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Intermediate Certificate on pass

Stock Reservations & Allocations

Ring-fence stock for confirmed orders so available-to-sell figures stay honest.

4 lessons 35 min 5-question assessment 75% to pass
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What you’ll learn

  • Distinguish on-hand from available-to-sell
  • Reserve stock against confirmed orders
  • Release reservations correctly
  • Prevent overselling across channels

Course content

4 lessons · 35 min of reading
01
Lesson 1 of 4 Reading 8 min

On-hand vs available

On-hand is the physical count on your shelves. Available-to-sell is on-hand minus what is already promised to other orders. The gap between them is reserved stock.

The distinction matters because selling against on-hand instead of available is how you oversell — promising the same unit to two customers. Available is the only safe number to sell from.

If you hold 100 units on-hand but 40 are reserved for a confirmed wholesale order, only 60 are available to sell. A cashier who sees "100" and sells 80 has just oversold the wholesale customer by 20 units. Showing available — not on-hand — at the point of sale prevents that.

Key takeaways

  • On-hand is the physical count on the shelf.
  • Available = on-hand minus reserved stock.
  • Selling against on-hand causes overselling.
  • Example: 100 on-hand − 40 reserved = 60 available to sell.
02
Lesson 2 of 4 Practice 9 min

Reserving against orders

When an order is confirmed, you reserve (allocate) its stock — earmarking specific units so nothing else can claim them. The units stay physically on-hand but drop out of available.

Reserving matters because a confirmed order is a promise, and a promise needs the stock set aside the moment it is made, not when it ships. Otherwise a later walk-in sale can quietly eat the units.

A customer confirms an order for 40 units to collect Friday. You reserve 40 now; on-hand stays 100 but available falls to 60. Between now and Friday, any other sale draws only from those 60, so the Friday collection is guaranteed instead of being raided by mid-week foot traffic.

Key takeaways

  • Confirming an order reserves (allocates) its stock.
  • Reserved units stay on-hand but leave available.
  • Reserve at confirmation, not at shipment.
  • Example: reserving 40 now protects a Friday collection.
03
Lesson 3 of 4 Reading 9 min

Releasing reservations

A reservation must be released when its order ships (stock leaves on-hand and the reservation closes) or when the order is cancelled (stock returns to available). Stale reservations are as harmful as none.

Releasing correctly matters because a reservation that is never cleared locks stock forever — available shrinks for an order that will never collect, and you stock out on paper while units sit idle.

If that 40-unit order is cancelled but nobody releases the reservation, available stays at 60 even though all 100 are truly free to sell. Three such forgotten reservations could phantom-lock 120 units, triggering needless reorders. Always release on cancellation so available snaps back to the truth.

Key takeaways

  • Release on shipment (stock leaves) or cancellation (stock returns).
  • Stale reservations are as harmful as none.
  • An uncleared reservation locks stock forever.
  • Example: a forgotten 40-unit reservation phantom-locks available stock.
04
Lesson 4 of 4 Reading 9 min

Preventing overselling

Overselling happens when two channels — say a shop till and an online store — both sell from the same pool without sharing reservations. The fix is one available figure that every channel respects.

It matters because overselling forces the worst outcome: cancelling a confirmed order and apologising. A single, reservation-aware available number across channels is what stops it.

If your shop and website both see "60 available" but neither reserves against the other, both can sell 50 and you have promised 100 from 60. Routing every channel through one available figure that drops the instant either sells means the second sale sees the real remaining stock and stops at 60.

Key takeaways

  • Overselling comes from channels not sharing reservations.
  • The fix is one available figure all channels respect.
  • Overselling forces cancelling a confirmed order.
  • Example: shop and website both selling 50 from 60 = 100 promised.

Finished the material?

Take the 5-question assessment and earn your certificate — 75% to pass.

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