How Drop Shipments Are Processed in Supply Planning

Supply planning recommends new planned orders for drop shipments and manages drop shipment purchase orders.

The planning process pegs supply to a sales order when both of the following conditions are met:

• A sales order line is marked as a drop shipment.

• There's an existing purchase order that's shipped directly to the customer site on the sales order.

Although not actually a reservation, the supply planning process treats the drop shipment purchase order as a reservation. In this case, the drop shipment purchase order can't be used for any other demand.