Procurement Settings by Site (tdpur0111m000)

Site

The site for which the procurement settings are defined.

Address

Logistic Company

The logistic company to which the site is linked.

External

Indicates whether the site belongs to an external party such as a customer or a subcontractor.

An external site can include warehouses in which inventory owned by your company is stored, and for which your company performs planning.

Purchase Office: The purchase office linked to the site. This office is responsible to manage the purchase orders for the site.
Buyer: The code of the employee who manages the purchases for the site.
Description: The description or name of the code.

Use Global Procurement Parameters

If this check box is selected, the parameter settings specified in the Procurement Parameters (tdpur0100m000) session are used. If this check box is cleared, you can set the procurement parameters specific to the site.

General

Insertion of Default Item - Purchase Business Partner

If this check box is selected, LN adds an item - business partner record in the Items - Purchase Business Partner (tdipu0110m000) session when new purchase related data is added in the Items - Purchase (tdipu0101m000) session.

If this check box is cleared, you must manually specify item - business partner records in the Items - Purchase Business Partner (tdipu0110m000) session.

Note: This value is defaulted from the Procurement Parameters (tdpur0100m000) session only if the Use Global Procurement Parameters check box is selected.

Use Full Supply Time

If this check box is selected, you can specify and update full supply times and calculate full (cumulated) lead times.

Note: This value is defaulted from the Procurement Parameters (tdpur0100m000) session only if the Use Global Procurement Parameters check box is selected.

Maximum Number of Phantom Levels to be Skipped

This parameter determines the default number of bill of material (BOM) levels that are summarized when you use phantoms.

In Purchase Control , you can copy bills of material (BOMs) to purchase orders in the Copy BOM Components to Order (tdpur4812s000) session.

Note:

The number of BOM levels must be one or higher.
This value is defaulted from the Procurement Parameters (tdpur0100m000) session only if the Use Global Procurement Parameters check box is selected.

List Group

The default list group that is used in purchase orders to identify the list item components when you purchase a list item. This value is defaulted only when no list group is linked to the buy-from business partner in the Buy-from Business Partner (tccom4120s000) session.

Note: This value is defaulted from the Procurement Parameters (tdpur0100m000) session only if the Use Global Procurement Parameters check box is selected.

Configuration Date

The date on which the bill of material (BOM) must be exploded or the date that determines the valid revision of an engineering item.

Note: This value is defaulted from the Procurement Parameters (tdpur0100m000) session only if the Use Global Procurement Parameters check box is selected.

The configuration date determines the date with which the effective date or the expiry date is compared in the BOM or the revision.

Note:

In the Purchase Order Lines (tdpur4101m000) session, if the Inventory Handling field is set to:

By Main Item
No bill of material is read.
By Component
The applicable bill of material is read.

Allowed values

Delivery Date: planned receipt date
Order Date: order date

Note: On purchase schedules, this date is not available. Therefore, the planned receipt date is used.
System Date: system date

Change Control

Effective Date: The date and time at which the parameter settings are modified.
Last Changed By: The code of the user that last modified the parameter settings.

Use Global Purchase Requisition Parameters

If this check box is selected, the parameter settings specified in the Purchase Requisition Parameters (tdpur0100m200) session are used. If this check box is cleared, you can set the purchase requisition parameters specific to the site.

General

Approval Authorizations

The approver for the purchase requisition.

Allowed values

Any Approver: Any user is allowed to approve purchase requisitions.
Any Approver in Approver Department: Any user whose employee code is linked to the Approver Department and who is specified on the approver list, is allowed to approve purchase requisitions.
Only Current Approver: Only the user whose employee code is equal to the Approver on the approver list, is allowed to approve purchase requisitions.

Note: This value is defaulted from the Purchase Requisition Parameters (tdpur0100m200) session only if the Use Global Purchase Requisition Parameters check box is selected.

Submit Generated Requisitions Automatically

If this check box is selected, the purchase requisitions generated are automatically submitted for approval.

Note:

If this check box is selected, the purchase requisition cannot be modified before it is approved. The changes to the requisition are allowed only after it is rejected by the approver.
This value is defaulted from the Purchase Requisition Parameters (tdpur0100m200) session only if the Use Global Purchase Requisition Parameters check box is selected.

