Supply Allocation Calculations

Inventory demand can originate from several sources, including:

• Sales to customers (sales orders)

• Retail store locations (transfer orders)

• Warehouse distribution centers (transfer orders)

• 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:

• Vendor fulfillment of purchase orders (purchase orders)

• Warehouse distribution centers (transfer orders)

• 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.

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.

The following are allocation calculation triggers:

• Automated Real Time – NetSuite calculates allocation automatically in real time if you set the Perform Supply Allocation After Transaction Entry, Update or Delete preference.

  The following edits to demand orders can prompt a new allocation calculation:

  • Item

  • Quantity

  • Location

  • Supply Required by Date

  • Allocation Strategy

  This re-calculation only affects the edited demand order and only allocates available supplies. Current and future inventory supplies that are not allocated to other demands.

  • NetSuite calculates allocation each time a demand order is created, edited, or deleted (Sales Order, Transfer Order, Work Order).

    When a supply quantity falls below the allocated quantities, de–allocation is enforced on some demand orders. The de–allocated orders are determined by the system based on reverse sequence of the demand transaction sorting options in the Supply Allocation setup.

  • NetSuite calculates allocation each time a supply order is created, edited, or deleted (Purchase Order, Transfer Order, Work Order).

  • NetSuite calculates allocation for each order line.

  For details on this preference, see Setting Demand Preferences for Supply Allocation.

• On Demand – NetSuite calculates allocation for multiple demand orders using the Allocate Orders page.

• Scheduled – NetSuite calculates allocation automatically for muleiple demand orders based on schedules using the Order Allocation Schedule page.

  For more information, see Creating Order Allocation Schedules.

• 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:

• On the allocated order line, check the Commitment Confirmed box.

• 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.

General Notices