Defining Reservation and Backorder Rules

This chapter provides an overview of reservation and backorder rules and discusses how to:

Set up reservation and backorder rules.
Apply reservation and backorder rules.
Default rules to sales orders.

Understanding the Reservation, Backorder, and Shortage Processes

Reservation and backorder rules can automate many of the rules that required manual decisions. You can configure a set of rules at the line and order level to define at what point the demand line or order is ready to move forward in the fulfillment process. The rules are applied at the reservation and shipping stages of fulfillment.

Reservations

The default setting of the Reserve Materials process and online reservations processes is to soft-reserve partial quantities for a demand line and hold the line in the unfulfilled state. The demand line can go through the Reserve Materials process multiple times and could soft-reserve more stock each time. The demand line will be set to the releasable state when the full quantity is soft-reserved and it is within reservation lead days. This default setting can be overridden by using:

Reservation and backorder rules.
The check boxes for Partial Qtys Can Ship, Cancel Backorder, and Partial Orders Can Ship.

Use the reservation rules to tell the system when to release a demand line or order to the releasable state. Using reservation rules, the system can:

Set the demand line or order to the releasable state.
Notify the proper user of an issue needing manual attention (such as a shortage situation).
Not reserve or promise available inventory stock to the demand line based on the rule. This changes the default setting of the reservation process.

Based on the criteria on the reservation rule, a demand line could be put to the releasable state even if all or part of the requested quantity cannot be reserved; for example, if the rule says Set to Releasable when 90 percent of the line is reserved. If this case, a shortage would be created, then the backorder rule would determine what should be done about the shortage. The reservation rules determine the demand line's shortage quantity to be used by the backorder rules.

Based on the criteria that you establish on the backorder rule, the Reserve Materials process or the online reservation processes can:

Create a backorder.
Cancel a backorder.
Hold the demand line and notify the proper user in order to let the user make a manual backorder decision.
Release the shortage to the releasable state. This essentially lets the shortage flow downstream so that the backorder decision can be made at shipping time rather than during the reservations process

The reservation and backorder rules for the reservation stage of fulfillment are invoked by the following:

The Reserve Materials process.
The Shortage Workbench.
The online reservation processes for sales orders in PeopleSoft Order Management.
The online reservations for stock requests using the Create/Update Stock Request component.

Shipping

Backorder rules are also be used at shipping time to determine what to do with shortages that were released to picking and shipping but by shipping time still cannot be fulfilled. Based on the criteria that you establish on the backorder rule, the shipping processes can:

Create a backorder.
Cancel a backorder.

Understanding Backorders

Backorders can be created, based on the check boxes or the backorder rules, by the Reserve Materials process, the Shipping/Issues component, the Shortage Workbench, the Picking Confirmation process (for autoship orders), and shipments processed by the fulfillment engine. Backorders are also created for the unallocated portion of partially lot-allocated sales order lines.

If a backorder needs to be created for just part of a demand line then the demand line is split. The backordering process adds a demand line for the unfulfilled quantity; the only change in the demand key for the second demand line is the demand line number (line number 2).

The following check boxes on the Setup Fulfillment and Setup Item Fulfillment pages, still apply to backorders created by backorder rules:

Auto Backorder Approval

Select to enable the Reserve Materials process to process backorders without manual approval. This option enables the Reserve Materials process to create reservations for the backordered demand when sufficient stock is available. If you do not select this option, the system creates backorder demand lines with a status of Backorder, and you must approve them manually on the Update Unreserved Orders page or the Shortage Workbench before making a reservation.

Create Adhoc Requisitions

Select to enable the Reserve Materials process to create an ad hoc replenishment request when insufficient stock is available to fulfill the demand line. Ad hoc replenishment requests are also created by the Shortage Workbench if a previously fully reserved demand line is unreserved and the first backorder line is being created. Ad hoc replenishment requests can also be created by the Shipping/Issues component when short shipping a non-backorder demand line. Ad hoc replenishment requests are created only if a backorder is created. PeopleSoft Purchasing or a third-party purchasing application then processes the ad hoc replenishment request. If you do not select this check box, backorders do not create adhoc replenishment requests.