Change Control

Effective Date: The date and time at which the parameter settings are modified.
Last Changed By: The code of the user that last modified the parameter settings.

Use Global Request for Quotation Parameters

If this check box is selected, the parameter settings specified in the Request for Quotation Parameters (tdpur0100m100) session are used. If this check box is cleared, you can set the request for quotation parameters specific to the site.

General

Send RFQ to Not approved Buy-from Business Partner

If this check box is selected, you can send the RFQs to business partners for which the item-business partner combination is not approved in the Items - Purchase Business Partner (tdipu0110m000) session.

Note:

This field is defaulted to the Send RFQ field in the RFQ Responses (tdpur1506m000) session.
This value is defaulted from the Request for Quotation Parameters (tdpur0100m100) session only if the Use Global Request for Quotation Parameters check box is selected.

Change Control

Effective Date: The code of the user that last modified the parameter settings.
Last Changed By: The code of the user that last modified the parameter settings.

Use Global Purchase Order Parameters

If this check box is selected, the parameter settings specified in the Purchase Order Parameters (tdpur0100m400) are used. If this check box is cleared, you can set the purchase order parameters specific to the site.

Backorders

Backorders Allowed

If this check box is selected, LN creates backorders.

The backorder quantities are calculated on the basis of the receipts and approvals carried out in the following sessions:

Warehouse Receipt (whinh3512m000)
Warehouse Inspections Overview (whinh3122m000)
Purchase Receipts (tdpur4106m000)

You can maintain the backorder quantity and manually confirm it in the Potential Purchase Backorders (tdpur4101m700) session. You can view the confirmed backorders in the Confirmed Purchase Backorders (tdpur4101m800) session.

Note:

This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.
LN does not generate (potential) backorders for return orders.

If this check box is cleared, LN does not create backorders. As a result, no backorder quantity is calculated.

Note:

If this check box is cleared, and if the Final Receipt check box is selected in the Warehouse Receipt (whinh3512m000) session, the following applies:

If the ordered quantity is more than the received quantity in the Warehouse Receipt (whinh3512m000) session, the difference between the ordered quantity and the received quantity is not considered when logging planned inventory transactions in the Planned Inventory Transactions (whinp1500m000) session and the Order - Planned Inventory Transactions (whinp1501m000) session.
If goods are rejected in the Warehouse Inspections Overview (whinh3122m000) session, the rejected quantity is not considered when logging planned inventory transactions in the Planned Inventory Transactions (whinp1500m000) session and the Order - Planned Inventory Transactions (whinp1501m000) session.

Example

Ordered Quantity = 10.
LN cannot generate (potential) backorders.


Received quantity	Rejected quantity	Final receipt	Planned inventory transaction
7	0	no	3
7	0	yes	0
7	2	no	5
7	2	yes	0

Confirm Back Orders automatically

If this check box is selected, LN confirms the backorders.

If this check box is cleared, the backorders must be confirmed manually in the Potential Purchase Backorders (tdpur4101m700) session.

Note:

Backorders that are rejected during inspection are not confirmed by LN. You must always confirm these backorders manually.
Backorders that are generated for a directly delivery purchase order are confirmed automatically. You cannot confirm these backorders manually.
This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

Change Reason

The change reason code for the backorder. After the backorder is confirmed, this value is defaulted to the Change Reason field of the Purchase Order Line Details (tdpur4101m200) session if the Default Change Reason Code for Change Order Line field is not specified.

Note:

If the Default Change Reason Code for Change Order Line field is specified, it is used as the default change reason code for the backorder.
This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

Change Type

The change type for the backorder. After the backorder is confirmed, this value is defaulted to the Change Type field of the Purchase Order Line Details (tdpur4101m200) session if the Default Change Type for Change Order Line field is not specified.

Note:

If the Default Change Type for Change Order Line field is specified, it is used as the default change type for the backorder.
This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

Miscellaneous

Method of Calculating Average Purchase Price

The method to calculate the average purchase price.

Note:

If this parameter is set to Purchases (Cum.), use the Equate Balance of Receipts with Inventory Level (tdipu0201m000) session to equate the cumulative receipts with the inventory on hand. The real time average prices for items can be calculated only if this session is run on a timely basis.
This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

Allowed values

Purchases (Cum.)

