixed Lead Time> + <Work Order Variable Lead time> * ceiling (<order quantity>/<Work Order Lead Time Lot Size>).
Expected Receipt Date Calculation Through Supply Allocation
When Supply Allocation sets the Expected Ship Date, it also calculates and assigns or updates the Expected Receipt Date on transfer orders and inter-company transfer orders. It calculates this date based on the Expected Ship Date and the lead time. By default, it derives the lead time from the Default Lead Time Between Locations preference that you set for transfer orders. However, it may choose the lead time of another record used for some replenishment methods instead, as described in the following list:
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Master Production Schedule or Material Requirements Planning – if you use the Material Requirements Planning feature
For either of these replenishment methods, Supply Allocation uses the lead time of a planning rule group that applies to the item, to location, and from location of the order. It considers your Default Planning Rule Group preference first, before other rule groups.
Note:A planning rule group may be applied indirectly to an item through a planning item group. See Creating Planning Item Groups.
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Time Phased – if you use the Setting Up Distribution Resource Planning feature
For items replenished through the Time Phased method, Supply Allocation uses the lead time of a bill of distribution that applies to the item, to location, and from location of the order.
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Reorder Point
Supply Allocation uses same lead time preference setting that you set for transfer orders.
For more information about the Default Lead Time Between Locations preference, see Transfer Order Preferences.
To assign a replenishment method to an item, see Entering Inventory Management Details.