What is the term for on-hand inventory balance minus allocations, reservations, backorders, and quantities held for quality issues?

• A. Backflush
• B. Available inventory
• C. Backlog
• D. ASN

Answer: (B)

Available inventory is the portion of on-hand stock that you can actually use to meet new demand. It’s calculated by taking the total on-hand quantity and subtracting anything that ties that stock up: allocations and reservations that already commit stock to specific orders, backorders that represent promised but unfulfilled demand, and quantities held for quality issues that aren’t yet usable. What remains is the amount you can rely on to fulfill new orders or plan production.

The other terms don’t describe this free, usable stock: backflush is a costing method in manufacturing, backlog means unfulfilled orders, and ASN refers to shipment notices.