QUOTA ARRANGEMENT

BUSINESS SCENARIO:

WHEN ONE MATERIAL HAS MORE THAN ONE SOURCE OF SUPPLY EACH SOURCE CAN BE
ALLOCATED TO A QUOTA ARRANGEMENT.QUOTA ARRANGEMENT HAS CERTAIN PERIOD
LIMIT.

THE TWO PROCEDURE OF QUOTA ARRANGEMENT:

1) ALLOCATION OF QUOTA ARRANGEMNT --- EVERY LOT IS ASSIGNED TO A SOURCE OF

SUPPLY

2) SPLITTING QUOTA ARRANGEMENT – A LOT IS SPLITTING AMONG THE SOURCE OF

SUPPLY.

FORMULA USED BY SYSTEM TO ALLOCATE QUOTA FOR PERTICULAR VENDOR AS FOLLOWS:

QUOTA RATING = (ALLOCATED QTY+BASE QTY)/QUOTA

NOTE- INITIALLY QUOTA GOES TO THE VENDOR WITH HIGHEST QUOTA.

- BY DEFAULT AFTER FIRST LOT QUOTA ARANGEMENT QUOTA GOES TO THE VENDOR
WITH LOWEST QUOTA RATING.

EXERCISE AS FOLLOWS:

CREATE ONE MATERIAL QUOTA1 AND MAINTAIN QUOTA USAGE IN PURCHASING AND MRP2
VIEW.
AND
AND MAINTAIN RE ORDE POINT IN MRP VIEW

NOTE---- QUOTA USAGE INDICATES QUOTA ARRANGEMENT IS APPLICABLE FOR IN WHICH

AREA

PLEASE FIND BELOW THE IF INDCATOR IS SET FOR ------ 1

SPRO--MATERIALS MANAGEMENT--- PURCHASING---- QUOTA ARRANGEMENT----

DEFINE QUOTA ARRANGEMENT USAGE
THIS MEANS QUOTA ARRANGEMENT APPLICABLE FOR PO AND SA SCHEDULE LINE

IF INDCATOR IS SET FOR ------ 2

QUOTA ARRANGEMENT IS APPLICABLE FOR PO,SA SCHEDULE LINE,PLANNED ORDER,
PURCHASE REQUISITION

IF INDICATOR IS SET FOR ---------- 3

QUOTA ARRANGEMENT IS APPLICABLE FOR PO,SA SCHEDULE LINE,PLANNED OREDER,PR,MRP

IF INDICATOR IS SET FOR --------- 4

QUOTA ARRANGEMENT IS APPLICABLE FOR PO,SA SCHEDULE LINES,PLANNED ORDER,

PR,MRP,PRODUCTION OREDER
SAVE

CREATE 3 VENDOR AND PURCHASE INFO RECORD

MAINTAIN QUOTA ARRANGEMENT ------------ T CODE ----- MEQ1

SELECT LIN EITEM AND CLICK ON ITEM ICON

AND MAINTAIN QUOTA FOR VENDORS

SAVE
RUN MRP ---- T CODE ----- MD03 SINGLE ITEM—SINGLE LEVEL
ENTER ENTER
CLICK ON PR NO
FIRM THIS VENDOR AND SAVE

NOW CHECK QUOTA STATUS ------ MEQ1

QUOTA GOES TO VENDOR 3 -------QUOTA3

NOW QUOTA RATING FOR VENDOR AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 0

QUOTA2 0

QUOTA3 12.5

NOW INCREASE THE RE ORDER LEVEL AND RUN MRP MD03

SAVE

RUN MRP MD03

FIRM QUOTA1 AND SAVE

GO TO MEQ1 AND SEE STATUS OF QUOTA ARRANGEMENT

SYSTEM PICK VENDOR QUOTA1------ BECAUSE QUOTA1 IS HAVING LOWEST QUOTA AND AS
WELL AS HIGHEST QUOTA IF COMPARE WITH QUOTA2

STATUS OF QUOTA ARRANGEMENT AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 8.3

QUOTA2 0

QUOTA3 12.5

NOW INCREASE THE RE ORDER LEVEL AND RUN MRP (MD03) TO GENERATE REQUISITION
SAVE

RUN MRP MD03

FIRM VENDOR 2 AND SAVE

GO TO MEQ1 AND CHECK QUOTA ARRANGEMENT

.

VENDOR QUOTA2 IS SELECTED BY THE SYSTEM BECAUSE ,THAT VENDOR IS HAVING LOWEST
QUOTA RATING BEFORE RUNNING MRP

QUOTA ARRANGEMENT STATUS AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 8.3

QUOTA2 40

QUOTA3 12.5

NOW INCREASE THE RE ORDER POINT AND RUN MRP MD03

SAVE

MD03
FIX THE VENDOR AND SAVE

CHECK THE STATUS OF QUOTA ARRANGEMENT -MEQ1

SYSTEM PICKS VENDOR QUOTA1 BECAUSE ,THAT VENDOR IS HAVING LOWEST QUOTA
RATING BEFORE RUNNING MRP.

QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 25

QUOTA2 40

QUOTA3 12.5

NOW IF YOU INCREASE RE ORDER POINT IT WILL GO TO VENDOR QUOTA3.

SCENARIO-1.MAXIMUM QTY

IF YOU ENTER MAXIMUM QUANTITY FOR VENDOR QUOTA3

SAY FOR EG; 100

SAVE

NOW INREASE REORDER POINT AND RUN MRP MD03

SAVE

MD03
FIX THE VENDOR AND SAVE

CHECK STATUS OF QUOTA ARRANGEMENT IN MEQ1

NOTE ACCORDING QUOTA RATING QUOTA MUST GO TO VENDOR QUOTA3 BUT WE
MENTIONED MAXIMUM QTY FOR QUOT3 IS 100 AND 100 QTY IS ALREADY ALLOCATED TO
THE SAME. THEREFORE SYSTEM CHECKS THE LOWEST QUOTA RATING AMONG QUOTA1 AND
QUOTA2. HERE QUOTA1 IS HAVING LOWEST QUOTA RATING BEFORE RUNNING
MRP,THEREFORE SYSTEM PICKS QUOTA1.

QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 41.6

QUOTA2 40

QUOTA3 12.5
INCREASE RE ORDER POINT AND RUN MRP MD03

SAVE

MD03
FIX THE VENDOR AND SAVE

CHECK THE QUOTA ARRANGMENT --- MEQ1

NOTE- SYSTEM PICKS QUOTA2 BECAUSE IT IS HAVING LOWEST QUOTA AMONG THE
QUOTA1 AND QUOTA2. QUOTA ARRANGMENT IS NOT APPLIED FOR VENDOR QUOTA3
BECAUSE OF MAXIMUM QTY 100.

QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 41.6

QUOTA2 60

QUOTA3 12.5

ACCORDING TO QUOTA RATING NEXT QUOTA HAS TO GO TO QUOTA1

SCENARIO 2) MAXIMUM LOT SIZE

MEQ1

ENTER MAX LOT SIZE 50 TO VENDOR QUOTA1

SAVE

INCEARSE THE RE-ORDER POINT AND RUN MRP MD03

SAVE

NOTE- QTY IS INCREASED BY 100.

MD03
TWO NEW REQUISITION GENERATED

THE FIRST REQUISITION AS FOLLOWS

FIX THE VENDOR QUOTA1 FOR REQUISITION 10008764 AND SAVE

HERE SYSTEM PICKS QUOTA1 BECAUSE IT IS HAVING LOWEST QUOTA AMONG QUOTA1 AND
QUOTA2.(QUOTA3 MAX QTY IS 100)

NOW QUOTA ARRANGMENT STATUS AS FOLLOWS

QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 50

QUOTA2 60

QUOTA3 12.5
NOTE ---- ANOTHER REQUISITION GENERATED BECAUSE WE GAVE MAX LOT SIZE FOR
VENDOR QUOTA1 IS 50.

NOW WE SEE SECOND REQUISITION 100008765

SECOND REQUISITION ALSO GOING TO VENDOR QUOTA1 BECAUSE OF LOWEST QUOTA

RATING AS MENTIONED ABOVE.

FIX THE VENDOR AND SAVE.

CHECK THE QUOTA ARRANGGEMENT IN MEQ1

NOTE------ IN ABOVE CASE SYSTEM FIRST CHECK LOWEST QUOTA RATING AMONG QUOTA1
AND QUOTA2 THEN SELECT QUOTA1 FOR FIRST 50 QTY BECAUSE WE GAVE MAX LOT SIZE 50
FOR QUOTA1,ONCE THIS IS SATISFIED THEN SYSTEM AGAIN CHECK LOWEST QUOTA RATING
FOR NEXT 50 QTY,, IN THIS CASE AGAIN QUOTA1 IS HAVING LOWEST QUOTA
RATING.THEREFORE REMAINING 50 QTY GOES TO QUOTA1.

NOW QUOTA ARRANGMENT STATUS AS FOLLOWS

QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 58.3

QUOTA2 60

QUOTA3 12.5
NOW IF YOU INCREASE RE ORDER POINT AND RUN MRP QUOTA GOES TO QUOTA1.

