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Difference between inventory marking, Reservation and Batch reservation.

Marking is very similar to a physical reservation where you are saying that this item from the receipt will be "applied" or "allocated" to this issue. However, with marking there is also a financial implication. Marking overrides the financial cost of the issue. This means that FIFO, or Weighted average (or other costing method) is ignored on the issue. Instead the cost of the issue will be set to the cost of the receipt that you are marking against.

Marking can be used in combination with reservations as well. There are certain types of updates that will cause the system to automatically mark transactions together. For example, if you create a direct delivery purchase order from a sales order, or if you create a production order directly from a sales order. There are also options to updating marking when orders are generated from master planning. With marking, you can apply the marking even after the orders are financially updated (invoiced) but this is not possible with reservations.

With a reservation, there is no financial impact. You are only specifying the physical allocation of the products. This is useful for allocating the inventory to your customers. The difference between reservation and a "batch reservation" not much other that the level of specification. When you are making reservations you can reserve the inventory for any dimension that is being tracked physically. All transactions in AX have a Lot ID - you can think of this as the unique identifier for each inventory transaction. The big difference between a Lot ID and Batch number is that multiple batch numbers can be assigned to the same transaction. So if you have a sales order line for a quantity of 10(with one Lot ID say "X"), you could ship two or more batches (say Batch "1" with a quantity of 5 and batch "2" with a quantity of 5).

When you use batch numbers, your inventory is typically labeled with these batch numbers. This is very common with food or other manufacturing environments. Batch numbers also provide additional functionality for tracking manufactured date, expiry dates and some other more detailed information.

About the Author

Rohan Wilson Lobo

With 13 years of experience in ERP, specialising in AX functionality across versions , Solution designing ,Project Management and delivery.

Rohan also has special interests in reading about new business processes and features along with understanding their viability. He also enjoys spreading this message across through his blogs.

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