What Is Quota Arrangement

Quota Arrangements means a material can be obtained from various sources of supply,
each individual source of supply can be allocated a quota arrangement.
The quota arrangement is valid for a certain period of time and specifies exactly how the
receipts are to be distributed amongst each source of supply.
You can set the quota arrangement for in-house production as well as for external
procurement. ources of supply can be!
- an individual vendor or outline agreement
- another plant, from which material should be procured
- a production version
To used quota maintenance, you have to maintain the quota arrangement usage for the
respective material in the material master "#$% & view'.
The quota arrangement usage determines whether a material is included in a quota
arrangement and which operations lead to a quota arrangement. You can define, for
example, that only purchase orders are included in quota arrangements or that
procurement proposals created by the system in the planning run are also included.
- You define the quota arrangement usage in (ustomi)ing for %urchasing in the *#+
activity - ,efine quota arrangement usage.
- You have maintained the quota file for the material.
- You define the sequence of the sources of supply, the quotas per source of supply and
numerous other parameters in the quota file.
,uring the planning run, the system determines the sources of supply according to the
quota file and assigns the procurement proposals to the sources of supply.
*n external procurement, the procurement proposal is allocated to the appropriate vendor.
This vendor is copied to the purchase requisition.
-or every procurement proposal with a quota arrangement, the system updates the quota
file, so that the quota arrangement is always based on the current situation.
Two procedures are available!
- Allocation quota arrangement! every lot is assigned to a source of supply
- plitting quota arrangement! a lot is split among various sources of supply
- -urther functions are also available for controlling quota arrangements. -or example,
you can set a maximum release order quantity that defines the maximum delivery
capacity of one particular vendor.
*n ummary!
The quota arrangement is an instrument used in sourcing administration i.e it basically
divides the total requirement of a material over a period among certain sources of supply
by assigning a quota to each source. The quota specifies which portion of the total
requirement should be procured from a given source.
*f a quota arrangement exists for a material, it is ta.en into account in the source
determination process.
*t is specified for a certain period. The existence of a quota arrangement does not involve
the apportioning "among different sources' of an individual material requirement "that is
the quantity set out in an individual purchase requisition'. The entire requested quantity
in a requisition is assigned to one source under the quota arrangement.