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Int. J. Production Economics 9394 (2005) 239252 www.elsevier.com/locate/dsw

Advanced available-to-promise: Classication, selected methods and requirements for operations and inventory management
Richard Pibernik
School of Business and Economics, Goethe-University, Mertonstrasse 17, D-60054 Frankfurt, Germany

Abstract Advanced available-to-promise (AATP) comprises of an assortment of methods and tools to enhance order promising responsiveness and order fulllment reliability. This paper contributes to a theoretical framework for the development of models and algorithms supporting order quantity and due date quoting. At rst, alternative generic AATP systems will be identied on the basis of relevant classication criteria. Based upon this classication, the AATP planning mechanisms will be detailed for two generic AATP types. On the basis of the introduced AATP types and the description of selected models we nally derive requirements, which operations and inventory management have to meet in order to ensure a successful application of AATP. r 2004 Elsevier B.V. All rights reserved.
Keywords: Order promising; Available-to-promise; Order management; Capable to promise; Demand management

1. Introduction Advanced available-to-promise (AATP) refers to a variety of methods and tools to enhance the responsiveness of order promising and the reliability of order fulllment. Based on customer requests (i.e. requested product, order quantity and delivery time window) they support order quantity and order due date quoting. AATP directly links available resources, i.e. nished goods and work in progress, as well as raw materials, production and distribution capacity with customer orders in order to improve the overall performance of a supply chain (Chen et al., 2001). The major goals pursued with the implementation of AATP are (1) the improvement of on time delivery by generating reliable quotes, (2) the reduction of the number of missed business opportunities by employing more effective methods for order promising and (3) an enhancement of revenue and protability by increasing the average sales price (Kilger and Schneeweiss, 2000).
E-mail address: pibernik@wiwi.uni-frankfurt.de (R. Pibernik). 0925-5273/$ - see front matter r 2004 Elsevier B.V. All rights reserved. doi:10.1016/j.ijpe.2004.06.023

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AATP is usually integrated in ERP systems and Advanced Planning Systems (APS). Their functional scope can vary signicantly. Conventional ATP, commonly implemented in ERP, merely determines the availability of nished goods at certain points of time in the future. Advanced ATP provides a broader scope of functions, such as order quantity and due date quoting on the basis of available supply chain resources and alternative measures in case of an anticipated shortage of nished goods or manufacturing resources. The development of methods and their application to support order promising has primarily been driven by providers of ERP and APS. Until now, a limited number of theoretically founded contributions have been made. Publications addressing AATP either discuss the needs or propose features for AATP Systems from a general and rather unspecic perspective or present methods applicable in a particular companyspecic setting only. This paper provides a framework supporting the successful development and implementation of AATP and points out the requirements, AATP implementation imposes on operations and inventory management. At rst, alternative generic AATP types will be identied on the basis of relevant classication criteria. Based upon this classication, the AATP planning mechanisms will be detailed for two generic AATP types. We introduce a mixed-integer programming model as well as a planning mechanism suitable for batch and real-time order quantity and due date quoting on the basis of nished goods inventory. We derive the requirements, operations and inventory management have to meet in order to enable a successful application of AATP.

