Availability vs. Quantity on Hand

Availability of an item is sometimes confused with the quantity on hand (QOH).  While both numbers are important, QOH is just part of the formula for calculating availability.  Where QOH is how many of an item is physically on the shelf, availability is how many of the item are actually available for orders.

Example 1: You have 5 widgets on the shelf.  However, all 5 have been allocated (spoken for) by previous orders.  Therefore, the Availability is zero and the item will show as Out of Stock on the web site even though there are 5 on the shelf.

Example 2: There are no widgets on the shelf.  However, the widget is a BOM type item and you have the components to manufacture 5 widgets.  The availabilty for the widget is 5 and it will show In Stock on the web site even though none physically exist at this time.

FYI: The examples above are simple in design.  There are more factors involved with actually determining if an item is in or out of stock. 

The basic formula for figuring Availability is as follows:

Availability = (QOH - Allocated) + Component Availability

The first part of the equation (QOH - Allocated) has to do with parent items, as in example 1.  It basically says the availabilty is the QOH minus any items that are already spoken for (Allocated).

The second part of the equation (+ Component Availability) is for items that are BOM or Kit items, as in example 2.  Besides the availability of the parent item, we have to add how many more of the parent item we have the components for.

Component Availability (CA)

  • If parent item is Stocked and:
    • Purchased, then CA = 0 (There are no components in this case.)
    • Manufactured BOM and planning lead time > 0, then CA = 0 (There will be a delay in the manufacturing of parent item.)
    • Manufactured BOM and Planning lead time = 0, then CA is calculated from BOM available components (No delay in manufacturing parent item.)
  • If parent item is Non Stocked and:
    • Purchased, then item will show In Stock (This is for items such as audio or video files that don't exist physically but are always available.  The CA is infinite.)
    • Manufactured Kit, then CA is calculated from the Kit available components
    • Manufactured BOM and planning lead time > 0, then CA = 0 (There will be a delay in the manufacturing of parent item.)
    • Manufactured BOM and Planning lead time = 0, then CA is calculated from BOM available components (No delay in manufacturing parent item.)

FYI: The Planning Lead Time is set in Dashboard > Warehouse Management > Items > Logistics > Manufacturing tab.