The average purchase price is based on the following:

The price of a new receipt.
The average price of the cumulated purchases up to the time of the new receipt.

      
APN = ((PR * QR) + (APO * CRO)) ÷  (QR + CRO)

Current Inventory

The average purchase price is based on the following:

The price of a new receipt.
The average price of the current inventory.

      
APN = ((PR * QR) + (APO * ILO)) ÷ (QR + ILO)

APN - Average purchase price (new)
APO - Average purchase price (old)
PR - Price of the new receipt
QR - Quantity of the new receipt
CRO - Cumulative receipt quantity (old)
ILO - Inventory level (old)

Old (current) inventory considers the existing inventory on hand minus the not yet matched and approved receipts. Consequently, the average purchase price is based on financially matched and approved purchase orders.

If the method is set to Current Inventory and the result of the APN calculation is negative, the average purchase price receives the same value as the latest purchase price.

Confirm Receipt as Final

If this check box is selected, each purchase order line receipt is considered as a final receipt. Consequently, for each purchase order line receipt, the Final Receipt check box is automatically set in the Purchase Receipts (tdpur4106m000) session.

Note:

In this way, when confirming receipts, you need not check the received items and manually select the Final Receipt check box. This will speed up the receipt procedure, which can be important if large numbers of receipt transactions are involved. In addition, back orders are always created, because you cannot forget to select the Final Receipt check box.
If this check box is cleared, the Final Receipt check box is automatically selected only if the received quantity is greater than or equal to the ordered quantity for the purchase order line. If the Final Receipt is cleared, but a final receipt is applicable, you must manually select the Final Receipt check box in the Purchase Receipts (tdpur4106m000) session.
You can undo the automatic selection of the Final Receipt check box for an individual receipt to correct the receipt in the Correct Purchase Receipt (tdpur4106s100) session.
This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

Buy-from Business Partner Search

Level 1

The first element of the priority level combination based on which LN searches for approved buy-from business partners for purchase orders.

Note:

This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

This value is used by Enterprise Planning in the buy-from business partner selection process. The following steps are executed:

Enterprise Planning sends the required item (group) and warehouse to Purchase Control .
Purchase Control searches for approved suppliers based on the Search Path defined in this session.
Purchase Control sends all valid business partners to Enterprise Planning , which selects a buy-from business partner.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Search path for approved buy-from business partners.

Allowed values

Single Source Business Partners: LN only searches for buy-from business partners that are fixed for an item (group), which means the item cannot be delivered by any other business partner.
Preferred Business Partners: LN only searches for buy-from business partners that are preferred for an item (group), which means the item can be delivered by several business partners.

Level 2

The second element of the priority level combination based on which LN searches for approved business partners for purchase orders.

Note:

This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

This field is used by Enterprise Planning in the buy-from business partner selection process. The following steps are executed:

Enterprise Planning sends the required item (group) and warehouse to Purchase Control .
Purchase Control searches for approved suppliers based on the Search Path defined in this session.
Purchase Control sends all valid business partners to Enterprise Planning , which selects a buy-from business partner.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Search path for approved buy-from business partners.

Allowed values

Purchase Contracts: LN only searches for buy-from business partners in purchase contracts.
Item Business Partners: LN only searches for buy-from business partners in the item-business partners files.

Level 3

The third element of the priority level combination based on which LN searches for approved business partners for purchase orders.

Note:

This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

This field is used by Enterprise Planning in the buy-from business partner selection process. The following steps are executed:

Enterprise Planning sends the required item (group) and warehouse to Purchase Control .
Purchase Control searches for approved suppliers based on the Search Path defined in this session.
Purchase Control sends all valid business partners to Enterprise Planning , which selects a buy-from business partner.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Search path for approved buy-from business partners.

Allowed values

Central Contracts: LN only searches for buy-from business partners on central contracts.
Decentral Contracts: LN only searches for buy-from business partners on decentral contracts.
Items: In the item-business partners files, LN only searches for buy-from business partners that are linked to an Item.
Item Groups: In the item-business partners files, LN only searches for buy-from business partners that are linked to an Item Group.

Search All Defined Levels

If this check box is selected, LN searches for approved business partners in all defined priority levels.

If this check box is cleared, and an approved business partner is identified in one of the defined priority levels, LN stops the search.