2. Literature review The relevant literature on order promising and ATP can be broadly subdivided into textbook and management-oriented publications (e.g. e[B2]x, 2002; Fischer, 2001; Kilger and Schneeweiss, 2000; Knolmayer et al., 2002) as well as research papers introducing AATP methods in regard to specic practical ATP applications. The former only discuss features of ATP in a rather unspecic and general way and briey comment on the potential benets of advanced ATP. However, they usually neither consider the different company-specic requirements or different conguration alternatives for AATP nor do they demonstrate suitable methods supporting order quantity and due date quoting. Very few contributions provide quantitative methods for quantity and due date promising. Taylor and Plenert (1999) present a basic approach for nite capacity promising. Their approach supports a continuous monitoring of the manufacturing capacity that can be utilized to fulll additional incoming customer orders. Major contributions have been made by Chen et al. (2002, 2001). The authors develop mixed-integer programming models that allocate resources among customer orders that arrive within a pre-determined time interval (batching-interval). The proposed model is focused on a particular AATP type: Batch AATP for a congure-to-order case in computer manufacturing. Jeong et al. (2002) consider a similar AATP type (batch AATP for the assembly of TFT Displays) and present an algorithm which subsequently allocates customer orders to relevant resources on the basis of customer-specic due dates. Fischer (2001) proposes a mixed-integer programming model for allocating available nished goods inventory to a set of customer orders. Allocation is based on a coefcient cij which is supposed to represent suitability of an available portion i of inventory on hand for the fulllment of customer order j. The coefcients values are calculated on the basis of individual indicators reecting customer priorities, order-specic sales and prot margins, as well as penalty costs for early or late delivery.1 Kilger and Schneeweiss (2000) as well as Fischer (2001)
1 As depicted in Pibernik (2002), the proposed methodology for the determination of the coefcients and consequently also for the allocation of nished goods inventory to customer orders can lead to signicant problems in regard to consistency and traceability of the results.

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describe in a very general way, how a real-time planning algorithm should be designed in order to support quantity and due date quoting. Considering the previously described research in regard to order promising and fulllment, this paper aims at a theoretical foundation of AATP. We present a well-founded classication of alternative AATP types and derive requirements for operations and inventory management on the basis of generic AATP methods which are appropriate for implementation in supply chain management software suites and have not yet been considered in the relevant literature.

3. A classication of advanced ATP 3.1. An outline of advanced ATP functions A manufacturer or retailer has to decide whether to accept or deny a potential customer order. This decision must be based upon the ordered quantity, customers delivery time window, nished goods inventory, supply chain lead times and supply chain resources. If the manufacturer or retailer anticipates the availability of the ordered quantity within the customers delivery time window, he conrms the customers order, determines a reliable due date within the customers delivery time window and assigns the required quantity of nished goods in supply or the requisite amount of supply chain resources (seminished goods, raw materials, production capacity). In case of an anticipated shortage of nished goods or supply chain resources, feasible alternative strategies to fulll the customers order, e.g. partial deliveries and deliveries of substitute products, should be generated and assessed. The customer order will have to be denied if no feasible alternative strategies can be identied and employed. As we will demonstrate, AATP methods and systems need to be classied on the basis of relevant criteria in order to facilitate the implementation of models and algorithms for order quantity and due date quoting. In the following section, the relevant characteristics will be described in detail and used for specifying generic AATP types. 3.2. Generic advanced ATP types The initial characteristic used for classifying AATP is, what we shall call the availability level. As mentioned previously, quantity and due date quoting can either be performed on the basis of nished goods inventory or on the basis of supply chain resources, including raw materials, work-in-process, nished goods, and even production and distribution capacities (see Chen et al., 2001). Conventional ATP, implemented in ERP systems, is always based on nished goods inventory. It provides information regarding product availability by determining the uncommitted portion of a companys inventory and planned production, maintained in the master schedule (APICS, 1987) While conventional ATP is simply a monitoring of the uncommitted portion of current and future available nished goods, advanced ATP provides a decision making mechanism for allocating available nished goods inventory to customer orders and concluding order quantities and due date quotes. AATP based on nished goods inventory is applicable in a make-tostock manufacturing environment only. Advanced ATP based on supply chain resources represents a systematic resource allocation process. It provides a decision making mechanism for allocating available supply chain resources to customer orders and determining order quantity and due date quotes (see e.g. Chen et al., 2001). A pre-condition for AATP based on supply chain resources is detailed information regarding supply chain capacity requirements for each product included in the product range. Therefore, the bill of material, the routing plan as well as information on manufacturing and distribution capacity requirements must be available to perform the resource allocation. AATP based on supply chain resources is appropriate in make-to-order production.