Setting Up Reservation and Backorder Rules

Reservation and backorder rules are used by the Reserve Materials process and online reservations to determine when the demand line of an order is ready to be moved downstream to the releasable state. Backorder rules are also used at shipping time to determine what to do with shortages that cannot be fulfilled. The reservation and backorder rules are:

Line-Level Reservation Rule	Defines the specific criteria that must be satisfied by this individual demand line before the demand line is moved to the releasable state. For example, a line reservation rule might be that the reserved quantity must equal or exceed 90 percent of the requested quantity on the line before it is set to the releasable state.
Line Reservation-Backorder	Defines the specific criteria that must be satisfied by a previously backordered demand line before the demand line is moved to the releasable state. For example, a line backorder rule might be that the reserved quantity for an already backordered line must equal or exceed 100 percent of the requested quantity before it is set to the releasable state. If no line backorder rule exists then the system used the line reservation rule for previously backordered lines.
Order-Level Reservation Rule	Defines the specific criteria that must be satisfied by the entire order or grouping that this individual demand line is in, before the demand line is moved to the releasable state. For example, an order reservation rule might be that all the lines in an order must reserve 100 percent of their reserved quantity before the order can move downstream.
Backorder Rule	There are two parts to this rule: Backorder rule at release: Determines, if there is insufficient available quantity to reserve, what should be done about the shortage. The rule can create a backorder, cancel a backorder, send the shortage downstream to be handled in a later fulfillment step, or hold the demand line back and notify an individual that a manual backorder decision needs to be made through email, message dashboard or workflow. Backorder rule at shipping: Once a shortage (Release as Shortage option on the Backorder Rule-Release page) has been sent downstream to shipping if there is still no quantities to ship, then this rule determines what happens to the demand line.

During reservations, the rules are evaluated in the following order:

Line-level reservation rules.
Line Reservation-Backorder rules.
Order-level reservation rules.

Once a demand line has passed the set releasable criteria for the line-level reservation rule, the line must also pass the set releasable criteria for the order-level reservation rule.
Backorder rules at release.

Once a demand line has passed the set releasable criteria of both the line-level reservation rule and the order-level reservation rule, the backorder rule at release determines how any unreserved quantities (shortages) are handled.

Note. If there are no reservation and backorder rules established for the demand line, then the system uses the Partial Qtys Can Ship, Cancel Backorder, and Partial Orders Can Ship check boxes to determine releases and backorders.

Common Elements Used in This Section

Rule Code

Displays the user-defined code that uniquely identifies this rule.

Rule Type

Select the type of rule to add, change, or view. Options are:

Backorder Rule: Rules that determine what happens with backorders / shortages when a line is released downstream.
Line Level Reservation Rule: Rules that determine when a line is ready to move forward in the fulfillment process to the Releasable state.
Order Level Reservation Rule: Rules that determine when an order or unit of work is ready to move forward in the fulfillment process to the Releasable state.

Description

Displays the user-defined description of this rule. This field is 32 characters long.

Pages Used to Set Up Reservation and Backorder Rules

Page Name	Object Name	Navigation	Usage
Reservation/Backorder Rules-Reserve Line	IN_FL_RULE_SETUP4	Inventory, Fulfill Stock Orders, Fulfillment Rules, Reservation/Backorder Rules Select a Rule Type of Line Level Reservation Rule.	Add, change, or review line-level reservation rules and line reservation-backorder rules. These rules define the specific criteria that must be satisfied by an individual demand line before the demand line is moved to the releasable state.
Reservation/Backorder Rules-Reserve Order	IN_FL_RULE_SETUP5	Inventory, Fulfill Stock Orders, Fulfillment Rules, Reservation/Backorder Rules Select a Rule Type of Order Level Reservation Rule.	Add, change, or review order-level reservation rules. These rules define the specific criteria that must be satisfied by the entire order or grouping of demand lines before the demand lines are moved to the releasable state.
Backorder Rule-Release	IN_FL_RULE_SETUPBR	Inventory, Fulfill Stock Orders, Fulfillment Rules, Reservation/Backorder Rules Select a Rule Type of Backorder Rule. Select the Release tab.	Add, change, or review the backorder rule at release. Once a demand line has passed the set releasable criteria of both the line-level reservation rule and the order-level reservation rule, the backorder rule at release determines how any unreserved quantities are handed.
Backorder Rule-Shipping	IN_FL_RULE_SETUPBS	Inventory, Fulfill Stock Orders, Fulfillment Rules, Reservation/Backorder Rules Select a Rule Type of Backorder Rule. Select the Shipping tab.	Add, change, or review the backorder rule at shipping. Once a shortage (Release as Shortage option on the Backorder Rule-Release page) has been sent downstream to shipping if there is still no quantities to ship, then this rule determines what happens to the demand line.

