Setting Up: Procured Items, Purchase Terms

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Transcript:

Hi, in this video, we will show you how to set up items that you procure from your vendors.

We will enter the materials for our product “wooden table,” which is made of four legs, one tabletop and half a liter of varnish.

Let’s start with the table leg.

Go to the “Stock” section and add a new item.

We will create a new product group called “Parts.”

We will define our unit of measure – “Pieces.”

We will mark this as a procured item and set a default storage location for it. 

The reorder point, which is the inventory level below which we want to get an alert, is 40 pieces.

Hit “save.”

Now, we will define the purchase terms.

First, let’s add a vendor, “Red Wood Inc.”

We can also predefine a default lead-time for this vendor and other details.

Please note that the lead-time for the materials is determined in business days and not in calendar days. For example, in case of a 5-day workweek, a 10-day lead time is two weeks.

Let’s enter the price of one piece and a minimum order quantity.

We will add another purchase term for a discount price when a larger quantity is bought.

Later, when the purchase order is entered, the system will automatically select the correct predefined price based on the order quantity.

The “table leg” is set up. Let’s set up the item for the “table top.”

We will copy the “table leg” item and only change the attributes that are different.

We will also add some other vendors for the table top: the “Green Wood Inc.” and “Blue Wood Inc.” with their purchase terms.

In the purchase term, we will add the vendor part number. It will be shown in the purchase order for the vendor.

Now we have different purchase terms for table top, with different priorities and prices.

When the system estimates the procured items cost, the purchase terms with the highest priority will be used.

When there are several purchase terms with the same priority, the lowest price is used.

Lastly, we will create the item for “varnish.”

We will define a new unit of measurement – “liters.”

We purchase varnish in bottles of 5 liters. We will set up the purchase terms, so we can send our vendor a purchase order in units of bottles and these will automatically convert to liters in our stock management.

In this video, we demonstrated how to set up procured items, purchase terms and vendors.

Thank you for watching!

To learn more about the functionality of MRPeasy, please see our other videos!