What does Available-to-Promise (ATP) indicate?

Available-to-Promise (ATP) is a crucial metric used in supply chain management and inventory control that specifically assesses whether production can meet proposed demand by a specific date. This concept helps businesses understand their ability to fulfill customer orders based on current resources, including production capacity, existing inventory, and supply chain constraints.

When customers place orders with specific delivery dates, ATP provides insights into whether those orders can be fulfilled on time. It takes into account not only the inventory available at that moment but also the production schedules and lead times required for any additional items that need to be manufactured. Thus, ATP serves as a real-time indicator for sales teams and supply chain managers to make informed decisions regarding order commitments.

In contrast, the other options address different aspects of inventory and production management. The ability to fulfill past orders refers to historical data, while potential production capacity in future periods looks more at long-term planning rather than immediate availability. Current inventory levels provide a snapshot but do not incorporate other key elements required to assess order commitments effectively, such as lead times and production schedules.