Defining Line-Level Reservation Rules and Line Reservation- Backorder Rules

Access the Reservation/Backorder Rules-Reserve Line page.

Defines the specific criteria that must be satisfied by an individual demand line before the demand line is moved to the releasable state. For example, a line reservation rule might be that the reserved quantity must equal or exceed 90 percent of the requested quantity on the line before it is set to the releasable state.

This page defines reservation rules to be applied as line-level reservation rules and line reservation-backorder rules. Whether the rule defined here is applied to a backordered demand line or not, depends on where you add this rule code. The rule code defined here can be applied to the Line Reservation Rule field or the Line Reservation-Backorder field on the Setup Fulfillment-Reservation page or the Create/Update Stock Request-Reservation /Backorder Rules page.

Reservation Actions

Select the action to be performed when the criteria are met by the demand line. Within the Reservation Rules and Actions group box, you can select the Add button just below the title bar and add additional action combinations for this Rule Code. Each combination is evaluated independently.

Notify when	Select to send a notification to a specific user or role when the criteria specified in the rule is met. Use the Errors and Warnings Framework to define which user or user role to notify and how the notification should be delivered (Workflow, email, or Message Dashboard). For example you might wish to notify the warehouse manager if a demand line has reached the late ship date without being fully reserved.
Set releasable when	Select to change the state of the demand line from Unfulfilled to Releasable when the criteria specified in the rule are met. This action releases the demand line for fulfillment processing. If you use line-level (or order level) reservation rules, it is required that one rule use the Set Releasable action.
Do not make reservation when	Select to not reserve inventory stock for this demand line when the criteria specified in the rule are met. The system default is to reserve stock for the demand line even if we cannot yet release the line based on the Set Releasable action. The Do Not Make Reservation action prevents reserving inventory stock when conditions are not yet optimal. For example, you could define a rule to not make reservations if today's date is earlier than the Early Ship Date and the percentage of reservable quantity is less than 90 percent. This prevents stock from being tied up if the condition is not met.
Message Text	If you have selected the action of Notify, enter a specific message to be included in the notification.

Note. The actions of Set Releasable and Do Not Make Reservationare mutually exclusive since the system always holds the reservation when the releasable action is taken. The Notify action can be used in combination with the other actions. For example, if you release the demand line, then you might want to notify a customer service representative or other individual.

Rule Sets

Within the Rule Sets group box, you can define one or more List of Criteria group boxes for each rule action by selecting the Add button just below the Rule Set title bar. Each List of Criteria group box is evaluated as an OR condition. For example, if you add two List of Criteria group boxes, the action is taken if criteria 1 or criteria 2 are met. Within an individual List of Criteria group box the separate rows are evaluated as AND conditions; both rows must be met to initiate the action.

