Limits and tolerances on purchase orders

Tolerances are limits that define the percentage that you accept overshipped or undershipped items.

You can define tolerances at any of these levels:

• Purchasing company: Use Purchasing Companies.
• Purchasing vendor and location: Use Manage Vendors and Purchase From Location.
• Purchasing vendor: Use Vendor Purchasing Information.
• Purchase order line: Use Manage Purchase Orders.

This is the hierarchy that is used to determine the tolerance:

1. If Purchase From is defined on the purchase order, then the tolerances from Vendor Purchase From are used.
2. If a Purchase From is not defined on the purchase order, then the tolerances from Manage Vendors are used.
3. If Purchase From is not defined on the purchase order, and tolerances are not set up on Manage Vendors, then tolerances on Purchasing Companies are used.

You can define an undershipment percentage to determine when to cancel backorder quantities. If items received fall short of what is ordered, then they are marked as backorder amounts. If the amount that is backordered is within the tolerance you defined, then the backorder is canceled. You can define an overshipment percentage to determine when receiving buyer messages are created.