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242 Table 1 Generic AATP types R. Pibernik / Int. J. Production Economics 9394 (2005) 239252

Availability level
Finished goods (FG) Supply chain resources (SCR) RT/SCR/A B/SCR/A Active (A) RT/SCR/P B/SCR/P Passive (P)

Operating mode Batch (B)

Real-time (RT)

RT/FG/A B/FG/A Active (A)

RT/FG/P B/FG/P Passive (P)

Interaction with manufacturing resource planning

The second characteristic used for classifying AATP is its operating mode. AATP can run in real-time or batch mode. When employed in real-time mode, order quantity and due date quoting is completed at the time of a customers request (see e.g. Chen et al., 2002, 2001). The request triggers the AATP planning mechanism. If AATP is operated in batch mode, the potential customer orders arriving within a predetermined time interval (batching-interval) are rst collected and then processed together by a model or algorithm, that simultaneously or sequentially determines order quantities and due dates. Thus, the AATP planning mechanism is executed periodically, e.g. at the end of each day or week. On the one hand, the operating mode of AATP affects customer response times and therefore the customers perception of the service provided by the company, on the other hand it has impact on models and algorithms employed for performing order quantity and due date quoting (see Section 4). The last characteristic used for classifying AATP is the interaction with manufacturing resource planning. So-called passive AATP Systems receive information regarding nished goods and supply chain resource availability from the manufacturing resource planning system. Based on this information, order quantities and due dates are quoted. Passive AATP Systems do not have direct impact on manufacturing resource planning apart from determining the accepted orders and their due dates. Active AATP is integrated in the companys manufacturing resource planning. Whilst performing the usual order quantity and due date quoting, active AATP generates or modies the master schedule. Thus AATP simultaneously determines and adjusts the master schedule as well as the order quantity and due date quotes. Active AATP is limited to small batch and single unit production. Its application in a large batch or bulk production opposes the generally pursued goal of high and even capacity utilization. Passive AATP does not have any limitations in regard to the production type and is therefore also applicable in large batch and bulk production. Furthermore, it has to be considered, that active AATPs application is especially suitable in a make-to-order production environment, whereas passive AATP has greater applicability in a make-tostock environment. Using the main characteristics outlined above, eight generic AATP types can be derived. These are illustrated in Table 1. In Section 4, it will become clear that this categorization is essential for an accurate characterization and also implementation of different AATP methods. 3.3. Additional advanced ATP functionalities In addition to the functionalities, identied in the previous section, further functionalities of AATP are currently discussed (see e.g. Fischer, 2001; Kilger and Schneeweiss, 2000). These functionalities mainly refer to strategies applied in case of an anticipated shortage of nished goods or supply chain resources. They are, however, independent of the employed AATP type and can therefore be considered as general addon features to the generic AATP types, derived above. Three different strategies can be supported by AATP:

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AATP with substitute products: In certain cases substitute products can be delivered within the given delivery time window instead of the product, originally ordered by the customer. This depends, of course, on the availability of a product, the customer will accept instead of the ordered product. The customer will only accept the substitute if it provides at least the same utility as the original, and if its use is not limited, e.g. by technical restrictions. Multi-location AATP: If the customer order cannot be fullled with the nished goods or supply chain resources available at a certain location, available nished goods and resources can be sourced at other locations. Therefore, the AATP planning mechanism has to be applied to a distribution or manufacturing network rather than only to a single location. Multi-location AATP should take different manufacturing and transportation lead times and costs into account, depending on the proposed locations. AATP with partial delivery: If the ordered quantity is not available within the given delivery time window, the customer order can be fullled with two or more partial deliveries, where the rst partial delivery is carried out within the given time window. This option is, of course, only valid if the customer generally accepts partial deliveries. If partial deliveries are taken into account, then AATP should determine the quantities and delivery dates for each partial delivery. The customer can receive partial deliveries from different locations; they can also include substitute products. These different strategies can be combined in any possible sequence in the AATP planning mechanism. For instance, it is possible to rst check whether nished goods or manufacturing resources are available at any of the locations in the distribution or manufacturing network. If this is not the case, substitute availability and acceptance can be considered and if necessary, partial deliveries can be taken into account. Besides generating these strategies sequentially, they can be combined in the AATP planning mechanism in such a way, that all feasible solutions are determined and assessed simultaneously. The decision maker then selects a solution on the basis of data regarding relevant costs and customers priority. This procedure will be detailed in Section 4.2.

