This example only applies to the allocation quota arrangement, that is, a splitting quota arrangement is not defined. You thus allocate every lot to one source of supply.

In the procurement procedure for a particular material, you have a preferred vendor A that is always to be selected first. However, this vendor can only deliver 100 pieces per week. If you require more than 100 pieces, then the remaining quantity is to be procured from vendor B. However, this vendor also has a limited capacity and can only deliver 200 pieces per week. If you require more than 300 pieces in a week, the remaining quantity is to be divided between vendors C and D in the ratio 70 : 30.

The sources of supply are maintained as follows:

The requirement quantity amounts to 1000 pieces.

The system selects vendor A first. However, due to the limited capacity situation, he only receives a procurement proposal for 100 pieces. Vendor B is then used. He receives an order proposal for 200 pieces. The remaining 700 pieces are supplied by either vendor C or D, depending on whose quota rating is the lowest.

This represents the typical procedure unless other purchase orders or firmed receipts already exist for vendors A or B in the week that the new procurement proposals are created. If, for example, a purchase order already exists for vendor A in this week for 100 pieces, then this vendor is no longer taken into account. If a purchase order for 40 pieces already exists, then he receives another order proposal for 60 pieces. The remaining quantity is distributed further.