Commonly Used Terms
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Available to Promise (ATP)
Available to Promise (ATP) is the uncommitted portion of a company’s inventory and planned production maintained in the master schedule to support customer-order promising. It allows a business to keep the minimum amount of a given product within their warehouses so that the use of the inventory space is efficient. The ATP quantity is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory, fewer customer orders that are due and overdue.
There are three methods of calculation that are used:
- Discrete ATP - Also known as Incremental Available-To-Promise, is a calculation that is based on the available-to-promise figure in the main schedule. For the first period, the ATP is the sum of the starting inventory added to the MPS quantity minus backlog for all periods until the item is master scheduled again. For all the other periods, if a quantity has been scheduled for that particular time period, then the ATP is this quantity minus all customer commitments for this and other periods until another quantity is scheduled in the MPS. So, for those periods where the quantity scheduled is zero, the ATP is zero (even if deliveries have been promised). The promised customer commitments are accumulated and shown in the period where the item was most recently scheduled.
- Cumulative ATP with a look ahead - The cumulative with look-ahead ATP equals the ATP from the previous period plus the MPS of the period minus the backlog of the period minus the sum of the differences between the backlogs and MPSs of all future periods until, but not to include, the period where point production exceeds the backlogs.
Cumulative ATP without look ahead - The cumulative without look-ahead procedure equals the ATP in the previous period plus the MPS, minus the backlog in the period being considered.