Field to Compare	Select the type of comparison to be made. For line-level reservation rules, the options are: Date: Compare today's date to a date on the demand line. A field displays at the end of the row to enter the demand line dates of; Arrival Date, Early Ship Date, Late Ship Date, or Scheduled Ship Date. Quantity Reserved: Compare the quantity that has been soft-reserved on this demand line to a percentage of the requested quantity or a static value expressed in the item's standard UOM. For example, if the reserved quantity is greater than 90 percent of the requested quantity and/or the reserve quantity is greater than 3 units of the item in its standard UOM.
Comparison Operator	Select how the value in the Field to Compare field should be compared to the demand line. If Date is in the Field to Compare field, then your choices are Earlier Than, Earlier or Equal To, Equals, Later Than, or Later or Equal To. If Quantity Reserved is in the Field to Compare field, then your choices are Equal To, Greater or Equal, Greater Than, Less Than, or Less Than or Equal.
Operand	Enter a numeric value (days, percentage, or number of units) for the comparison.
Compare String	Select the compare value. If Date is in the Field to Compare field, then your choices are Days After or Days Before. If Quantity Reserved is in the Field to Compare field, then your choices are Units in Standard UOM or Percentage of Requested.
Delete This Rule Set	Select this link to remove the rule set from this rule.

For example, the above page shot displays a rule that enables you to release a demand line if it is 3 days before the scheduled ship date and at least 90 percent of the quantity has been reserved or if it is past the scheduled ship date then release whatever quantity is reserved.

Note. If the Use Closure Calendar check box is selected on the Setup Fulfillment- Reservation page, then the system takes closure dates into consideration when comparing today's date to the date on the demand line.

Defining Order-Level Reservation Rules

Access the Reservation/Backorder Rules-Reserve Order page.

Defines the specific criteria that must be satisfied by an entire order or grouping of demand lines (unit of work) before the individual demand lines are moved to the releasable state. For example, an order-level reservation rule might be that all the lines in an order must reserve 100 percent of their reserved quantity before the order can move downstream. Order-level reservation rules are evaluated after line-level reservation rules. A demand line must pass both rules to be set the releasable state.

Reservation Actions

Select the action to be performed when the criteria are met by the unit of work. Within the Reservation Rules and Actions group box, you can select the Add button just below the title bar and add additional action combinations for this Rule Code. Each combination is evaluated independently.

Notify when

Select to send a notification to a specific user or role when the criteria specified in the rule is met. Use the Errors and Warnings Framework to define which user or user role to notify and how the notification should be delivered (Workflow, email, or Message Dashboard).

For example you might wish to notify the warehouse manager if an order has reached the late ship date without all lines in the order being fully reserved.

Set releasable when

Select to change the state of the demand lines in the order or unit of work from Unfulfilled to Releasable when the criteria specified in the rule are met. This action releases the demand lines for fulfillment processing. If you use line level or order-level reservation rules, it is required that one rule use the Set Releasable action.

Message Text

If you have selected the action of Notify, enter a specific message to be included in the notification.

Rule Sets

Field to Compare	Select the type of comparison to be made. For line-level reservation rules, the options are: Date: Compare today's date to a date on the order or unit of work. Select Days After or Days Before in the Compare String field. A field displays at the end of the row to enter the demand line dates of; Arrival Date, Early Ship Date, Late Ship Date, or Scheduled Ship Date. Note. If the Use Closure Calendar check box is selected on the Setup Fulfillment- Reservation page, then the system takes closure dates into consideration when comparing today's date to the date on the demand line. Order Volume: Compare the total volume of all reserved items in the order or unit of work. This comparison can: Compare the total volume that has been reserved or promised to the total volume that has been requests by entering Percentage of Requested Volume in the Compare String field. For example, releasing the order when 90 percent of the total cubic feet of this order or unit of work has been reserved. Compare the total volume that has been reserved to a static volume by entering Units in Standard Volume UOM in the Compare String field. For example, releasing the order when 10,000 cubic feet of stock has been reserved for this order or unit of work. Note. Volume calculations are expressed in the unit of measure entered in the Volume UOM field of the Setup Fulfillment page. Order Weight: Compare the total weight of all reserved or promised items in the order or unit of work. This comparison can: Compare the total weight that has been reserved to the total weight that has been requests by entering Percentage of Requested Weight in the Compare String field. For example, releasing the order when 90 percent of the total weight of this order or unit of work has been reserved. Compare the total weight that has been reserved to a static weight by entering Units in Standard Weight UOM in the Compare String field. For example, release the order if the reserved weight greater than 500 LBS. Note. Weight calculations are expressed in the unit of measure entered in the Weight UOM field of the Setup Fulfillment page. Percentage Fill: Compares in two ways: Compare the number of reserved lines to the total number of lines on the order or unit of work by entering Percentage Fill by Line Count in the Compare String field. For example, release the order if 95 percent of all the order lines have reserved quantities. Compare the number of units reserved for all lines to the total number of units in all the lines on the order or unit of work by entering Percentage Fill by Total Units in the Compare String field. This comparison is performed regardless of the unit of measure. For example, if there are two demand lines within the unit of work; the first has a requested quantity of 20 EA and reserved quantity of 8 EA, and the second demand line has a requested quantity of 5 boxes and reserved quantity of 2 boxes, then the total units reserved is 10 and the total units requested is 25; therefore, the fill percentage would be 40 percent.
Comparison Operator	Select how the value in the Field to Compare field should be compared to the demand line. If Date is in the Field to Compare field, then your choices are Earlier Than, Earlier or Equal To, Equals, Later Than, or Later or Equal To. If Order Volume, Order Weight, or Percentage Fill is in the Field to Compare field, then your choices are Equal To, Greater or Equal, Greater Than, Less Than, or Less Than or Equal.
Operand	Enter a numeric value (days, percentage, or number of units) for the comparison.
Delete This Rule Set	Select this link to remove the rule set from this rule.