Note:

This value is defaulted from the Purchase Order Parameters (tdpur0100m400) session only if the Use Global Purchase Order Parameters check box is selected.

This field is used by Enterprise Planning in the buy-from business partner selection process. The following steps are completed:

Enterprise Planning sends the required item (group) and warehouse to Purchase Control .
Purchase Control searches for approved suppliers based on the Search Path defined in this session.
Purchase Control sends all valid business partners to Enterprise Planning , which selects a buy-from business partner.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Search path for approved buy-from business partners.

Change Control

Effective Date: The date and time at which the parameter settings are modified.
Last Changed By: The code of the user that last modified the parameter settings.

Use Global Purchase Schedule Parameters

If this check box is selected, the parameter settings specified in the Purchase Schedule Parameters (tdpur0100m500) session are used. If this check box is cleared, you can set the purchase schedule parameters specific to the site.

Buy-from Business Partner Search

Level - BP Sourcing

The first element of the priority level combination based on which LN searches for approved business partners for purchase schedules.

Note:

This value is defaulted from the Purchase Schedule Parameters (tdpur0100m500) session only if the Use Global Purchase Schedule Parameters check box is selected.

This field is used by Enterprise Planning in the buy-from business partner selection process. The following steps are completed:

Enterprise Planning sends the required item (group) and warehouse to Purchase Control .
Purchase Control searches for approved suppliers based on the Search Path defined in this session.
Purchase Control sends all valid business partners to Enterprise Planning , which selects a buy-from business partner.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Search path for approved buy-from business partners.

Allowed values

Single Source Business Partners: LN only searches for buy-from business partners that are fixed for an item (group), which means the item cannot be delivered by any other business partner.
Preferred Business Partners: LN only searches for buy-from business partners that are preferred for an item (group), which means the item can be delivered by several business partners.

Level - Purchase Contract

The second element of the priority level combination based on which LN searches for approved business partners for purchase schedules.

Note:

This value is defaulted from the Purchase Schedule Parameters (tdpur0100m500) session only if the Use Global Purchase Schedule Parameters check box is selected.

This field is used by Enterprise Planning in the buy-from business partner selection process. The following steps are completed:

Enterprise Planning sends the required item (group) and warehouse to Purchase Control .
Purchase Control searches for approved suppliers based on the Search Path defined in this session.
Purchase Control sends all valid business partners to Enterprise Planning , which selects a buy-from business partner.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Search path for approved buy-from business partners.

Allowed values

Central Contracts: LN only searches for buy-from business partners on central contracts.
Decentral Contracts: LN only searches for buy-from business partners on decentral contracts.
Items: In the item-business partners files, LN only searches for buy-from business partners that are linked to an Item.
Item Groups: In the item-business partners files, LN only searches for buy-from business partners that are linked to an Item Group.

Search All Defined Levels

If this check box is selected, LN searches for approved business partners in all defined priority levels.

If this check box is cleared, and an approved business partner is identified in one of the defined priority levels, LN stops the search.

Note:

This value is defaulted from the Purchase Schedule Parameters (tdpur0100m500) session only if the Use Global Purchase Schedule Parameters check box is selected.

This field is used by Enterprise Planning in the buy-from business partner selection process. The following steps are completed:

Enterprise Planning sends the required item (group) and warehouse to Purchase Control .
Purchase Control searches for approved suppliers based on the Search Path defined in this session.
Purchase Control sends all valid business partners to Enterprise Planning , after which Enterprise Planning selects a buy-from business partner.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Search path for approved buy-from business partners.

Change Control

Effective Date: The date and time at which the parameter settings are modified.
Last Changed By: The code of the user that last modified the parameter settings.

Use Global Procurement Pricing Parameters

If this check box is selected, the parameter settings specified in the Pricing Parameters (tdpcg0100m000) session are used. If this check box is cleared, you can set the procurement pricing parameters specific to the site.

Price

Update Default Purchase Price Book

If this check box is selected, the supplier price book is automatically updated when a purchase price is changed, or added in the Items - Purchase (tdipu0101m000) session.

Note: This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Update default price book.

