7/22/2009

Item Purchasing Controls

Most of the mid-size and large-size companies would be interested to have an efficient control on their purchasing processes. Among such common controls are the ability to restrict the Order quantity by Minimum order quantity and maximum order quantity. Minimum order is the minimum quantity of an item that can be ordered. Maximum order is the maximum quantity of an item that can be ordered. Some vendors require that items must be ordered at least the minimum quantity specified by them. In these cases, having a restriction in terms of Minimum order and Maximum order helps efficient purchasing process in any organization. Dynamics GP has many such controls available as part of its Purchasing and Inventory series. Some of the salient features of Item Resource Planning in Dynamics GP include

1. Ability to restrict purchase order by Minimum and Maximum orders
2. Calculate the Average Lead time automatically
3. Suggested Purchase order generator
4. Selection of Vendors based on lowest cost or shortest lead time
5. Replenishment of Items based on Order point quantity, Order up-to level, Vendor EOQ (Economic Order quantity)

In this post, I’ll show how we can setup the minimum and maximum order quantities and how it controls the purchase order entry.

In Dynamics GP V10, minimum order and maximum order quantity is tracked per Item-vendor combination (Purchasing => Cards => Vendors). In case we would like to order the same item from multiple vendors, the minimum and maximum order quantity has to be specified for each vendor as shown in the screen below

itemvendors

In the screen above, the minimum order is set at 25 units while maximum order is set at 100 units. So, whenever the purchasing department raises a purchase order for this item and the vendor, the system will not allow them to process the PO for a quantity less than the minimum order or greater than the maximum order quantity. It gives the following message whenever we try to order an item less than the minimum order in the PO line entry.

purchaseorder_mimorder

Similar message would be displayed whenever trying to order more than the maximum order quantity. Maintaining minimum and maximum orders efficiently in Dynamics GP results in effective Supply Chain Management.

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