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Former Member

Inquiry on Quota Arrangement

Hi Experts,

I have set-up the ff. for Quota Arrangement.

1. Material Master:

a. Quota Arrangement Usage = 3

b. Lot Size = PK with Planning Calendar as Quarterly (with Splitting Quota set-up)

c. Rounding Profile = 4,000 pcs.

2. Source List

a. MRP Relevant = 1 (both for Vendor A and Vendor B)

3. Quota Arrangement

a. Proc. Type = F

b. Vendor A = 80%

c. vendor B = 20%

Stock on Hand : 474 pcs.

Requirement 1: 7,506 pcs.

Requirement 2: 980 pcs.

When MRP run using MD03, system generated 2 PRs:

PR1 = 8,000 pcs for Vendor B to support Requirement 1

PR2 = 486 pcs. for Vendor A to support the remaining Requirement

What Quota Arrangement (Allocation Quota Arr. or Splitting Quota Arr.) did the system used? Why did the system generated PR1 for Vendor B, when in fact Vendor A has a higher quota?

Thanks in advance,

SD

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  • Best Answer
    author's profile photo Former Member
    Former Member
    Posted on Jul 30, 2009 at 10:46 AM

    Hi,

    The quota determines which portion of a total requirement over a period should be procured from the source in question. The Quota is considered for the first time allotment of the requirement.

    During the second time allotment, the system calculates the Quota Rating and finds the source from which a specific material requirement is to be procured from among the sources that have been assigned a quota in the current validity period.

    The system assigns a quota rating to each source of supply. The quota rating is calculated as follows:

    Quota rating =

    Quota-allocated quantity + Quota base quantity

    -


    Quota

    where

    Quota-allocated quantity= Total quantity from all purchase requisitions, purchase orders, release orders, and scheduling agreement schedules allocated to a given source of supply.

    Here, the important point is, the system will consider the Balance quantity to be supplied by the particular Source of supply as "Quota- allocated quantity", but, not the total quantity ordered as on date.

    Quota base quantity

    = Quantity used to control the quota arrangement when new sources of supply are included.

    Quota

    = A number specifying which portion of a total requirement should be obtained from a certain source.

    The source with the lowest quota rating represents the valid source, even if it has a quota rating of 0 (that is, the quota-allocated quantity and the quota base quantity have the value 0). If more than one source of supply has a quota rating of 0, the item with the highest quota is the valid source of supply.

    In connection with the quota arrangement, the splitting quota is only relevant to Materials Planning, not to Purchasing. In Materials Planning, requirements can be split up among various vendors. This is not possible in Purchasing.

    So, please check the GR postings related to each Vendor and based on that calculate the Quota-Allocated Quantity for your two vendors. Then, calculate 'Quota Rating' and check, whether functioning properly.

    Regards,

    Narayana.

    Edited by: Narayana Ghanta on Jul 30, 2009 4:17 PM

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    • Former Member

      Hi,

      Thanks for your reply. I understand when you said, that on first allotment , system will use Quota, but on the second and succeeding allotment, system will use Quota Rating to allocate.

      But you also mentioned "splitting quota is relevant to Materials Planning only".

      I just want to confirm if my understanding is correct, if we will consistently use Materials Planning, will the system always use Quota and not the Quota Rating to allocate.

      Also, I did a simulation and on my testing, I noticed that the 1st PR generated was not split which could be because the PR Delivey Date is before the Valid From Date of the Quota Arrangement. I would like to know what could be the basis of the source determination for the PR since Quota Arrangement is still not valid yet because the PR was assigned to the Vendor with lowest Quota and not the Fix Vendor in the Source List.

      Appreciate your help and immediate reply.

      Thanks and BR,

      SD

  • Posted on Jul 27, 2009 at 10:01 AM

    Dear SD,

    Check what is the priority maintained for the quota arrangement in the T Code MEQ1.

    I guess in your case the priority 1 must be given to vendor B and the 2nd priority to the vendor A.

    Check and revert back.

    Regards

    Mangalraj.S

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 27, 2009 at 11:58 AM

    Hi,

    Quota arrangement decides the distribution of required quantity, not only on the Quota mentioned in the Quota Arrangement; but also, on various factors like:

    - Maximum Release Quantity per Period,

    - Maximum Quantity of Quota per Vendor,

    - Quota Base Quantity ,

    - Allocated Quantity of Quota Arrangement Item (Total quantity procured to date from the quota arrangement item source),

    and The Quota Rating (if some quantities are already procured from the available Vendors, to date).

    Hence, please look into these details also.

    Regards,

    Narayana.

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    • Former Member

      Hi,

      Thanks for your reply. Basically my question is, when does the system uses the Allocation Quota Arrangement or the Splitting Quota Arrangement?

      - Maximum Release Quantity per Period, -


      > I did not set-up any.

      - Maximum Quantity of Quota per Vendor, -


      > I did not set-up any.