4. Selected methods for advanced ATP on the basis of nished goods inventory From the characterization and classication of different AATP types in the previous section, it becomes clear that companies have to identify the generic AATP type and the additional functionalities which meet their specic requirements. These requirements mainly depend upon the design of the manufacturing system (e.g. make-to-stock or make-to-order) and on customers requisites and preferences (e.g. if customers require real-time information on availability and delivery dates). Selecting an appropriate AATP conguration determines the specic methods employed for generating due dates and order quantities. However, the successful application of appropriate methods also imposes specic requirements on both information processing and the performance of operations, inventory and transportation management: Reliable order promises will only be generated if the relevant information is provided and processed accurately and on time and if operations, inventory and transportation management are actually capable of producing and delivering the ordered quantities in accordance with the due dates and order quantities determined by AATP. In this section we describe adequate methods supporting two of the generic AATP types, introduced in the previous section: Batch and real-time AATP on the basis of nished goods inventory. This will facilitate an analysis of the specic requirements which have to be met in order to effectively fulll order quantity and due date quotes (see Section 6). We will also utilize these results in order to derive special requirements associated with the application of the remaining AATP types introduced in the previous section.

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4.1. A model for batch AATP based on nished goods inventory When applying a batch AATP, the potential customer orders arriving within a pre-determined time interval (batching-interval) are rst collected and then processed together in order to determine order acceptance or denial as well as quantities and due dates for accepted orders (see Section 3.2). The AATP planning mechanism is executed at the end of the batching interval. It generates a schedule that species the quantities and due dates of whole or partial deliveries for every accepted customer order in the batch. Uncommitted inventory and planned production is reserved according to the committed due dates. Therefore, an assignment problem has to be solved: The customer orders in the batch have to be assigned to those quantities of nished goods, which are available-to-promise. In general, this assignment problem can either be solved simultaneously for all orders in the batch by employing an optimization model or by applying an adequate algorithm which successively processes the orders on the basis of a pre-determined order sequence. In the following, we present an optimization model which can be employed for a simultaneous generation of order quantities and due dates for a given set of potential customer orders. To exemplarily illustrate the impact of the additional functionalities, described in Section 3.3, the model also accounts for partial deliveries. Let ta ; ta 1; ta 1; ta 2; . . . ; ta T 1; ta T te 1; te be the AATP planning horizon for one batch, consisting of T discrete time periods. The point of time t denotes the beginning and t 1 the end of a time period t; t 1 2 fta ; ta 1; . . . ; te 1; te g. We assume that the customer orders were collected during the batching-interval ta t; ta , where toT represents the length of the batching-interval, e.g. 24 h. t determines the points of time ta, ta t; ta 2t; . . ., at which the AATP planning mechanism is executed. We therefore assume, the model is run on a rolling horizon basis (see e.g. Chen et al., 2001). Let A(ta) denote the set of potential customer orders for a single product, collected during the most recent batching-interval ta t; ta . Every potential customer order i 2 Ata can be characterized by a quadruple d u ; d o ; zu ; zo of minimum order quantity d u , maximum order quantity d o , earliest date of delivery zu 2 i i i i i i i fta 1; . . . ; te g and latest date of delivery zo 2 fta 1; . . . ; te g; zo Xzu . The customer requires delivery of i i i quantity d o within the time window zu ; zo . He will, however, accept a partial delivery of the minimum i i i quantity d u within zu ; zo and delivery of the remainder at a point of time t4zo . We assume, that at every i i i i point of time t t ta 1; . . . ; te a given quantity of qt units of the product is produced and put into stock. qt is determined by the master schedule. We further assume, that the qt units can be delivered to a customer at the point of time t. Let bt and rt denote the inventory on hand and the committed quantity of nished goods at point of time t. Both inventory on hand bta 1 at ta 1 and the committed quantities rt are determined by AATP runs executed at ta t; ta 2t; . . .. With given values for qt, bt and rt, we can calculate the uncommitted (available-to-promise) quantity of nished goods at point of time t, denoted by atpt . Let lk be the holding costs for nished products per unit and time period, based on the quantity bt of inventory on hand at point of time t t ta 1; . . . ; te . We further assume that we can calculate a prot dbi for every potential order i 2 Ata . We consider a penalty fki , associated with the denial of a potential customer order i 2 Ata . fki accounts for contract penalties and the loss of future prots if the customer switches to a different supplier. To formulate a mixed-integer programming model for the determination of order quantities and due dates we dene the following decision variables: x1 t: quantity of the rst (partial) delivery at point of time t for order i 2 Ata i x2 t: quantity of the second partial delivery at point of time t4zo for order i 2 Ata i i u1 t i & 1; if the due date of the first partial delivery of order i 2 Ata is t 0; else ' ;

