Which fulfillment method can lead to negative quantity-on-hand balances?

The option that can lead to negative quantity-on-hand balances is the method that allows you to not account for commitments when fulfilling orders. By ignoring commitments, you can process sales or fulfill orders even when inventory levels are lower than the quantities being demanded.

In a typical fulfillment process, the system checks inventory levels and available quantities to ensure that orders can be filled without exceeding what is physically in stock. However, when commitments are ignored, the system allows fulfillment regardless of the stock on hand. This can result in situations where more items are committed to orders than are actually available, leading to situations where the quantity-on-hand becomes negative.

Understanding this fulfillment method is essential for inventory management, as consistently allowing negative balances can lead to significant operational challenges and discrepancies between actual stock and system records. This highlights the importance of maintaining accurate inventory levels and the need for proper order fulfillment practices to prevent stock shortages and related issues.