Functionality of Quota Arrangement in

Production

In addition to the Blog posted by Mr. Anupam Sharma Production version-Alternate BOM selection-Quota
arrangement and Mr Rajen http://scn.sap.com/community/erp/manufacturing-pp/blog/2013/08/15/alternative-
bom-selection-a-workaround like to share some more inputs on Quota Functionality in Production.
Quota Arrangement:
If a material can be obtained from various sources of supply, each individual source of supply can be
allocated a quota arrangement. The quota arrangement is valid for a certain period of time and specifies
exactly how the receipts are to be distributed amongst each source of supply.
We can set quota arrangement for in-house production as well as for external procurement.

Scenario 1:
Demand of Finished Product for calender year is 1100 qty. Out of this 60% to be procured and 40 % to
be in-house manufactured. Accordingly the requirement of BOM components of finished product to be
procured.

Test data:
Quota Material(FERT) - M-800, BOM Component (ROH1) -T-T029, BOM Component (ROH2) -100-210

Process Steps:
1. Create Material Master and Maintain Quota settings (Tcode : MM01/MM02)
2. Maintain Purchase Info Record ( Tcode: ME11)
3. Maintain Quota percentage for the calendar year (Tcode : MEQ1)
4. Maintain Planned independent requirements(PIR) (Tcode: MD61)
5. Run MRP( Tcode : MD02)
6. Stock Requirements list (MD04)

Process Steps with screen shots:

Create Material Master and Maintain Quota settings (Tcode : MM01/MM02):

For FERT material for which Quota needs to be planned. Below are the material master settings:
Lot Size - ES ( Lot for lot order quantity with splitting. (This setting is mandatory for triggering the procurement
and in-house production)
Procurement Type -X
Quota arr usage - 4
Purchasing view to be selected

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Functionality of Quota Arrangement in Production

Lot Size ES -Config:

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Functionality of Quota Arrangement in Production

Maintain Info Record for the material (Tcode : MEQ1)

Info record as given below maintained for the FERT material M-800.

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Functionality of Quota Arrangement in Production

Maintain Quota percentage for the calendar year (Tcode : MEQ1)

Quota maintained for the FERT material M-800 as given below:
Procurement - 60%
In-house - 40%

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Functionality of Quota Arrangement in Production

Maintain Planned independent requirements(PIR) (Tcode: MD61)

PIR maintained for the FERT material M-800 for 1100 qty.

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Run MRP( Tcode : MD02)

MRP executed for FERT M-800 through MD02 tcode.

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Stock Requirements list (MD04)

As per quota settings system should calculate as given below:
Procurement Qty - 1100 * 60/100 = 660
In house Qty - 1100 * 40/100 = 440.

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If we click on the Quota arrangement button it will display the allocated quota as given below:

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Functionality of Quota Arrangement in Production

As 60 % is procured and 40% only is manufactured, requirement of raw material to be planned for only
40% of in-house manufacturing.
Requirement of Raw Material T-T029 is as follows:
FERT In-house PIR Qty (440) * BOM Ratio (2) = 880 Qty. So PR triggered for 880 Qty as given below:

Requirement of Raw Material 100-210 is as follows:

FERT In-house PIR Qty (440) * BOM Ratio (2) = 880 Qty. Stock available is 500. Net requirement = 880 -500 =
380.
So PR triggered for 880 Qty as given below:

Conclusion:
By defining Quota % , accordingly system will calculate the procurement proposals and in-house
production qty. Subsequently system will plan the lower level raw materials qty only for in-house qty
requirement.

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Functionality of Quota Arrangement in Production

Scenario 2:
Demand of Finished Product for calender year is 1100 qty. Out of this 60% to be procured and 40 % to
be in-house manufactured. Also Quota is defined for one of the raw material which is BOM item of the
FERT quota material. Raw material Quota is maintained as 70 % for Vendor 1 and 30% for Vendor 2.

Process Steps:
1. Create Material Master and Maintain Quota settings (Tcode : MM01/MM02)
2. Create Info Record for the Raw Material (ME11)
3. Maintain Quota percentage for the calendar year (Tcode : MEQ1) for FERT and ROH material.
4. Maintain Planned independent requirements(PIR) (Tcode: MD61) for FERT
5. Run MRP( Tcode : MD02)
6. Stock Requirements list (MD04)

Process Steps with screen shots:

Create Material Master and Maintain Quota settings (Tcode : MM01/MM02): ( For Raw Material T-T029)
Lot Size -EX
Quota arrg usage - 3

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Lot Size EX Config:

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Maintain Quota percentage for the calendar year (Tcode : MEQ1)

Quota % maintained for the raw material as 70% for Vendor 130 and 30% for Vendor 137.

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PIR maintained in MD61 for FERT material as per scenario 1 and MRP executed in MD02
Stock Requirements list (MD04)
As 60 % is procured and 40% only is manufactured, requirement of raw material to be planned for only
40% of in-house manufacturing
Also Raw material T-T029 quota maintained as 70% for Vendor 130 and 30 % for Vendor 137
Requirement of Raw Material T-T029 is as follows:
PR for Vendor 130 = FERT In-house PIR Qty (440) * BOM Ratio (2) = 880 Qty * 70 % = 616 Qty system
generated PR for vendor 130
PR for Vendor 137 = FERT In-house PIR Qty (440) * BOM Ratio (2) = 880 Qty * 30 % = 264 Qty system
generated PR for vendor 137

Accordingly Quota is allocated as given below:

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Conclusion:
Purchase Requisition triggered for various source of supply based on Quota defined for the material.
Generated PR qty consists of quota % maintained at raw material level for the in-house demand.

Also, read the SAP Note 1508647 - MRP does not consider the quota arrangement and 1947519 -
Rounding with the split quota always allocates the rest to the first vendor

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