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( u2 t i ( vi

1; if the due date of the second partial delivery of order i 2 Ata is t 1; if order i 2 Ata is fulfilled 0; else 0; else ) :

) ;

By tk we denote the additional handling and shipping costs associated with the second delivery. These have to be considered if x2 t40. For simplicity and without loss of generality, we assume a delivery time of zero i for every order i 2 Ata . The decision maker has to solve the following interrelated problems: (1) Determine the potential orders i 2 Ata which will be fullled within the planning horizon; (2) Determine quantities and due dates of partial deliveries for all accepted orders. For solving these problems simultaneously, we can employ the following mixed-integer programming model: max P s.t. x1 tXd u u1 t i i i x1 tpd o u1 t i i i
zi X tzu i
o

X
i2Ata

dbi vi

te X tta 1

lk bt

te X X tta 1 i2Ata

tk u2 t i

X
i2Ata

fki 1 vi

for all i 2 Ata ; for all i 2 Ata ;

t ta 1; . . . ; te ; t ta 1; . . . ; te ;

2 3

x1 t i

te X tzo 1 i

x2 t d o vi i i X
i2Ata

for all i 2 Ata ;

bt1 bt qt

x1 t x2 t; i i

t ta 1; . . . ; te 1;

x2 tpd o d u u2 t for all i 2 Ata ; t ta 1; . . . ; te ; i i i i atpt bt rt ; t ta 1; . . . ; te ; t 2 zu ; zo ; i i

6 7 8 9 10 11 12

u1 t 2 f0; 1g for all i 2 Ata ; i u1 t 0 for all i 2 Ata ; i

tezu ; zo ; i i t 2 zo ; te ; i

u2 t 2 f0; 1g for all i 2 Ata ; i u1 t 0 for all i 2 Ata ; i X

tzu i zo i

tezo ; te ; i

u1 t vi i

for all i 2 Ata ;

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te X tzo i

R. Pibernik / Int. J. Production Economics 9394 (2005) 239252

u2 tp1 i

for all i 2 Ata ;

13

vi 2 f0; 1g for all i 2 Ata ; bt ; atpt X0; t ta 1; . . . ; te :

