Quota Arrangements System Functions in a Planning Run

If a material is obtained from various sources of supply, the individual sources of supply can be provided with a quota arrangement. The quota arrangement applies to a certain period and specifies how the receipts should be distributed amongst each source of supply. Sources of supply include, for example, in-house production or external procurement, other plants as well as individual vendors and outline agreements.

You can determine in the material master record whether a material is to participate in the quota arrangement during material requirements planning. You will find a more detailed description of displaying and maintaining the quota file in MM Purchasing Guide.

For every order proposal (purchase requisition or planned order), the system determines the sources of supply according to the quota file and allocates the order proposal to the source of supply. Furthermore, the system updates the quota file during the planning run.

Thus, for the quota arrangement, the following steps are carried out during the planning run for every order proposal to be created:

• determining the source of supply

• allocating the source of supply to the order proposal

• updating the quota file

The criterion for the selection of the source of supply is the quota rating. It is calculated using the following formula:

The system allocates the order proposal to the source of supply with the lowest quota rating. In this example, the first order proposal is allocated to item 1 and the second order proposal to item 2.

Allocating the source of supply to the quota item determines the procurement type that the order proposal receives. Therefore, you can determine via the quota arrangement that, for example, 40% of a material is to be externally procured and the other 60% is to be produced in-house.

You can allocate a vendor to the order proposal for external procurement by maintaining the quota file. This vendor is either copied directly into the purchase requisition or it is copied into the resulting purchase requisition when the planned order is converted.

For every order proposal which takes part in a quota arrangement, the quota file is updated so that the quota arrangement is always kept up-to-date.