| # Select business partner for consumption issue If various suppliers supply the same item, and inventory owned by each of these business partners is stored in the warehouse, LN must determine from whose inventory the items will be issued for consumption. The following example shows how LN selects the business partner. Item X is supplied by buy-from business partners BP1, BP2, and BP3. For item X, the business partners have the following sourcing percentages:
Buy-from business partner | Sourcing priority | Sourcing percentage
BP1 | 1 | 15
BP2 | 1 | 35
BP3 | 1 | 50
The following table shows the business partners issuing for consumptions, the cumulative consumption quantities and cumulative consumption percentages by business partner. For the first consumption instance, it is presumed that no previous consumptions have taken place. When a consumption is due, LN selects the business partner whose sourcing percentage exceeds the actual cumulative consumption percentage the most. To increase the actual consumption percentage to meet, or at least approach the agreed sourcing percentage, this business partner must supply the next consumption. In the following table, this is shown by means of negative differences between actual percentages and sourcing percentages. If the difference between the actual consumption percentage and the sourcing percentage is negative, the sourcing percentage exceeds the actual percentage. The business partner with the largest negative difference will issue for the next consumption.
Consumption | Consumed BP1 | Consumed BP2 | Consumed BP3 | Description
--- | --- | --- | --- | ---
| Qty | % | Qty | % | Qty | % |
100 | 0 | 0% | 0 | 0 | 100 | 100 | Before the first consumption, the consumption percentage for each business partner is 0%. The difference between the actual consumption percentage and the sourcing percentage is the greatest for BP3 (0 - 50 = -50). Therefore, the first consumption of 100 items X is to be issued from inventory owned by BP3.
150 | 0 | 0 | 150 | 60 | 100 | 40 | After the first consumption, the difference between the actual consumption percentage and the sourcing percentage is the greatest for BP2: 0-35 = -35. (BP1: 0 - 15 = -15, BP3: 100-50 = 50) Therefore, 150 items X are supplied from BP2.
50 | 50 | 16.7 | 150 | 50 | 100 | 33.3 | After the second consumption, the difference between the actual consumption percentage and the sourcing percentage is the greatest for BP1: 0 - 15 = -15. (BP2: 60 - 35 = 25, BP3: 40 - 50 = -10). Therefore, 50 items X are supplied from BP1.
150 | 50 | 11.1 | 150 | 33.3 | 250 | 55.6 | After the third consumption, the difference between the actual consumption percentage and the sourcing percentage is the greatest for BP3: 33.3 - 50 = -16.7. (BP1: 16.7 - 15 = 1.7, BP2: 50 - 35 = 15). Therefore, 150 items X are supplied from BP3.
75 | 125 | 23.8 | 150 | 28.6 | 250 | 47.6 | After the fourth consumption, the difference between the actual consumption percentage and the sourcing percentage is the greatest for BP1: 11.1 - 15 = -3.9. (BP2: 33.3 - 35 = - 1.7, BP3: 55.6 - 50 = 5.6). Therefore, 75 items X are supplied from BP1.
Related topics Inventory ownership in Warehouse Management |