In this post I will demonstrate how trade agreement can be used in combination with master planning in Dynamics 365 for Finance and Operations. Master planning is able to take the trade agreement lead time and prices in to consideration. The master planning parameter ‘search criterion’ will determine whether the lead time or lowest price must take precedence when running master planning.
The below trade agreements have been configured for ProductA.
The trade agreement contains two lines for supplier 10001 and a single line for supplier 10002. Supplier 10001 is more favourable when purchasing more then 10,000 units but has a less favourable lead time in comparison to supplier 10002. Which has an average price but a slightly faster lead time than supplier 10001.
To perform our test ProductA has been configured without a default vendor and with a minimum stock requirement of 1,000 units and a demand forecast of 10,000 units. I have created a demand forecast in the future. This way the demand forecast won’t be consolidated in a single planned order but two planned order will be created. One for the item coverage and one for the demand forecast.
Results
Now for the results. Let’s first examine the results with the master planning parameters set to Lowest unit price.
The first line is planned for vendor 10002, since it’s the cheapest price for the purchased quantity.
Vendor 10001 is selected for the second line. That’s because of the cheaper price when buying over 1,000 units.
Let’s switch the parameter and see what happens to the planned orders
After regenerating master planning, the planned order have been updated.
The accounts selected per row have now been switched. Vendor 10001 is now selected for the smaller order and vendor 10002 has been selected for the bigger order.
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