Defining Backorder Rules for the Release Step

Access the Backorder Rule-Release page.

Once a demand line has passed the set releasable criteria of both the line-level reservation rule and the order-level reservation rule, the backorder rule at release determines how any unreserved quantities are handed.

Release Backorder Action

Select the action to be performed for shortage demand lines being set to releasable status.

Create Backorder	Select to create a backorder for the shortage quantity. If the entire demand line cannot be reserved then the demand line is backordered. If the demand line can be partially reserved, then the demand line is split into two demand lines. For example, if you have ordered 100 units of an item but only 80 units are available, the system creates a second demand line for the order to put 20 units on backorder. Demand line number 1, for 80 items, is moved into the releasable state where it can be picked and shipped. Demand line number 2, for 20 units, remains in the unfulfilled state until additional quantity becomes available. If you later put away 25 units of the ordered item, the second demand line is be reserved and set to the releasable state as long as the backordered demand line passes the line-level and order-level reservation rules.
Release as Shortage	Select to enable the demand line with a shortage to flow downstream through the fulfillment process. The shortage demand line is visible on the order release pick plan and shipping pages, enabling the warehouse to fulfill the shortage when stock becomes available. If the shortage cannot be fulfilled, then, at shipping time, the backorder rule for shipping creates a backorder or cancels a backorder for this demand line.
Hold and Notify	Select to hold the demand line with a shortage in the unfulfilled state and send a notification to the user that a backorder decision needs to be made. The demand line is not picked back up again by the Reserve Materials process or online reservations. The demand line stays on hold until a manual decision to release or backorder is made using the Shortage Workbench. Use the Errors and Warnings Framework to define which user or user role to notify and how the notification should be delivered (Workflow, email, or Message Dashboard). The message text will read A backorder decision is required for this demand line and includes the demand key information.
Cancel Backorder	Select to cancel a backorder for the shortage quantity. Cancel backorder has two options: Always: Cancel the backorder under all conditions. When: Cancel the backorder when the criteria in the Backorder Conditions group box are met and if the conditions are not met, what action should be taken (create backorder, notify, or release shortage).

Backorder Conditions

If you have selected Cancel Backorder using the When option, then enter the criteria to determine when the Cancel Backorder action should be taken.

Field to Compare	Shortage Quantity: Compare the shortage quantity on the demand line to a percentage of the requested quantity or a static value expressed in the item's standard UOM. For example, if the shortage quantity is greater than 90 percent of the requested quantity and/or the shortage quantity is greater than 3 units of the item in its standard UOM.
When condition not met	Select the action that should be taken when a shortage demand line does not meet the criteria to cancel backorder.

