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Many companies maintain some stock items in different warehouses in different locations. Should it be a business requirement not to manage all stock, but only particular items on a warehouse level, the following setup can be used.
In this example, it is paramount that no single warehouse runs out or goes below minimum level of a particular item to guarantee the continued supply of customers.  SAP Business One facilitates pre-release stock checks on the entire stock or by warehouse. The initial settings are made under Administration -> System Initialisation -> Document Settings -> General Tab:


 The item of interest is found in several warehouses and on item level is defined to be managed by warehouse.


  
Current inventory situation:
 

In Stock

Committed

Ordered

Available

Minimum Inventory Level

25

0

5

30

20


When attempting to draw stock from warehouse 05, that would bring the quantity to less than the defined minimum inventory level but will not cause stock levels to go into negative quantity. The application will display a warning message:



  
 

Once the user clicks on Add, the SAP Business One will display an additional system message, but not prevent the user from adding the document:



  
 

Saving the document leads to the In Stock quantity being lower than the Min. Stock quantity:



  
 

Attempting to add a Delivery that would bring the In Stock level, in this warehouse, to below zero will be blocked by the application and the message will be displayed in a red colour:



  
 The user is prevented from adding the document.


Once the Manage Stock by Warehouse tick is removed, the minimum stock levels by warehouse in the matrix disappear:



Once the Item Master Data is updated, the document that above could not be added, will now be saved after the display of the minimum stock level violation warning message. This affects the stock levels as follows:


Since the item is not managed by warehouse, SAP Business One looks at the overall stock quantity. As long as the sum of all items in stock does not go below zero, the application will not prevent a user from posting a stock depleting document. In the above screen, the In Stock quantity for Warehouse 05 is '-6'.; the system still allowed the transaction posting as the total In Stock quantity is still a positive value at '38'.  
Therefore, if there is a requirement to control stock levels on a warehouse basis, the checkbox Manage Stock by Warehouse should be ticked. For more information, refer to the Expert Empowerment Session entitled: 'The Consequences of Setting Manage by Warehouse Option in System Initialisation'.