What is available to promise?
Available to promise is the slice of inventory you can still sell after subtracting the orders you have already committed to. Your on-hand count includes units that are spoken for, so it overstates what is truly sellable and invites overpromising. ATP closes that gap and surfaces only the stock that is genuinely free.
According to inventory distortion data from IHL Group, the total cost of inventory distortion (out-of-stocks + overstocks) reached $1.7 trillion globally in 2026, equal to 6.2% of global retail sales.
Key characteristics
- Future-focused, not just on-hand: ATP counts current stock plus planned incoming supply, then subtracts committed orders, giving you tomorrow’s position rather than today’s shelf.
- Simple formula: ATP equals on-hand inventory plus incoming supply, minus committed orders; a pull-based version ignores forecasted demand, while a push-based version includes it.
- Dynamic, not a fixed buffer: the number shifts daily as new orders and receipts land, and unlike safety stock it can even fall below zero.
- Prevents overselling: honest ATP keeps sales promises in step with real availability across every channel, a first line of defense in preventing stockouts.
- Depends on trustworthy live data: ATP is only as accurate as the counts behind it. IHL Group research finds 78% of retailers deal with inventory inaccuracies on a weekly or monthly basis, so real-time inventory tracking keeps the figure reliable.
Example
Picture a craft cold-brew roaster weighing a large new wholesale order. It has 100 cases on hand, 300 more arriving from its next production run, and 200 cases already committed to a standing subscription order.
The math is straightforward: 100 + 300 – 200 = 200 cases free to promise to the new buyer. Before locking a ship date, the sales rep checks live status in an order management system to be sure those numbers still hold.
Related terms
- safety stock formula: the reserve buffer teams often mix up with ATP.
- managing backorders: what to do when demand outruns what you can promise.
- inventory management terms: a broader glossary of adjacent vocabulary.
FAQ
What is the available-to-promise formula? ATP equals on-hand inventory plus incoming supply, minus committed orders. Its pull-based version counts only confirmed orders; its push-based version also subtracts forecasted demand.
What is the difference between ATP and safety stock? Safety stock is a mostly fixed buffer held in reserve for emergencies. ATP is a changing figure that shows how much stock is free to promise right now, and it can fluctuate daily or even go negative.
What does a negative ATP value mean? A negative ATP means committed orders exceed your available and incoming stock for that period. That shortfall is a signal to reorder, push out a promise date, or check capable-to-promise before you commit.