Defining Backorder Rules for the Shipping Step

Access the Backorder Rule-Shipping page.

Once a shortage (Release as Shortage option on the Backorder Rule-Release page) has been sent downstream to shipping if there is still no quantities to ship, then this rule determines what happens to the demand line.

Ship Backorder Action

Select the action to be performed for shortage demand lines at shipping.

Create Backorder

Select to create a backorder for the shortage quantity. If the entire demand line cannot be shipped then the demand line is backordered. If a partial quantity on the demand line can be shipped, then the demand line is split into two demand lines.

Cancel Backorder

Select to cancel a backorder for the shortage quantity. Cancel backorder has two options:

Always: Cancel the backorder under all conditions.
When: Cancel the backorder when the criteria in the Summary group box are met. If the criteria are not met, then create a backorder.

Summary

Field to Compare

Shortage Quantity: Compare the shortage quantity on the demand line to a percentage of the requested quantity or a static value expressed in the item's standard UOM. For example, if the shortage quantity is less than 1 percent of the requested quantity and/or the shortage quantity is less than 3 units of the item in its standard UOM.

Applying Reservation and Backorder Rules

In this section, we discuss:

Apply rules to different types of items.
Default rules to material stock requests.

Applying Rules to Different Types of Items

Reservation and backorder rules are applied differently to soft-reserve, non-soft-reserve, ATP, and lot-allocated items. There are also special considerations for product kits for PeopleSoft Order Management and demand lines that have been pegged.

Soft Reserve Items

Reservation and backorder rules are applied to soft-reserve items. The demand line must pass the rule criteria to be set to the releasable state.

Non-Soft Reserve, Non-ATP Items

For non-soft-reserve items that are not ATP items, the setting in the Non-Reserved State field on the Setup Fulfillment page determines how the reservation and backorder rules are applied.

If the field is set to Unfulfilled, then the reservation and backorder rules are applied. However, since no quantity is soft-reserved, the quantity and percentage checks of the reservation rules are not applied. The date checks on the line-level reservation rule and any order-level reservation rules are applied and the demand line must pass the criteria to be set to the releasable state.
If the field is set to Releasable, then the reservation and backorder-release rules are not applied. The demand line has already moved past the unfulfilled state; however, the backorder-shipping rules are applied.

ATP Items

Reservation and backorder rules are applied to ATP items. The demand line must pass the criteria to be set to the releasable state. However, the promised quantity of the demand line is used instead of the reserved quantity (since an ATP item is not soft-reserved) to compare to the quantity and percentage checks of the rules.

If the ATP item is within the ATP lead days but outside the reservation lead days, then the system promises the quantity only if all of the requested quantity is available. If the item is within the reservation lead days, then the system can promise partial quantities, but a backorder decision is not made until the demand line passes any line-level and order-level reservation rules. Each time the Reserve Materials process or online processes are run for the demand line, the system will again check to see if it can promise the unpromised portion of the demand line but the system does not reevaluate the whole requested quantity.

Lot-Allocated Items

Reservation and backorder rules do not apply to lot-allocated items. Partial lot allocations result in splitting the demand line; lot-allocating one demand line and no allocated quantity on the second demand line. Both demand lines are left in the unfulfilled state.

Product Kits

For product kits from PeopleSoft Order Management, the reservation and backorder rules are determined based on Order Management's backorder/shortage engine. The rules are defaulted to the product kit and then default to the individual components that are sent to PeopleSoft Inventory for order fulfillment. During order fulfillment:

If the Release Multiple Kits check box on the Setup Fulfillment page (inventory business unit level) is not selected, then the system applies the reservation and backorder rules to each individual component.
If the Release Multiple Kits check box on the Setup Fulfillment page (inventory business unit level) is selected, then only multiples of complete kits are set to the releasable state. For example; suppose that product kit X consists of 2 units of item A and 1 unit of item B. The demand line requests a quantity of 10 product kit X. Available stock includes 22 units of item A and 4 units of item B. The system can reserve 20 units of item A and 4 units of item B, then 8 units of item A and 4 units of item B (4 complete kits) are set to releasable status and passed downstream for picking. For any quantities initially reserved, promised, or lot-allocated but could not be set to releasable, in this case, 12 units of item A, the system follows the reservation rules to determine if a notification should be sent and/or the items be unreserved, unpromised, or unallocated, but does not allow the lines to be set to releasable.