14 15

The objective function (1) accounts for prots from promised orders, inventory costs for nished goods, additional handling and shipping costs resulting from partial deliveries as well as (intangible) penalties associated with order denial. The model generates an ATP schedule that can be represented by a jAta jTmatrix x. Components of this matrix are the tuples x1 t; x2 t i 2 Ata ; t ta 1; . . . ; te . The models i i objective is to determine an optimal schedule x* which maximizes overall prot P. Constraints (2) and (3) ensure that the quantity of the rst partial delivery is within the given interval d u ; d o . Constraint (4) ensures that the demand d o is met for every accepted order. Balance of nished i i i goods inventory is provided by constraint (5). Constraint (6) links the variables u2 t, indicating the second i partial delivery taking place at point of time t, and x2 t, the quantity of the second partial delivery. The i uncommitted (available-to-promise) quantity of nished goods is provided by constraint (7). Constraints (8)(14) dene the domains of the models integer decision variables. This model can be further customized to meet company-specic demands. We can, e.g. easily include constraints, which ensure that certain customers do not receive any partial deliveries and a latest possible delivery date for the second partial delivery can also be taken into account without complications. Furthermore, a decrease in customer service, resulting from partial deliveries instead of complete deliveries can be incorporated in the model by including additional penalties in the objective function. The model can also be enhanced in order to account for the multi-product case (see Pibernik, 2003), different customer priorities and the strategies considered in case of an anticipated shortage of nished goods. The model is currently being employed for order quantity and due date quoting at Merz Pharmaceuticals. A corresponding Lingo 8.0 le as well as experimental data can be obtained from http://data.dsmserver.net/atp. 4.2. A planning mechanism for real-time AATP based on nished goods inventory Customer requirements and preferences in regard to the response time (see Section 3.2) may necessitate AATP to be operated in real-time mode. Customer requirements mainly depend upon the product subject to order quantity and due date quoting and the relevant distribution channel. When, e.g. products are highly standardized and sold via a web-based retail site, customers may not be willing to accept the (longer) response times associated with AATP operated in batch mode. In this case, the application of real-time AATP is feasible. Employing real-time AATP implies that order quantities and due dates are determined at the time an order or request is received. Order promising then requires a planning mechanism which instantly determines product availability, generates order quantities and due dates and considers alternative fulllment strategies in case of shortages for every incoming order. It should be noted, that processing each order separately, which is inevitable when operating AATP in real-time mode, generally leads to a decrease in performance compared to AATP operated in batch mode. Neither customer priorities nor the consequences of order acceptance on the fulllment of orders arriving at a later point in time can adequately be considered. However, rms may be forced or may be willing to put up with a loss of AATP performance in order to meet customer requirements or enhance customer service in regard to the response time. We will now outline an appropriate planning mechanism for a multi-location real-time AATP based on nished goods inventory and substitute products. Real-time order quantity and due date quoting for a

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Customer order has been received Determine uncommited quantities of product at assigned location Check if order can be fulfilled on the basis of uncommitted quantity
XOR

247

Order can be fulfilled within time window

Order cannot be fulfilled within time window

AND

Determine uncommited quantities at alternative locations

AND

Determine availability of substitute products

Generate feasible fulfillment strategies

XOR

Feasible fulfillmentstrategies available

Assessment of alternative strategies

No feasible fulfillment strategies available

Propose first strategy to customer

XOR

Customer accepts strategy

Customer does not accept strategy Propose second strategy to customer

XOR

Customer accepts strategy

Customer does not accept strategy

XOR

XOR

Confirmation, reservation and recalculation of uncommited quantity

XOR

Order denial

End of AATP run

Fig. 1. Real-time AATP planning mechanism.

single incoming order is illustrated in Fig. 1. The planning mechanism is triggered by the arrival of a prospective customer order i0 . We pre-suppose that every customer is assigned to a denite warehouse location. At rst, the uncommitted quantity nished goods atpt is determined for every point of time t of within the customers delivery time window Z u0 ; Z o0 : Thereupon, it is assessed whether the order can be i i fullled within the customers delivery time window, i.e. if atpt Xd o0 applies for any 2 Zu0 ; Z o0 : If the i i i u o ^ ordered quantity is available, a due date t 2 i0 ; Z i0 is determined. The due can be determined on the basis Z ^ ^ of a specic assignment rule, e.g. t min tjatpt Xd o0 ; t 2 Z u0 ; Zo0 : (earliest date of delivery) or t i i i

