Cla
ssi
fie
d
Purchasing Optimization
1. A purchase requisition can be intended for the warehouse or for direct consumption. This is
determined by the account assignment category.
2. Automatic Source Determination indicator make the system automatically attempts to
determine a suitable source in the background for the material or services contained in the
requisition.
3. If the system determines several valid sources of supply for an item, then it will display a list
of possible sources of supply. The list is displayed in the Source of Supply tab.
4. Logic system uses to find a unique source of supply: -
a. Quota Agreement: If a quota agreement is found in the system, the source of supply
is assigned with the lowest quota rating.
b. Source List: The vendor entries mentioned in the source list it fetched as the source
of supply. In case of multiple entries, the entry with Fixed indicator checked is
fetched.
c. Outline Agreement: Scheduling Agreement/contracts is an outline agreement is
fetched by the system if there are no quota agreements or source list found.
d. Info Record: At last, the system search for the info record created for the
combination of material and supplier. In case of multiple info records, user needs to
select the record.
5. Prerequisites for automatic conversion of purchase requisition to purchase order: -
a. The Automatic Purchase Order Allowed (Autom. PO) indicator must be set in the
material master record.
b. The Automatic Generation of Purchase Order Allowed (Automatic PO) indicator
must be set in the supplier master record.
c. A valid source of supply must be assigned to the purchase requisition item.
Source List
1. Source list can have source of supply as: (i) Vendor (ii) Contracts or Scheduling Agreement.
2. The Blocked status field in the source list could be used to block the source of supply for a
certain period.
3. If you set the MRP relevant indicator to 1 for the entry of source of supply, the entry is
selected during the MRP run and assigned to purchase Requisition.
4. Source List can be set as mandatory at the material master data level.
5. Maintaining Source List: -
a. Manual Creation: ME01.
b. Automatic Creation: ME05.
c. When creating contracts or scheduling agreement.
d. When creating purchasing info record. When creating these documents, goto Item
and select Maintain Source List.
Cla
ssi
fie
d
Quota Agreement
1. If a material can be obtained from various sources of supply, each individual sources of
supply can be allocated a quota arrangement.
2. The quota arrangement is document valid for a certain period and specifies exactly how the
receipts are to be distributed among each source of supply.
3. The allocated quantity is the total quantity that has been allocated to a source of supply
since the beginning of the quota arrangement.
4. Vendor with the lowest quota rating is selected during the source of supply determination.
a. Quota Rating: (Allocated Quantity + Base Quantity)/Quota
5. During MRP run the source determination with quota agreement the system splits an
individual requirement among various sources. This process is termed as splitting.
6. Splitting can be decided by Lot Sizing Procedure & Minimum Split Quantity.
7. The Minimum Split Quantity defines the lowest quantity that a lot must have in order to
split b/w several sources.
8. The Maximum Lot Size value is the maximum size that can be assigned in the quota
agreement.
9. The Minimum Lot Size value is the minimum size that can be assigned in the quota
agreement.
