What is the principle behind availability calculations for supply records?

The principle behind availability calculations for supply records hinges on the concept of on-hand inventory. This means that for any availability calculation, the total inventory that is physically present as of a given past date is considered. This includes the inventory that is already in stock but does not yet factor in any future receipts or unfulfilled orders.

Understanding this context is crucial for managing inventory levels accurately. By seeing only on-hand inventory, organizations can make informed decisions about replenishment and demand avoidance or fulfilment strategies without over-relying on future inventory that has yet to be received.

Other concepts like considering only finished goods or scheduled quantities misrepresent the total available inventory by excluding important data. Similarly, conceptions that suggest all receipts are immediately available overlook the realities of lead times and processing delays integral to effective supply chain management. Thus, on-hand inventory serves as a grounded metric reflecting real-time stock levels for making operational decisions.