The company classified customers into A, B, and C groups and products into make‑to‑stock (MTS) and make‑to‑order (MTO), resulting in six allocation groups. For example, A‑group customers purchasing MTS products shared the same reservation bucket. This structure prevented situations where, for instance, an early sales order from a B‑group customer for an MTO product would consume supply reserved for A‑group customers and MTO products. These detailed reservation buckets are effective when supply is restricted: overall demand and supply approximately match or when demand exceeds supply.
However, when available supply (or capacity) exceeded demand, such detailed protection was unnecessary. A solution was developed to switch to broader reservation groups — for example, grouping only by customer segment or only by product segment — thereby reducing the number of reservation buckets. This prevented unnecessary initially unconfirmed sales orders and avoided manual reservation swaps.
When demand increased again, the company could revert to the more detailed reservation buckets, giving them greater control over how scarce supply was allocated across customer and product groups.