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Former Member
Sep 16, 2013 at 06:45 AM

Recyclable material purchase cycle


At one of our client the cost of material procured from vendor is determined after the material is utilized in production and the wastage percentage is determined.

e.g. a recyclable material is procured from vendor with the commitment that the allowed rejection is 3%. Suppose the consignment cost is 100 $ / kg. After the recycling process, if the materials rejection is within 3% than the vendor is paid in full however if the rejection exceeds than the allowed percentage suppose 5 % than the vendor will be paid 98$ after deducting 2$ for extra 2% rejection.


  • We have to track the vendor batch
  • We have to enter the material in the system to issue it to production.
  • We have to issue the purchse order after the material is consumed with the settled price.

Can anybody elaborate how to incorporate this in our purchasing/production cycle?