Sales order reservations

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You can change reservations on sales orders. For example, you may have to cancel reservations in the following situations:

  • The priority of existing reservations must be changed. For example, if an important customer places a large order with your company and requests immediate delivery, you may have to cancel some reservations to deliver to that customer.
  • Deliveries are unfulfilled or canceled, and the on-hand inventory must be shared among the customers who are waiting for items.
  • Items were not reserved when the sales order was created, because the person who created the sales order planned to manually reserve items later.

Reserve inventory quantities

You can reserve inventory quantities automatically for a specific sales order. This means that reserved inventory cannot be withdrawn from the warehouse for other orders unless the inventory reservation, or part of the inventory reservation, is canceled.

There are several reasons for reserving inventory:

  • First ordered, first delivered, which means that customers get available items in the same order in which they place their orders.
  • Shortage of items due to a long or unknown delivery time from the vendor. You might want to make sure that certain customers or orders get delivery of the first-available items.
  • Certain customers and certain types of orders have first priority for delivery.
  • Items with serial or batch numbers. You can mark certain items that have been or will be delivered to specific orders.
  • Specially ordered items that are reserved for certain orders.
  • Production orders. For example, you can mark items that are produced for and adjusted to specific orders.

Inventory can be reserved automatically when a new order line is created, or inventory can be reserved manually on the individual orders. This is a parameter in the Accounts receivable parameters page. The setup applies when a new order is created, but the setup on individual orders, or even on specific order lines, can also be changed in the Sales order page.

Only items and bills of materials (BOMs) can be reserved for sales orders. Services cannot be reserved, because there is no on-hand inventory.

Both physical on-hand inventory and ordered, but not yet received, inventory can be reserved.

If a larger quantity is reserved than what the on-hand inventory contains, a warning appears that says that you cannot reserve such a large quantity. You can then either reserve the quantity, anyway, or change the ordered quantity. The quantity can be either reserved or changed. If more items are reserved than are available, the shortage is covered the next time that items are available for delivery.

About reserving items for sales orders

You can reserve inventory quantities for sales orders when you create or change sales order lines. If available inventory quantities are reserved automatically, reserved inventory cannot be withdrawn from the warehouse for any other orders.

Inventory is reserved according to the setup of:

  • Manual or automatic reservation
  • Reserved ordered items or only items on-hand
  • Warehouse proposal
  • Date reservation

About item reservations for orders

In the Reservation field in the Accounts receivable parameters page, you can select to reserve items automatically when you create a sales order line, or to reserve items manually on the individual order line.

If you select Automatic, items are always reserved automatically when you create an order line. If you select Manual, you must manually reserve items for the individual order line.

The method of reservation is the same for all orders and items. You cannot specify manual reservation for some items and automatic reservation for others. Likewise, you cannot specify manual reservation for some orders, customers, and locations, and automatic reservation for other orders, customers, and locations.

If you mix item types, and some are appropriate for manual reservation whereas others are appropriate for automatic reservation, you should select manual reservation.

Typically, the individual legal entity’s business structure determines whether inventory items are reserved automatically or manually. For more information, see the following recommendations.

Automatic reservation

Automatic item reservation is recommended in the following circumstances:

  • You want to ensure that units are always reserved for orders when the order line is created, so the items are available on the delivery date.
  • Items are standard inventory items, meaning they are not produced for, adjusted to, or purchased for one specific order. Any quantity of on-hand items can be picked for an order.
  • Deliveries from vendors are uncertain, and there is no ongoing receipt of goods. You might want to ensure that the items are reserved and delivered in the same order in which the order lines are created.
  • The selection from inventory is optional, meaning you do not need to pick a specific batch and serial number for an item until the delivery date.

Manual reservation

Manual item reservation is recommended in the following circumstances:

  • You do not typically make item reservations when you create order lines.
  • Orders for delivery are marked manually, such as when items that are ordered by specific customers or special orders should be processed first.
  • Items are produced for, adjusted to, or purchased for specific orders. A specific unit of the on-hand item number must be picked for an order.
  • Items are not reserved in the same order in which the order lines are created.
  • A specific batch and serial number should be picked for each order.
  • A limited number of on-hand items should be split between orders that are manually selected.