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max tjatpt Xd o0 ; t 2 Z u0 ; Z o0 : (latest date of delivery) in order to maintain exibility for the fulllment of i i i orders arriving at a later point in time. After due date determination, the customer is informed accordingly, the required quantity is reserved and the uncommitted quantity of nished goods is recalculated for a subsequent execution of the planning mechanism. In the event of a shortage of nished goods at the assigned warehouse location, availability of the original product as well as substituted products is assessed at alternative locations in the companys distribution network. If the product or substitute is available, feasible fulllment strategies are generated. Determination of alternative strategies has to be dened by a set of rules complying to company-specic conditions, i.e. cost and required time for shipping and handling, unit prot margins for regular and substitute products as well as customer-specic information such as delivery time requirements and the potential acceptance of partial deliveries and substitute products. By this set of rules it must be ensured that only feasible strategies are generated from the companys and the customers viewpoint. If a multiple number of alternative fulllment strategies are available, the planning mechanism has to support their assessment on the basis of detailed information on handling and shipping costs. This assessment then determines the sequence in which the fulllment strategies are proposed to the customer. If the customer accepts the rst approach in this sequence, the corresponding quantities of nished goods are reserved, delivery is conrmed and the uncommitted quantity recalculated as described previously. Otherwise, the second strategy in sequence will be proposed, etc. If the customer does not accept any of the alternative fulllment strategies, the order will be rejected. The depicted planning mechanism can be further customized in order to meet company-specic requirements. These modications can, e.g. include specic rules for identifying and assessing alternative strategies in case of a temporary shortage of nished goods. From the description in Fig. 1 we can derive a formal algorithm for real-time order quantity and due date quoting which can be directly executed by a software application supporting real-time AATP. A corresponding formulation of an algorithm is provided in the appendix of this paper.

5. Advanced ATPs requirements for operations and inventory management The characterization of AATP types in Section 3 and the description of adequate methods in Section 4 facilitate an analysis of the requirements operations and inventory management have to meet in order to successfully quote order quantities and due dates. We will rst focus on AATP based on nished goods inventory for which suitable methods were introduced in the previous section. Thereupon we will also consider additional requirements resulting from active and passive AATP based on supply chain resources. From the AATP methods shown in Section 4 it becomes clear that models and algorithms generating order quantity and due date quotes based on pertinent information concerning customer orders, uncommitted nished goods quantities as well as customer priority and preference, represent the core of AATP planning mechanisms. Consistently, operations and inventory management have to provide the relevant information and data for the models and algorithms applied. Both the batch model and the realtime planning mechanism, introduced in the previous section, clarify the information which has to be provided by operations and inventory management software systems in order to successfully perform order quantity and due date quoting. The relevant data can be divided into data on the availability of nished goods as well as data regarding handling and shipping lead times and costs (see Sections 4.1 and 4.2). In regard to the former, operations management has to provide an exhaustive master schedule, which must specify exactly the type, quantity and date of completion for the products produced within the AATP planning horizon. Inventory management must provide the real inventory on hand throughout the AATP planning horizon and the previously committed quantities of nished goods. Furthermore, handling and

