Over/Under Delivery
X Entertainment Systems has run low on its stock of 6001, Box –
corrugated, 16X18X40. The purchasing agent puts in an order with the vendor
for 1000 pieces. Typically, there is a 1 to 2 percent variance on the number of
lamp projectors received when ordering from this vendor. However, they offer
the best price. Because of the variance, Contoso Entertainment Systems and the
vendor have agreed to set up an over/under delivery variance to allow for a
difference of 10 percent because it is not cost-effective for either company to
create new orders or credit memos.
When the order arrives, there are 1018 pieces in the order. The order is accepted
because it is in the range that is specified in the over/under delivery setup.
Six months later, the stock is down to 500 so another order is made for 500 from
the same vendor. This time, the order contains 492 pieces. Again, the order is
accepted because it is in the range of over/under delivery setup.
Set up an item to accept over/under delivery by using a two-step process:
1. Set up Accounts receivable and Procurement and sourcing
parameters to accept over/under delivery.
2. Define the acceptable tolerance percentage for over/under delivery
on the item.
Parameters
To perform the first step in the over/under delivery setup, you must set up the
appropriate parameter for both the Accounts receivable and Accounts payable
modules. These settings are global and affect all sales orders and purchase orders.
• To set up the parameters for sales orders, open Accounts receivable
> Setup > Accounts receivable parameters.
• To set up the parameters for purchase orders, open Procurement
and sourcing> Setup > Procurement and sourcing parameters.
Accept Over/Under Delivery
For both setup areas, on the Updates tab, under the General field group, set the
global parameter to allow for over delivery, under delivery, or both.
• If you select Accept overdelivery, you can receive or sell more
products through the packing slip / product receipt or invoice update
than the quantity ordered in the purchase or sales line.
• If you select Accept underdelivery, you can close out the backorder
if you receive or sell fewer products through the packing slip /
product receipt or invoice update than the quantity ordered in the
purchase line or sales line.
Under Delivery with a Purchase Order
X Entertainment Systems needs 7000 pieces of item number 5012, 4-40
zinc nuts, in the production. To make sure that the items can go into production
immediately, the purchasing agent orders a quantity of 9000 in case any of the
items are defective.
1. Open Procurement and sourcing > Common > Purchase orders >
All purchase orders and then create a new purchase order for 9000
4-40 zinc nuts from vendor 4101, Fabrikam Supplier. Confirm the
order.
The vendor can deliver 8000 pieces. However, because this meets
the current needs, you tell the vendor not to deliver the backorder for
the 1000 pieces. Now you want to receive the 8000 pieces and close
the order so no backorders remain.
2. When the order line is highlighted in the purchase order, enter the
8000 pieces in the Receive now field.
3. Click Product receipt in the Receive tab of the Action Pane.
4. In the Posting product receipt form, make sure that Receive now
quantity is selected in the Quantity field under the Parameters field
group.
5. Type a product receipt number in the Product receipt field.
6. On the Lines tab, select the Close for receipt check box to close the
order and then click OK.Notice that the error provides you the calculated percent of the quantity that you
are trying to post. To manually override the default item tolerance settings and
close this order, you must return to the purchase order.
8. Highlight the purchase order line and then click the Delivery tab in
the Line details FastTab. Specify the value from the error 12.00 in
the Underdelivery field. Remember that the number in this field
represents a percent, not pieces. The Receive now quantity must still
be 8000 pieces.
9. Click Confirm on the Purchase tab of the Action Pane.
10. Click Product receipt in the Receive tab of the Action Pane.
11. Type a product receipt number in the Product receipt field.
12. On the Lines tab, select the Close for receipt check box to close the
order and then click OK.
This time, the order is posted and the order status changes to Received and there
is no backorder.
To view the transactions on the purchase order, follow these steps:
1. Click Product receipt in the Journal group on the Receive tab of
the Action Pane.
2. Click the Lines tab and notice that 9,000 are ordered and 8,000 have
are received. Also, there is no
Over Delivery with a Sales Order
Customer 2021, Graphic Design Training Center, orders 90 pieces of item
number 1301, with configuration 01. A long-standing relationship with this
customer is established and this is a typical order for them.
During a production of 90 pieces, you sometimes have scrap and nonconforming
parts. To accommodate this, you always do a production run of 100 pieces. The
customer recognizes this and accepts that you can ship a bit less or more and has
decided on a 5 percent tolerance, over or under, on an order of 90 pieces.
1. Open Product information management > Common > Released
products and locate item number 1301.
2. Click Edit in the Maintain group on the Action Pane.
3. On the Sell FastTab, set up an over delivery tolerance of five percent
and an under delivery tolerance of five percent for sales orders so
that, order lines can be closed when the quantity falls within five
percent of what is ordered.
4. Close the Released product details form.
5. Open Sales and marketing > Common > Sales orders > All sales
orders.
6. Click Sales order in the New group to create a new sales order for
customer 2021, Graphic Design Training Center.
7. Add an order line for 90 pieces of the item number 1301,
configuration 01 (black) for customer 2021. Click No to override the
suggested order quantity.
8. Click Sales order confirmation in the Generate group on the Sell
FastTab of the Action Pane.
9. Click OK to confirm the sales order.
After a production run, you can ship all 100 pieces of item number 1301 –black,
to the customer Graphic Design Center. Ship these pieces and close the order.
1. Highlight the sales order line and then type "100" in the Deliver now
field.
2. Click Packing slip in the Generate group of the Pick and Pack tab
of the Action Pane to packing slip update the order.
3. In the Packing slip posting form, make sure Deliver now is selected
in the Quantity field under the Parameters field group.
4. On the Lines tab, select the Close check box to close the order and
then click OK.
The posting is rejected and gives the error Overdelivery of line is 11.11 percent,
but the allowed overdelivery is only 5.00 percent. Update has been canceled.
Notice that the error gives the calculated percent of the quantity you are trying to
post.
Knowing that the customer will not accept this order, you will reduce the number
of product to send to the customer. Now try to packing slip update the order to
ship the customer 92 pieces.
1. Highlight the sales order line and type "92" in the Deliver now field.
2. Click Packing slip in the Generate group of the Pick and Pack tab
of the Action Pane to packing slip update the order.
3. Select Deliver now in the Quantity field.
4. On the Lines tab, select The order is posted, the 92 pieces are shipped to the customer, and the order
status changes to Delivered.
To view the transactions on the sales order, follow these steps:
1. Click Packing slip in the Journal group on the Pick and pack tab.
2. Click the Lines tab and notice that 90 are ordered and 92 are
delivered.
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