Planned Purchase Order in Oracle Purchasing:

A planned purchase order is a long–term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities and estimated cost.

You can issue scheduled releases against a planned purchase order to place the actual orders. If you use encumbrance accounting, you can use the planned purchase order to reserve funds for long term agreements.

You can also change the accounting distributions on each release and the system will reverse the encumbrance for the planned purchase order and create a new encumbrance for the release.

Planned Purchase Order (PPO) Flow:

We will see how to create a PPO & release it.

Navigation: Purchase Orders → Purchase Orders

Select type as ‘Planned Purchase Order’ & fill other header details. Enter Item, Quantity, Price and Promised / Need By date.

Click ‘Terms’ tab & enter ‘Amount Limit’ (total of all releases) and ‘Minimum Release’ (the least amount a release must have) amount.

Get the Planned Purchase order approved.

Next step is to create Releases.

Navigation: Purchase Orders → Releases

Enter the Planned Purchase Order Number, Line No., Shipment No., Quantity & Save.

Click ‘Agreement’ tab to cross verify the Amount Limit, Minimum Release & Total Released amount against this PPO.

Approve the Release.

Query the Planned Purchase Order and click ‘Agreement’ tab to see the details of releases made.

How to Override Planned Purchase Order price in Releases ?

In ‘Price Reference’ tab of PPO, Enable ‘Allow Price Override’ checkbox & enter the ‘Price Limit’ until which the Item price can be modified in releases.

 The Original Price in our PPO is INR 12/- & now we have given the price limit as INR 15/-

On saving, system will display a pop up message stating we are creating a new document revision. Click OK.

 The status will change to ‘Requires Reapproval’. Again Approve the PPO.

When we release the PPO, the ‘Price’ field will not be grayed out like before. System will allow us to change the Price.

I am changing the price to INR 16/- (we have given the price limit as INR 15/-). Since the price entered is greater than the Price limit system displays the below error message.

Change the Price to any value lesser or equal to Price Limit, save & approve the release.

Once a Release is approved, Receipt for the Released Quantity can be taken.

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