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transportation capacity as well as costs, depending on customer and warehouse locations, need to be on hand. The latter are a pre-requisite for the assessment of alternative fulllment strategies including deliveries from diverse warehouse locations, when multi-location AATP is practiced. Apparently, a detailed process analysis in regard to handling and shipping lead times and costs must precede the implementation of AATP. Applying multi-location AATP also calls for manufacturing resource planning systems and inventory management systems at the incorporated locations, which provide the relevant data on time and in a predened processable format. Employing a real-time AATP further increases the demands on information provision. The relevant data for performing the real-time planning mechanism has to be made available on a continuous basis. The committed quantities of nished goods must instantly be updated after executing the planning mechanism (see Section 4.2). Online access and fast transmission techniques for attaining satisfactory response times and accurate order quantity and due date quotes must be employed. The AATP performance depends signicantly on the quality of the provided information. Essential requirements are the availability and transmission of accurate and error-free data. Also, delivery lead times and costs have to be determined on the basis of a detailed analysis of the warehousing, handling and transportation activities in order to avoid rejection or delayed completion of customer orders due to erroneous information used in the AATP planning mechanism. Besides that, a precise lead time and cost analysis is indispensable for an accurate assessment of alternative fulllment strategies. Clearly, supplying and processing operations and inventory management information is a crucial factor for a successful application of AATP. However, AATP performance also depends strongly on the capability of operations and inventory management to actually fulll the orders, promised on the basis of AATPs calculations. To a great extent, AATPs adherence to due dates is affected by the consistency and stability of the master schedule as well as inventory and transportation planning. Frequent amendments, especially of the master schedule, will ultimately diminish the AATP performance due to discrepancies between the master schedule used for AATP and the implemented master schedule. Subsequent to the requirements specied for AATP based on nished goods, AATP based on supply chain resources needs meticulous information regarding supply chain capacity requirements for each product subject to the AATP planning mechanism being employed. In addition, AATP requires complete information about supply chain resource availability within the AATP planning horizon. It becomes clear that for AATP based on supply chain resources is an extensive integration of manufacturing resource, inventory and transportation planning with the AATP module is essential. Passive AATP on the basis of supply chain resources does not have direct impact on manufacturing resource planning, apart from determining the accepted orders and their due dates. They may, however, reserve supply chain capacity on the basis of the orders accepted. Evidently, the AATP performance is, to a large extent, determined by the ability of production planning and scheduling to meet the due dates given by the AATP schedule. This in turn is subject to the pre-disposition of the AATP model or algorithm engaged to resolve AATP schedules and also, yet again on the quality of the information utilized in the AATP planning mechanism. When utilizing active AATP, a further amalgamation of the AATP with manufacturing resource planning as well as inventory and transportation management is indispensable. Active AATP not only determines due dates and reserves supply chain capacity, but also is, in fact, integrated into master scheduling and material requirements planning. Therefore, active AATP on the basis of supply chain resources is not just simply a stand-alone mechanism for allocating customer orders to nished goods and supply chain resources on the basis of operations and inventory data; it is in fact a vital part of production and inventory planning.

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6. Conclusions The development of models and algorithms for AATP has to be based on well-founded classication of alternative AATP types. On the basis of such classication as well as characterization of additional AATP features, we presented a model for batch AATP and a planning mechanism for real-time AATP based on nished goods inventory, taking alternative fulllment strategies, e.g. AATP with partial deliveries, into account. Both the model and the algorithm can be modied in order to meet company-specic demands and therefore represent a good starting point for further development and implementation of methods supporting AATP. The models and algorithms presented in this paper cover only two generic AATP types. Consequently, further research in the eld of AATP is required with regard to the other AATP types, identied in Section 3. Yet, both the fundamentals of AATP, provided in Section 4 and the requirements for operations management and inventory management, derived in Section 5 can give valuable input for supplementary research and development.

Appendix A. Real-time AATP Algorithm The real-time AATP algorithm generates order quantities and due dates for a single order i0 , which is assigned to a specic warehouse location h 1. In case of a shortage of nished goods at location h 1, the algorithm generates three alternative fulllment strategies depending upon nished product availability:

  

Partial deliveries from warehouse location h 1. Complete delivery from alternative warehouse locations, denoted by h 2; . . . ; H. Complete delivery of pre-dened substitute products, denoted by s 1; . . . ; S, from warehouse locations h 1; . . . ; H.

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