Supplier Price Book

The code of the supplier price book

Note:

This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.
Define a supplier price book if you want to use only one price book for all your buy-from business partners. If the Update Supplier Price Book check box is selected, you can keep the supplier price book up to date.
If you link the supplier price book to a price matrix in the Purchase Price Matrices (tdpcg0130m020) session, you can use the PriceFactor field to have different unit prices for various buy-from business partners.

Price Control

This field determines which purchase price must be used from price books. This price book is based on the price matrix specified in the Purchase Price Matrices (tdpcg0130m020) session.

Select one of these options:

First Price
For a specific matrix definition, LN uses the first price in the price matrix with the most recent effective date.
Lowest Price
For a specific matrix definition, LN retrieves the first price from the price matrix with the most recent effective date. However, if other relevant matrix definitions are applicable, LN continues searching these other price matrices for lower prices. LN uses the lowest price from the price matrix.

Note:

If the Lowest Price is selected, LN does not search each entry (sequence) that is effective for a specific matrix definition in the Purchase Price Matrices (tdpcg0130m020) session. The prices between the matrix definitions of the price matrices are compared. The matrix definitions for which the value in the Order Priority field differs in the Matrix Priorities (tdpcg0120m000) session, are considered.
As the price with the most recent effective date in the price matrix for a specific matrix definition is considered, an exception can be defined by specifying a new entry with a new effective date in the existing price matrix.
This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Price, rate, and discount control.

Example

Settings in the Matrix Priorities (tdpcg0120m000) session for the Purchase Price matrix type:


Priority	1	2
Effectivity period	01/01/2006-31/12/2006	01/01/2006-31/12/2006
Matrix definition	Supplier	Prlist

Price matrices in the Purchase Price Matrices (tdpcg0130m020) session for the Purchase Price matrix type:


Matrix definition	Suppl
Priority	10	20
Effectivity period	01/01/2006-31/12/2006	01/05/2006-30/08/2006
Price in price book	7	10


Matrix definition	Prlist
Priority	10	20
Effectivity period	01/01/2006-31/12/2006	01/06/2006-30/09/2006
Price in price book	8	11

In addition, the following applies:

The Price Control parameter is set to Lowest Price.
An item is purchased on 30 May 2006 and all price matrices are applicable.

LN retrieves the correct price as follows:

For the first applicable matrix definition with Order Priority 1 in the Matrix Priorities (tdpcg0120m000), LN retrieves the price with the most recent effective date in the price matrix . As a result, LN retrieves the price of 10 from the Suppl Matrix.
Because the Price Control parameter is set to Lowest Price, LN continues searching for prices in price matrices to which other relevant matrix definitions are linked that are also stored in the Matrix Priorities (tdpcg0120m000) session. As a result, from the Prlist Matrix, which is stored as Order Priority 2 in the Matrix Priorities (tdpcg0120m000) session, LN retrieves the price with the most recent effective date in the price matrix, which is the price of 8.
LN uses the price of 8, which is the lowest price.

Discount

Purchase Level 1 Discount Control

The level 1 purchase discount.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Price, rate, and discount control.

Allowed values

First Discount: When searching for discounts, LN stops searching the specific discount level as soon as a discount is found.
Best Discount: When searching for discounts, LN searches all matrix definitions of a specific discount level and only returns the best discount.
Accumulate: When searching for discounts, LN searches all matrix definitions of a specific discount level and accumulates the discounts from the matrix definitions.

Note: After searching a specific discount level, LN starts searching for discounts on the next level, if any.

Note: This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.

Purchase Level 2 Discount Control

The level 2purchase discount.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Price, rate, and discount control.

Allowed values

First Discount: When searching for discounts, LN stops searching the specific discount level as soon as a discount is found.
Best Discount: When searching for discounts, LN searches all matrix definitions of a specific discount level and only returns the best discount.
Accumulate: When searching for discounts, LN searches all matrix definitions of a specific discount level and accumulates the discounts from the matrix definitions.

Note: After searching a specific discount level, LN starts searching for discounts on the next level, if any.

Note: This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.

Purchase Level 3 Discount Control

The level 3 purchase discount.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Price, rate, and discount control.

Allowed values

First Discount: When searching for discounts, LN stops searching the specific discount level as soon as a discount is found.
Best Discount: When searching for discounts, LN searches all matrix definitions of a specific discount level and only returns the best discount.
Accumulate: When searching for discounts, LN searches all matrix definitions of a specific discount level and accumulates the discounts from the matrix definitions.

