ATP – Available to promise.
ATP is an integer, which defines, the number of stock that is available to promise to customer as sell-able. In real life, the stock present in warehouse doesn’t necessarily means that it is the amount, you can sell. this is because
- Some stock available at a warehouse, when it start operations (after a reconciliation, typically every morning). it is known as Stock on hand (SOH).
- some stock at a warehouse, may already be ordered, and waiting to be shipped. we can not sell it again. such stock is known as reserved.
- We may ask for more stock from other partner/warehouse in a timely manner. such stock is called oversell.
- an order is cancelled. so it would be available again. we need to subtract ordered quantity from reserved.
- An order is returned. so it would be available again. we need to subtract ordered quantity from reserved.
so we see, there may be many business rules, which may define the ATP level. A typical definition of ATP may be:
ATP = ( SOH + OverSell ) – reserved