Defaulting Rules to Material Stock Requests

For material stock requests, the reservation and backorder rules can be manually entered on the demand line or default to the demand line from the Setup Item Fulfillment-Reservation / Backorder Rules page (the item/business unit level) or the Setup Fulfillment-Reservation page (business unit level).

If there are no reservation and backorder rules established for the demand line, then the system uses the Partial Qtys Can Ship, Cancel Backorder, and Partial Orders Can Ship check boxes located on the Setup Item Fulfillment page or the Setup Fulfillment page to determine releases and backorders. Demand lines with no reservation rules refer to the Partial Qtys Can Ship check box. Demand lines with no backorder rules refer to the Cancel Backorder check box.

Partial Qtys Can Ship

Select this check box to enable the system to reserve part of the requested quantity for a demand line and set to releasable state when it is within the reservation lead days. The system splits the demand line, releases the reserved quantity, and backorders the shortage.

If this check box is not selected, then the system does not set the demand line to releasable state unless the entire requested quantity can be reserved. If the demand line is within the reservation lead days and the entire requested quantity cannot be reserved, then the entire demand line is backordered.

Note. This check box has uses beyond reservations; it is also checked at picking and shipping time.

Cancel Backorder

Select this check box to cancel any backorder created by the Reserve Materials process or the online reservations processes.

The Partial Quantities Can Ship and Cancel Backorder check boxes work together to determine the reservation and backorder decisions. The following actions are taken depending on the settings:

If the Cancel Backorder check box is not selected and the Partial Quantities Can Ship check box is selected, then partial quantities are reserved and a backorder created for the shortage.
If the Cancel Backorder check box is not selected and the Partial Quantities Can Ship check box is not selected, then either the full requested quantity is reserved and released or no quantity reserved and released. A backorder is created for the full quantity if no quantity is reserved
If the Cancel Backorder check box is selected and the Partial Quantities Can Ship check box is selected, then a partial quantity is reserved and the backorder is canceled for the shortage.
If the Cancel Backorder check box is selected and the Partial Quantities Can Ship check box is not selected, then full quantity is canceled if it is not available to be reserved.

At shipping time, if the Partial Orders check box on the Setup Fulfillment page is not selected, then the shipping processes do not allow any of the lines on the order or unit of work to be shipped unless all of the lines within the order or unit of work can be shipped.

Defaulting Rules to Sales Orders

For sales orders from PeopleSoft Order Management, an arbitration plan is defined to determine the default hierarchy used by the reservation/backorder engine (within PeopleSoft Order Management) to assign rules to the lines of a sales order. The reservation and backorder rule defaults can be defined at multiple combinations such as customer ID, customer ID/product ID, customer ID/item ID, and so on. For example, look for rules at customer ID/product ID combination first before customer ID. The Arbitration Plan ID is associated with the ship-from business unit for the sales order schedule line. This field is defined on the Inventory Definition-Business Unit Definition page.

To define reservation backorder arbitration plans and rules, use the Reservation/Backorder components under the Set Up Financials/Supply Chain menu.

Take the following steps to set up reservation backorder, arbitration plans and rules:

Establish the arbitration plans on the Arbitration Plan page.
1. Use the Arbitration Plan page to define the arbitration plan.
2. Define the keys that the arbitration plan will use on the Key Fields page.
Define the rules.
1. Select the key fields from the arbitration plan and assign values.
2. Set up the breaks for reservation backorders on the Reservation Backorder Rule Details page.

This section discusses how to:

Establish reservation backorder arbitration plans.
Identify key fields for reservations and backorders.
Create reservations and backorder defaults.
Select reservation backorder rule keys.
Establish reservations and backorder details.

