Allocations purposes and auto-adjustment rules

When creating an inventory allocation in Bigblue you must decide its purpose and auto-adjustment rules. These define how allocations affect other channels and how they react to physical inventory variations.

They are both very important to avoid unexpected business outcome such as:

1. Missing sales because a store is out of stock while it shouldn’t
2. Selling out of stock
3. Having a channel cannibalizing the other when it’s not expected.

Choosing the allocation purpose

You an choose between 2 allocation purposes, which defines whether allocated quantities should impact other channels or not.

1. Reserve inventory allows to dedicate inventory to a specific set of channels. All allocated quantities are subtracted to available quantities of other channels.
2. Pre-sell inventory allows to decide the quantity to sell on a specific set of channels. Allocated quantities have no impact on other sales channels.

Choosing the auto-adjustment rule

For each channel you can choose between 2 auto-adjustment rules, which defines if you want the quantity pushed to sales channels to be rounded to the real warehouse quantity. This is made to prevent harmful business outcome in case a significant inventory variation happen at the warehouse and could lead to unintended lost sales or backorders.

Auto-adjustments rules depend on the purpose you initially selected:

1. In case your purpose is to reserve inventory, adjustment happen when available inventory is lower than the allocated quantity:
   1. Follow allocation will keep the actual allocated quantity, and if there is no more inventory orders will go in backorders.
   2. Use available inventory on the contrary will limit the sellable quantity to the available products in the warehouse. Initially reserved quantities are saved and reused as soon as new inventory is available.
2. In case your purpose is to pre-sell inventory, adjustment happen when available inventory is greater than the allocated quantity:
   1. Use available inventory will offer the total number of available items, no matter the initial allocation.
   2. Limit to allocation on the contrary won’t use more than the initially set value.

Considerations for choosing the allocation purpose and auto-adjustment rule

When choosing your allocation purpose and auto-adjustment rule, review the following considerations:

1. Purposes and auto-adjustment rules can’t be modified once the allocation is created.
2. Purposes don’t put constraints on the quantity you allocate:
   1. You don’t need to have available quantities to start using the Reserve purpose.
   2. You can reserve and pre-sell by using the Reserve purpose.