Practical inventory guide
Inventory on hand vs available inventory: meaning and formula.
Inventory on hand is the physical quantity present in a warehouse. Available-to-promise starts from usable stock and subtracts confirmed commitment. Quarantine or blocked stock is physical but not usable, and incoming supply belongs in the projected position rather than on hand.
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The short answer
This distinction changes the decision you can safely make.
Inventory on hand is the physical quantity present in a warehouse. Available-to-promise starts from usable stock and subtracts confirmed commitment. Quarantine or blocked stock is physical but not usable, and incoming supply belongs in the projected position rather than on hand.
Worked example
Use exact units and keep each quantity in the right category.
A warehouse holds 100 pieces: 8 are quarantined, so 92 are usable. Confirmed sales commitments total 35, including 20 already allocated. On hand is 100; available-to-promise is 92 − 35 = 57. Free-to-pick is 92 − 20 = 72. The allocated 20 is not subtracted twice.
Decision table
Check the facts before choosing an action.
| Quantity | Calculation | Use |
|---|---|---|
| On hand | 100 | What is physically present |
| Usable | 100 − 8 = 92 | What can currently be used |
| Available to promise | 92 − 35 = 57 | What new demand can be promised |
| Free to pick | 92 − 20 = 72 | What is not reserved for another document |
Common mistakes
Avoid shortcuts that create confusion later.
- Calling all physical stock available
- Subtracting allocated and committed from the same formula
- Adding expected supply to on hand
- Hiding negative available-to-promise when backorders exist
How KnownStock handles it
The product keeps the explanation with the number.
KnownStock calculates each quantity from the same confirmed physical, demand and supply records. The availability page keeps physical state, commitment, allocation and incoming supply separate.
Ready for a verifiable first movement
Start with one item, one warehouse and one quantity you can explain.
Create a workspace without a card, add your first item and warehouse, then follow the practical manual at your own pace.