What is quota arrangement in SAP SRM - Supplier Relationship Management?

SAP Term: quota arrangement

• Component: SRM

• Component Name: Supplier Relationship Management

• Description: An algorithm with which the system determines the sources of supply for a purchase requisition. The quota arrangement defines percentages according to which the system assigns purchase contracts as the source of supply. By setting quotas, you can automatically distribute the purchase requisitions for the duration of a validity time period to different sources.

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• Key Concepts: 
  Quota Arrangement is a feature of SAP Supplier Relationship Management (SRM) that allows companies to set up and manage agreements with suppliers. It enables companies to define the terms of their agreements, such as the quantity and quality of goods or services to be provided, the delivery schedule, and the payment terms. Quota Arrangements also provide a way for companies to track and monitor their suppliers’ performance. 
  
  How to use it: 
  To use Quota Arrangement in SAP SRM, companies must first create a Quota Arrangement document. This document contains all the details of the agreement between the company and its supplier, including the quantity and quality of goods or services to be provided, the delivery schedule, and the payment terms. Once the document is created, it can be used to track and monitor supplier performance. Companies can also use Quota Arrangements to manage their supplier relationships by setting up alerts for when certain conditions are met or exceeded. 
  
  Tips & Tricks: 
  When setting up a Quota Arrangement in SAP SRM, it is important to ensure that all details are accurate and up-to-date. This will help ensure that suppliers are meeting their obligations and that companies are getting the best value for their money. Additionally, companies should regularly review their Quota Arrangements to ensure that they are still relevant and up-to-date. 
  
  Related Information: 
  For more information on Quota Arrangements in SAP SRM, please refer to the official SAP documentation here: https://help.sap.com/viewer/product/SRM/7.5/en-US/f9f8d3a2b6c14e8a9f3d7c2b3e7f9a1d.html