Purchase Terms

The Purchase Terms connect a stock item to its vendors. One item can have many purchase terms. These are used for auto-filling Purchase Orders, and for lead time and cost estimation when items are not in stock.

Jump to:

1. Create a Purchase Term.
2. Convert a vendor's unit of measurement.
3. How to enter pricing tiers for purchased items?
4. How are Purchase Terms used to auto-fill POs?
5. How are Purchase Terms used when estimating the cost of an out-of-stock item?
6. How to update Purchase Terms?
7. How to import Purchase Terms in bulk?

Saving a Purchase Term

1. Open the article details in Stock -> Items.
2. Scroll down to the Purchase Terms table. (If you do not see it, mark the checkbox for This is a procured item)
3. Click Add a vendor Add to add a new Purchase Term.
4. Fill in the details.
5. Save.

Take note:

• The lead time is measured in business days. The number of business days per week is defined by Settings -> System settings -> Work hours.
• A higher number in the Priority field indicates higher priority.

Conversion from a vendor's unit of measurement

If the vendor has another unit of measurement than used in your stock:

1. Go to Purchase terms at the bottom of Item details, and click View.
2. Check the option Vendor-specific unit of measurement.
3. Enter the name of the unit to the Vendor's UoM, e.g. 1 box.
4. If the unit of measure is indivisible, select the option Indivisible UoM. Then a decimal quantity will be rounded up.
5. set the Conversion rate, e.g. 40 pcs = 1 box.

When a purchase order is created, then the PO will show the vendor's unit of measurement which will be converted into your internal unit.

Entering price brakes or pricing tiers from a vendor

To enter price brakes from one vendor, enter several purchase terms with the same vendor, and for each define the Minimal order quantity of the pricing tier. MRPeasy will understand, according to the PO quantity, which tier to choose. MRPeasy will choose the correct tier according to the PO quantity.

Example, 4 pricing tiers

Use of Purchase Terms when Creating Purchase Orders

When adding a Part to a purchase order:

• If it has one vendor, all details will be filled in automatically.
• If it has several vendors, its vendors will be highlighted in bold. After choosing the vendor, all details will be filled in automatically.
• If you choose a Vendor, then the parts from this vendor will be highlighted in bold. After choosing the part, all details will be filled in automatically.
• If a Vendor part number is chosen, only purchase terms with the same vendor part number are compared.

How the suitable Purchase Term is chosen:

1. The purchase term with the highest priority, which satisfies the Minimal Order Quantity, is chosen.
2. If there are several terms with equal priority, which all satisfy the Minimal Order Quantity, then the lower price term is chosen.
3. If no supply terms meet the minimum quantity requirement, the term with the highest priority is used. If in this situation there are several terms with the highest priority the lower price term is chosen.

For example, if an item has four purchase terms:

Then, if the order quantity is

• greater than 100, the price is set to 4.
• less than 100, but greater than 20, the price is set to 5.
• less than 20, the price is set to 6.

Use of Purchase Terms when estimating the cost of out-of-stock items

When creating a Manufacturing Order and materials are not in stock, then the purchase term selection corresponds to the use of purchase terms when creating Purchase Orders.

At Stock -> Items page column "Cost", BOM cost estimation, and CO cost estimation, when the item is not in stock, the cost of the procured item is found as follows:

• The software selects the purchase term with the highest priority.
• If several purchase terms have the same priority, the lowest price is selected.
• Minimal order quantities are ignored.

Uploading and updating Purchase Terms

Updating Purchase Terms:

1. When a purchase order is saved and an item has only one purchase term, then MRPeasy will use the price from the purchase order to automatically update the purchase term.
   To disable this functionality, please go to Settings -> System Settings -> Software settings, and change the setting Update purchase terms from PO to No.
2. It's possible to bulk update purchase terms at Procurement -> Vendor -> Particular vendor's reports: Purchase terms.
3. To upload new purchase terms for existing items from a CSV file, or to update existing ones, please go to Procurement -> Vendors -> Import from CSV.