      - Quota Base Quantity , -


      > I did not set-up any.

      - Allocated Quantity of Quota Arrangement Item (Total quantity procured to date from the quota arrangement item source),

      and The Quota Rating (if some quantities are already procured from the available Vendors, to date). -


      > Does the system used the Allocation Quota Arrangement, why? Anyway for Vendor A has 4,000 pcs procured and Vendor B has 12,000 pcs. Based on the formula, still the PR of 8,000 pcs. should be for Vendor A.

      BR,

      SD

  • Posted on Jul 27, 2009 at 03:24 PM

    Hi,

    Please check the maximum qty provided to vendor A in the quota.Please check the procured qty till now with this vendor.and also for the vendor A.

    Maximum quantity of quota arrangement item

    Use

    A quota arrangement item is no longer suggested as the source if the quota-allocated quantity is equal to or exceeds the maximum quantity

    Minimum quantity for splitting quota

    Specifies for the splitting quota the minimum quantity that a lot must have in order to be apportioned among several sources of supply in the planning run.

    If the lot is smaller than or equal to the minimum quantity, the system will proceed on the basis of the usual quota arrangement logic.

    Dependencies

    Allocation by quota using splitting quotas is only carried out via a requirement planning run, subject to the following preconditions:

    Through the appropriate entry in the field Quota arrangement usage (on the MRP data screen 2 or Purchasing screen) it must have been specified that a quota arrangement is to be applied in the planning run.

    The indicator for the splitting quota must be set for the the lot-sizing procedure used for materials planning purposes in Customizing.

    Regards,

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    • Former Member

      Hi,

      No set-up on maximum quantity for both vendors in the quota therefore system should consider the quota defined regardless of quota allocated quantity.

      No set-up on Minimum splitting quantity, is it required?

      All you have mentioned in the dependencies were all set-up properly, please see the original message I posted.

      I want to understand why the system generated the PR with higher quantity to the vendor with lower quota. Appreciate your help.

      Thanks and BR,

      SD

  • author's profile photo Former Member
    Former Member
    Posted on Aug 03, 2009 at 01:13 PM

    Hi,

    By the statement, "In connection with the quota arrangement, the splitting quota is only relevant to Materials Planning, not to Purchasing" , What I want to say is if MRP is used for Material procurement, then only splitting quota field has some significance.

    As correctly understood- on first allotment , system will use Quota; but on the second and succeeding allotment, system will use Quota Rating to allocate.

    The system determines the source of supply of a requested material on the basis of the following factors (in the order shown):

    1. Quota arrangement : The system first determines whether a quota arrangement within whose validity period the delivery date in the requisition falls exists for the material.

    If a quota arrangement exists, the system determines the vendor from whom the material is to be procured according to the quotas assigned to the vendors and then suggests the source.

    If no source can be determined this way, the system checks the source list.

    2. Source list: The system determines whether an entry in the source list within whose validity period the delivery date of the requisition falls exists for the material. The source in question may be a fixed vendor or an outline agreement (contract or scheduling agreement). If the source list contains a unique source, the requisition is assigned to that source.

    If several sources are found, a box appears for selection purposes.

    If no source could be determined, the existing outline agreements and info records are examined.

    3. Outline agreement and info record: The system searches for contracts, scheduling agreements, and info records for the material and suggests these. (If info records with more than one purchasing organization exist, all info records of the purchasing organization(s) that is/are responsible for procurement for the requesting plant are also suggested.)

    If several outline agreements and perhaps info records exist, all possible sources are offered for selection in a box.

    For your case, as Quota Arrangement is still not valid, the system searches for Source List as next alternative for Source selection. Please also check the validity periods in source list also, before considering the Fixed Vendor.

    Regards,

    Narayana.

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    • Former Member

      Hi Narayana,

      Thank you very much for your very helpful explanation.

      I know you now understand my case. Since Quota Arrangement is not yet valid, then Source List was used.

      You said, if several sources are found (in Source List), a box appears for selection purposes. Where will this box appear? In my case, the system already assigned the PR to specific vendor. My question is what was the basis?

      You also said, the system looks at the Validity period aside from the Fix Vendor indicator. In my test case, there are two vendors that are both valid and both are MRP Relevant. Set-up in the Source List is shown below:

      Valid From Valid To Fix MRP Relevant

      Vendor A - 100028 04/11/2007 12/02/2010 1

      Vendor B - 100490 11/07/2008 12/31/9999 X 1

      MRP Result:

      PR was assigned to Vendor A - 100028,

      PR Release Date: 04/03/2009 (Order Start Date in the Past is allowed)

      PR Delivery Date: 07/16/2009

      PR Requisition Date: 08/09/09

      With the above set-up what else was the consideration why the system assigned the PR to Vendor A. Because without the Quota Arrangement, MRP would normally assign the Fixed Vendor in the PR if there are multiple vendors valid at the same time. Please enlighten me. Thanks....

      BR,

      SD

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