Reservation and Backorder Rule Prerequisites

Before the system can consider reservation backorder arbitration plans and rules, complete the following steps:

Establish default reservation backorder rules and rules codes from the Fulfillment Rules menu.
Establish customer groups, product groups, and region codes for reservation backorders if you are using these values as keys on the arbitration plan.
Assign the arbitration plan to the Inventory Business Unit Definition page.

Pages Used to Default Rules to Sales Orders

Page Name	Object Name	Navigation	Usage
Arbitration Plan	TRFT_RULE_CD	Set Up Financials/Supply Chain, Common Definitions, Fulfillment Definitions, Reservation/Backorder Defaults	Establish arbitration plans for reservation and backorder defaults. The arbitration plan determines the sequence in which the system searches for and applies arbitration plans that match to establish reservation and backorder default.
Key Fields	TRFT_KEY_FLD_SEC	Click the Rule Keys link on the Arbitration Plan page.	Identify key fields for reservations and backorders that determines a match for the arbitration plan.
Reservation Backorder Rule Keys and Defaults	TRFT_SET	Set Up Financials/Supply Chain, Common Definitions, Fulfillment Definitions, Reservation/Backorder Defaults, Rule Defaults	Set up values for the fields that you selected on the Arbitration Plan page.
Select Key Fields	TRFT_RL_SEQ_SEC	Click the Select Rules Keys link on the Reservation Backorder Rule Keys page.	Select a rule sequence for reservation and backorder rules.
Reservation Backorder Rule Details	TRFT_TR_BREAK	Click the Assign Reservation Backorder Defaults link on the Reservation Backorder Rule Keys and Defaults page.	Establish reservation backorder rule details.

Establishing Reservation Backorder Arbitration Plans

Access the Arbitration Plan page.

Default	To establish a default arbitration plan, select the check box. After selecting this option and saving the default arbitration plan, the check box no longer appears on this page for other arbitration plans. The system uses the default plan when there isn't an arbitration plan assigned to the PeopleSoft Inventory Business Unit.
Sequence	Displays the sequence number which is automatically generated by the system. You can change this number as long as you do not select a number that has already been used. The sequence number indicates the order in which the system searches the reservation and backorder arbitration plans.
Rule Keys	Click to access the Select Key Fields page where you can select the combination of elements that determines a match. The keys that you select display in the Key Set group box.

Identifying Key Fields for Reservation and Backorders

Access the Key Fields page.

Select any number of fields from the available options. The system searches the rules of the arbitration plan for reservations and backorders and applies the rules that match the combination of values that you select.

The key fields available for selection on the arbitration plan are:

Customer group
Order group
Product ID
Product group
Region code
Shipping priority code
Ship to customer
Sold to customer
Source code

Creating Reservation Backorder Rule Keys and Defaults

Access the Reservation Backorder Rule Keys and Defaults page.

You must first establish an arbitration plan before you can create a rule.

Note. If you are adding a new rule, you will first be directed to the Select Key Fields to add key fields to the rule.

Copy Rule	Use to copy an existing rule to a new rule. In Add mode, click the button after adding a rule sequence and Rule ID. The option is unavailable for selection after you copy a rule.
Select Key Fields	Click the link to access the Select Key Fields page. Once they are selected, you can add the value for the key fields in the Key Fields group box.
Values	Use to assign value for the fields you selected on the Select Key Fields page.
Assign Reservation Backorder Defaults	Click the link to access the Reservation Backorder Rule Details page.

Selecting Reservation Backorders Rule Keys

Access the Select Key Fields page.

Select

Use the check box to select the sequence that contains the key fields that you want to define for the rule.

Establishing Reservation and Backorder Rule Details

Access the Reservation Backorder Rule Details page.

Start Date, End Date	Enter the dates for the rule.
Status	Choose whether the rule can be Active or Inactive. Only rows with an Active status can be used.
Default Rule	The reservation and backorder rules options are: Backorder Line Reserve Line Backorder Rule Line Reservation Rule Order Reservation Rule:.
Rule Code	Add a rule code for the reservation and backorder rule.

Note. The default rules and rule codes are defined in the Fulfillment Rules menu.