SCENARIO 3) MINIMUM LOT SIZE

NOW LET US SAY MIN LOT SIZE FOR VENDOR QUOTA1 IS 25 MAINTAINED IN QUOTA ---
MEQ1

SAVE

INCREASE THE RE ORDER LEVEL BY 10 AND RUN MRP

SAVE

RUN MRP MD03

EVEN THOUGH RE ORDER POINT IS INCREASED BY 10 QTY, VENDOR QUOTA1 IS ALLOCATED
TO 25 QTY BECAUSE WE MAINTAINED MIN LOT SIZE FOR VENDOR QUOTA1 IS 25.

FIX THE VENDOR QUOTA1

SAVE

QUOTA ARRANGEMENT STATUS AS FOLLOWS

MEQ1
QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 62.5

QUOTA2 60

QUOTA3 12.5

INCREASE THE RE ORDER POINT AND RUN MRP MD03

SAVE

MD03

FIX THE VENDOR QUOTA2 AND SAVE

GO TO MEQ1 AND CHECK THE STATUS

SAVE

QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 62.5

QUOTA2 65

QUOTA3 12.5

SCENARIO 4) QUOTA BASE QTY

THE MAIN PURPOSE OF THE QUOTA BASE QTY IS TO CONTROL QTY FOR QUOTA
ARRANGEMENT
NOW IN ABOVE CASE YOU DO NOT WANT QUOTA TO ASSIGN TO VENDOR QUOTA1 EVEN
THOUGH IT HAS LOWEST QUOTA RATING,THEREFORE YOU ENTER BASE QTY AGAINST
QUOTA1 VENDOR.

SAVE

NOW QUOTA RATING AS MENTIONED BELOW

VENDOR QUOTA RATING

QUOTA1 (375+45)/6 = 70

QUOTA2 60

QUOTA3 12.5
NOW INCREASE THE RE ORDER POINT AND RUN MRP

SAVE

MD03
FIX THE VENDOR QUOTA2 AND SAVE

CHECK THE STATUS OF QUOTA ARRANGEMENT

MEQ1
SAVE

QUOTA RATING AS MENTIONED BELOW

VENDOR QUOTA RATING

QUOTA1 (375+45)/6 = 70

QUOTA2 85

QUOTA3 12.5

SCENARIO 4) USE OF INDICATOR “ 1X “

NOW ACCORDING QUOTA RATING VENDOR QUOTA1 WILL GET THE QUOTA FOR NEXT
REQUISITION (NOTE QUOTA3 IS SET FOR MAX QTY 100)

NOW SELECT “ 1X “ INDICATOR FOR AGAINST VENDOR QUOTA1

SAVE

INCREASE RE ORDER POINT AND RUN MRP

INCREASE THE QTY BY 55

SAVE

MD03
THE FIRST 50 QTY GOES TO VENDOR QUOTA1 AS PER LOWEST QUOTA RATING.FIX VENDOR
QUOTA1 AND SAVE.

NOTE--- TWO REQUISITION WILL GENERATE BECAUSE MAX LOT SIZE FOR VENDOR QUOTA1
IS 50.AND FOR REMAININING 5 QTY ,SYSTEM SOURCE THE VENDOR ACCORDING TO QUOTA
RATING, QUOTA RATING AFTER ALLOCATING 50 QTY TO VENDOR QUOTA1 AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 (375+50+45)/6 = 78.3

QUOTA2 85

QUOTA3 12.5

NOW ACCORDING TO QUOTA RATING REMAINIG 5 QTY HAS TO GO TO VENDOR QUOTA1

LET US CHECK REQUISITION NO 10008770

BUT SYSTEM PICKS VENDOR QUOTA2 INSTEAD QUOTA1 BECAUSE WE SELECTED INDICATOR “
1X “ AGAINST VENDOR QUOTA1.

NOTE------ IF WE TICK INDICATOR “ 1X “ AGAINST ANY VENDOR SYSTEM FOLLOWS QUOTA

RATING FOR FIRST ALLOCATION ,AND IT WILL NOT PICK SAME VENDOR AGAIN EVEN THOUGH
PREVIOUS VENDOR HAS LOWEST RATING.

NOW FIX VENDOR QUOTA2 AND SAVE

SAVE

QUOTA RATING AS FOLLOWS

VENDOR QUOTA RATING

QUOTA1 (375+50+45)/6 = 78.3

QUOTA2 86

QUOTA3 12.5

NOTE--- 1) TABLES USED FOR QUOTA ARRANGEMENT

EQUK ----------- QUOTA FILE HEADER LEVEL

EQUP ---------- QUOTA FILE ITEM LEVEL

TWO) SYSTEM PICKS VENDOR AS PER QUOTA FILE AND QUOTA RATING.
3) QUOTA ARRANGEMENT IS PLANT LEVEL DATA

4) DOCUMENT TYPE FOR QUOTA ARRANGEMENT ‘ Q ‘