{"id":4565,"date":"2023-02-22T06:00:00","date_gmt":"2023-02-22T06:00:00","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/available-to-promise\/"},"modified":"2025-11-17T22:41:59","modified_gmt":"2025-11-17T22:41:59","slug":"available-to-promise","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/available-to-promise\/","title":{"rendered":"Available-to-Promise (ATP) Inventory Guide & Solutions"},"content":{"rendered":"\n

Table of Contents<\/p>

** Minutes<\/p><\/div><\/div>\n

What is available-to-promise (ATP) inventory?<\/a><\/p>\n\n\n\n

Available-to-promise inventory formula and calculation<\/a><\/p>\n\n\n\n

ATP supply chain implementation: pull-based vs. push-based<\/a><\/p>\n\n\n\n

Available-to-promise inventory tips <\/a><\/p>\n\n\n\n

Conclusion <\/a><\/p>\n\n\n\n

Available-to-promise inventory FAQs<\/a><\/p>\n<\/div>\n\n\n\n

<\/span>

Key Takeaways<\/h2><\/span><\/div>
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1<\/p><\/div>

Available-to-promise (ATP) inventory is a metric that helps businesses forecast future stock availability to meet customer orders and prevent stockouts.<\/p><\/div><\/div>\n\n\n\n

2<\/p><\/div>

ATP is calculated using the formula: ATP = (Quantity On Hand + Supply Inventory) \u2013 Demand, allowing businesses to allocate inventory efficiently.<\/p><\/div><\/div>\n\n\n\n

3<\/p><\/div>

ATP differs from other inventory metrics like available-to-sell and safety stock, focusing on future availability rather than current stock or emergency reserves.<\/p><\/div><\/div>\n\n\n\n

4<\/p><\/div>

Implementing ATP tracking with inventory management systems can enhance visibility, reduce errors, and support better business decisions across sales channels.<\/p><\/div><\/div>\n<\/div><\/div>\n\n\n\n

Let’s say a furniture company, Sunshine Decor, sells via multiple channels: online, via wholesale, and brick-and-mortar stores. <\/p>\n\n\n\n

To meet customer expectations and to prevent stockouts and backorders, the retailer must regularly and accurately estimate how much stock it will have on hand in a given period of time. <\/p>\n\n\n\n

There are several inventory KPIs<\/a> and metrics a company can track, but if Sunshine Decor wanted to specifically forecast an amount of stock that is currently available for future orders only, then it would need to calculate what’s known as “available-to-promise (ATP)” inventory.<\/p>\n\n\n\n

In this article, we discuss what ATP is, how to calculate it, and how to easily monitor stock availability<\/a> across channels.<\/p>\n\n\n\n

What is available-to-promise (ATP) inventory?<\/h2>\n\n\n\n

“Available-to-promise (ATP)” inventory refers to inventory levels<\/a> that a business can guarantee to have in stock to process future customer orders. <\/p>\n\n\n\n

By calculating ATP, a direct-to-consumer<\/a> (DTC) brand can monitor inventory more efficiently and reduce stockouts and backorders while also optimising warehouse capacity<\/a>. <\/p>\n\n\n\n

It’s easy to confuse ATP inventory with other related inventory terms: available to sell, capable to promise, and safety stock<\/a>. <\/p>\n\n\n\n

Available to promise vs. available to sell<\/h3>\n\n\n\n

It’s important to note that available-to-promise inventory is different than “available to sell” inventory, which is another common inventory term. <\/p>\n\n\n\n

Available-to-sell inventory refers to how many items are available currently for customers to purchase.<\/p>\n\n\n\n

The main difference is ATP inventory is a future-focused inventory metric (however, it can put current sales orders into consideration, more on that later). <\/p>\n\n\n\n

Unlike ATP, available-to-sell inventory includes finished goods<\/a> that are ready to sell instantly. <\/p>\n\n\n\n

Available to promise vs. capable to promise <\/h3>\n\n\n\n

While ATP is a demand forecasting<\/a> term, “capable-to-promise (CTP)” is a more complex inventory metric that considers multiple parts of the ecommerce supply chain<\/a>, including production and resource capacity.<\/p>\n\n\n\n

ATP takes into account inventory on hand, while CTP considers inbound purchase receipts, supplier lead times, alternative sourcing options, and availability of raw materials and labour. <\/p>\n\n\n\n

CPT is a great inventory metric to track if a business was thinking about expanding and needed to understand if it’s possible to fulfil a higher level of sales without backorders<\/a> or stockouts<\/a>. But it’s not always necessary, and ATP is simpler to calculate. <\/p>\n\n\n\n

Available to promise vs. safety stock <\/h3>\n\n\n\n

Safety stock<\/a> is the extra stock that retailers maintain in their warehouses to use in case of an unprecedented surge in demand or if there is a delay in production or inventory delivery. <\/p>\n\n\n\n

The main difference between ATP and safety stock is what the inventory is specifically allocated for. <\/p>\n\n\n\n

For example, based on current demand and production resources, Sunshine Decor can guarantee 300 units of a dining chair will be available within the next 3 months.<\/p>\n\n\n\n

But for safety stock, they set aside 100 units of the same dining chair to fulfil orders only if inventory runs lower than expected. <\/p>\n\n\n\n

It’s important to also note that safety stock value doesn’t usually fluctuate, while ATP value can change on a daily basis.<\/p>\n\n\n\n

Available-to-promise inventory formula and calculation<\/h2>\n\n\n\n

Large brands and companies employ the ATP model to ensure profitability and reduce inventory write-offs<\/a>. It’s also often used for companies that have a B2B ecommerce <\/a>model. <\/p>\n\n\n\n

But any type of online business can benefit from calculating ATP inventory to help meet customer expectations and to make sure high-demand products<\/a> never go out of stock.<\/p>\n\n\n\n

There are a couple variations to the ATP formula, but the basic calculation is:<\/p>\n\n\n\n

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ATP = (Quantity On Hand + Supply Inventory<\/a>) \u2013 Demand<\/p>\n<\/blockquote>\n\n\n\n

Here is what each of the variables stand for:<\/p>\n\n\n\n