| Allocation and hard pegging overview |  |
| Allocation of inventory and hard pegging of orders are related methods used to designate a quantity of supply to a specific purpose. The allocation and hard pegging functionality enables you to: Promise a customer a particular quantity of an item. The allocated inventory cannot be shipped to other customers and serves as a reservation. Link an identifiable quantity of an item to a particular demand. In this way, this quantity cannot be interchanged with another quantity of the same item. For example, you use this to keep components and subassemblies together. To do this, ERP LN links supply orders to demand orders using specifications. If inventory is allocated or supply is hard pegged to a specific demand, numerous processes are involved, such as: Order planning Issue and receive materials Outbound and ship goods To use allocation and hard pegging, you must set up the master data. For more information, refer to To set up allocation and hard pegging. Using allocation and hard pegging When a demand order is created, ERP LN: Links a specification to the demand order. Allocates inventory to the demand order. Updates the quantity of the Allocated-to Inventory Allocated field in the Inventory by Specification (whwmd2519m000) session with the quantity of the demand order, even if insufficient inventory is available to fulfill the demand order. Note If the demand order is created manually or from independent demand, specifications are created if the allocation and hard pegging terms and conditions are defined. If the demand order is created from dependent demand, the demand order can only receive a specification from the origin that created the order. To see how a specification is transferred between business objects, refer to Allocation and hard pegging example. To handle insufficient inventory If insufficient inventory is available to fulfil a demand order, you can create supply orders or allocate inventory. Supply orders are generated or manually created if insufficient allocated or unallocated inventory is present to fulfil the demand order. If a supply order is generated for the demand order, a specification is also generated for the supply order. This specification has the same characteristics as the specification of the demand order. For more information, refer to To hard peg supply orders. Inventory is allocated using allocation buffers if insufficient allocated, but sufficient unallocated inventory is present. The inventory included in an allocation buffer is linked to a specification. As a result, the buffered inventory is available for demand orders with matching specification criteria. For more information, refer to Allocation buffers. Inventory allocation levels Inventory allocation levels determine whether allocated-to inventory is identifiable and traceable in the warehouse through handling units or merely registered as allocated-to inventory. You can define allocation levels for warehouse - item combinations in the Warehouse - Item (whwmd2510m000) session and the Item - Warehousing (whwmd4100s000) session. For more information, refer to Inventory allocation levels. To change inventory allocations Changing an inventory allocation is required, for example, if the order for which the inventory is allocated is canceled. To change an allocation, use an allocation change order. Allocation change orders are generated based on a number group and series defined in the Inventory Handling Parameters (whinh0100m000) session. For more information, refer to: Allocation Change Orders (whinh1120m000) Allocation Change Order Lines (whinh1130m000) Related topics To set up allocation and hard pegging To hard peg supply orders Allocation buffers Inventory allocation levels Allocation and hard pegging example Overview of subcontracting Overview of terms and conditions Vendor managed inventory |