Note: After searching a specific discount level, LN starts searching for discounts on the next level, if any.

Note: This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.

Purchase Level 4 Discount Control

The level 4 purchase discount.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Price, rate, and discount control.

Allowed values

First Discount: When searching for discounts, LN stops searching the specific discount level as soon as a discount is found.
Best Discount: When searching for discounts, LN searches all matrix definitions of a specific discount level and only returns the best discount.
Accumulate: When searching for discounts, LN searches all matrix definitions of a specific discount level and accumulates the discounts from the matrix definitions.

Note: After searching a specific discount level, LN starts searching for discounts on the next level, if any.

Note: This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.

Purchase Level 5 Discount Control

The level 5 purchase discount.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Price, rate, and discount control.

Allowed values

First Discount: When searching for discounts, LN stops searching the specific discount level as soon as a discount is found.
Best Discount: When searching for discounts, LN searches all matrix definitions of a specific discount level and only returns the best discount.
Accumulate: When searching for discounts, LN searches all matrix definitions of a specific discount level and accumulates the discounts from the matrix definitions.

Note: After searching a specific discount level, LN starts searching for discounts on the next level, if any.

Note: This value is defaulted from the Pricing Parameters (tdpcg0100m000) session only if the Use Global Procurement Pricing Parameters check box is selected.

Change Control

Effective Date: The date and time at which the parameter settings are modified.
Last Changed By: The code of the user that last modified the parameter settings.

Use Global Landed Cost Parameters

If this check box is selected, the parameter settings specified in the Landed Costs Parameters (tclct0100m000) session are used. If this check box is cleared, you can set the landed cost parameters specific to the site.

Landed Cost

Method of Calculating Average Landed Cost

The method to calculate the average landed cost.

Note:

To calculate an item's standard cost, the average landed cost can be added to the average purchase price.
If this parameter is set to Cumulative Purchases, use the Equate Balance of Receipts with Inventory Level (tdipu0201m000) session to equate the cumulative receipts with the inventory on hand. The realistic average prices for items can be calculated only if this session is run on a timely basis.
You can view average landed costs by item in the Item Actual Landed Costs (tclct3600m000) session.

Allowed values

Cumulative Purchases

The average landed cost is based on the following:

The price of a new receipt.
The average price of the cumulated purchases up to the time of the new receipt.

      
APN = ((PR * QR) + (APO * CRO)) ÷  (QR + CRO)

Current Inventory

The average landed cos is based on the following:

The price of a new receipt.
The average price of the current inventory level.

      
APN = ((PR * QR) + (APO * ILO)) ÷ (QR + ILO)

APN - Average landed cost (new)
APO - Average landed cost (old)
PR - Price of the new receipt
QR - Quantity of the new receipt
CRO - Cumulative receipt quantity (old)
ILO - Inventory level (old)

Old (current) inventory considers the existing inventory on hand minus the not yet matched and approved receipts. Consequently, the average cost is based on financially matched and approved purchases.

If the method is set to Current Inventory and the APN calculation outcome is negative, the average landed cost is equal to the latest landed cost.

Example

Method of Calculating Average Landed Cost: Cumulative Purchases

Current values for item K:


Cumulative purchase receipts	20 pcs
Average landed cost for cost component A	5 euro
Average landed cost for cost component B	4 euro
Total average landed cost	9 euro

New receipt for item K, all landed costs are invoiced.


Received quantity	2 pcs
Landed cost line for cost component A	7 euro
Landed cost line for cost component C	3 euro

New average landed cost:

Cost component A
(2 x 7) + (20 x 5) / (20 + 2) = 5.18 euro
Cost component B
(2 x 0) + (20 x 4) / (20 + 2) = 3.64 euro
Cost component C
(2 x 3) + (20 x 0) / (20 + 2) = 0.27

New values for item K:


Cumulative purchase receipts	22 pcs
Total average landed cost	9.09 euro

Note: This value is defaulted from the Landed Costs Parameters (tclct0100m000) session only if the Use Global Landed Cost Parameters check box is selected.

Change Control

Effective Date: The date and time at which the parameter settings are modified.
Last Changed By: The code of the user that last modified the parameter settings.

Procurement Settings by Site (tdpur0111m000)

Field Information