Available to Promise

Available to Promise (ATP), short for “availability check”, is an important method for inventory and capacity planning in companies, particularly in the context of e-commerce. It enables the continuous calculation of the proportion of available stock and production capacity that is not already allocated to existing orders.

At its core, ATP aims to ensure that companies can promise their customers binding delivery dates for online orders. This requires an accurate assessment of available resources to ensure that customer orders can be fulfilled on time.

The ATP is calculated based on a number of factors, including

1. **Available Inventory:** ATP takes into account a company’s current inventory levels as well as planned goods receipts and issues. This determines how many units of a product are available for new orders.

2 **Production capacity:** For companies that manufacture products, ATP also takes into account the available production capacity. This includes an estimate of current production capacity utilization as well as planned production cycles and maintenance times.

3 **Open orders:** Existing orders and their associated delivery dates are also included in the ATP calculation. This ensures that new orders are not at the expense of delivery dates that have already been allocated.

In the age of e-commerce, effective ATP calculation is crucial for companies to provide customers with an optimal shopping experience. By being able to promise their customers binding delivery dates, companies increase customer satisfaction while improving their competitiveness in the market. Ultimately, ATP helps to increase supply chain efficiency and improve operational performance by enabling accurate and timely planning of inventory and production resources.