As special order items are received into inventory, the system updates the on hand quantity for the item by the quantity received. The system also updates the reserved, total reserved and allocated quantity for the item by the quantity received.
The date fields in the inventory record (last received date, etc.) are updated as appropriate and the average cost of the item is recalculated. Inventory Activity records are written to record the transaction. Once the items have been received, the allocation program is executed. The allocation program allocates the special order items to the individual sales orders that they were placed for (based on the sales order number and sales order line number stored in the special order PO lines). Once the system has allocated the quantity received to the appropriate sales order, any remaining inventory from the purchase order line is allocated to any other orders waiting for the product (again to ensure that any available quantities are used up as soon as possible).