Stock Availability Estimate

How The Estimate Is Calculated

It is important to understand how the estimate is calculated and its limitations, otherwise you may provide your customers and staff with wrong or misleading information.

The calculator begins by examining each open purchase order in the system that relates the stock item being queried. From these it retrieves the best estimated arrival dates possible for the quantities ordered. The order of priority is:

1. If an expected delivery date is assigned to the stock item on the purchase order, this is used.

2. If an expected delivery date is assigned to the entire purchase order (but is absent from the specific item in question), this is used.

3. In the absence of expected delivery dates, if a lead time specific to the stock item is specified in Stock Control, this is used.

4. In the absence of a item specific lead time, the lead time of the supplier is used.

If no expected date or lead time can be retrieved, CAPITAL will be unable to estimate the arrival date and does not proceed further with the estimate.

CAPITAL then looks at the number of back orders for this item in the Back Order Control Centre.

The system then compares the delivery lead times and the number of back orders in the system and calculates when the order is likely to be filled. Several outcomes are possible:

• The item is available now, ex stock.

• The item will be available (if an order is placed now) by a specified date.

• The item will not be available by any specified date, but if ordered today, it will take a specified amount of time for the goods to arrive.

• It is not possible to calculate an estimate because one or more purchase orders have no expected delivery date, or the item has no specified lead time.

The availability check always offers a 'safe' or conservative estimate. It may be possible that orders will be filled for some customers before the estimated date. However, it is always presumed that the estimates are accurate. If your delivery estimates are wrong, then the estimate will be wrong. When feasible you should consider adding padding to your lead times, in case goods arrive later than expected.

It is also possible that several customers may order the same goods on the same day. In this situation, CAPITAL provides an estimate for filling all orders on that day, not just the order specific to your customer. This is because CAPITAL cannot know which order will be filled first. For example, consider this scenario:

Customer A orders 10 Widgets on the 5th of June

Customer B orders 5 Widgets on the 5th of June

A shipment of 12 Widgets is due on the 8th of July

A further shipment of 25 Widgets is due on the 24th of July.

Given this situation, CAPITAL will estimate that any new orders will be filled by the 24th of July at the earliest, provided that less than 22 units are required. (This is 37 units arriving in total by the 24th of July, less 15 units already committed.)

However, if a Customer Price Check is performed on a specific back order accessed from the Back Order Control Centre, CAPITAL will still place the estimate as of the 24th of July for Customer A or Customer B. This is because although Customer B's order could in principle be filled by the 8th of July (as Customer B wants 5 units and 12 units will arrive by that date) there is no way to guarantee that this will occur, as it may be decided to assign some or most of that inventory to Customer A's order.

This is also one of the reasons why CAPITAL lists all purchase orders and back orders pending in the Order Status window. Operators can then decide on a less conservative estimate than the one offered by the availability check, if that is warranted.