GlossaryEN1 min readUpdated: Jun 8, 2026

Allocation

Allocation is the operational process of distributing limited inventory stock across multiple locations, customer segments, or sales channels.

Last updated: 8 June 2026Published: 19 June 2025

Source: https://www.cips.org/knowledge/procurement-topics-and-skills/inventory-and-warehouse/allocation/

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Logistics Concept

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Allocation is the operational process of distributing limited inventory stock across multiple locations, customer segments, or sales channels. In day-to-day practice, it works like this: a retailer's central warehouse receives a constrained quantity of a product and must decide how much goes to the Munich branch, Berlin store, and e-commerce fulfilment centre – guided by demand forecasts, service-level agreements, and business rules (for example, prioritizing high-velocity customer groups). Effective allocation prevents overstock in slow-moving markets and critical shortages in high-demand regions.

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