Question no 3908 : Reference Purchasing Organization

In SAP MM as at ECC6.0 EhP6, the purpose of a Reference Purchasing Organization is for which of the following ?

(more than one answers)

A)  Create Purchase Order with reference to a Contract created by another Purchasing Organization.
B)  Copy Plant condition Prices from Central Contract to the Purchase Order.
C)  Allow source determination for Outline Agreements.
D)  Create Scheduling Agreement with reference to a Contract created by another Purchasing Organization.
E)  Copy Plant condition Prices from Central Contract to the Scheduling Agreement.
.

Answers: A, B

Its for Central Contract Scenario with Purchasing Organization for the Contract as a Reference Purchasing Organization so that Purchase Order created by another Purchasing Organization can be referenced to it.

In the IMG Enterprise assignment configuration, if Purchasing Organization 1000 is the Reference Purchasing Organization assigned to another Purchasing Organization for example 1200. Then Purchasing Organization 1200 will be able to create a Purchase Order to a Contract issued by Purchasing Organization 1000. 

An industrial example:

Purchasing Organization C100 is the Japan HQ Central Purchasing which is responsible for a Central Contract to a vendor in Indonesia that will supply to factories in Thailand, Malaysia, and Singapore. 

The company also have country specific Purchasing Organizations in the 3 countries respectively; that is example Purchasing Org 1000 for Thailand, Purchasing Org 1100 for Malaysia, and Purchasing Org 1200 for Singapore. 

The Central Contract issued by Japan Purchasing Org C100 will be a blanket quantity eg: 10,000,000 pcs for 3 years, the Central Contract was issued without Plant. Each Purchasing Org for the 3 South East Asian Countries will then issued Purchase Order against the Central Contract for the Quantity required for the Plants in their respective countries. In this case the Pur Org for the PO will be different from the Pur Org in the Central Contract. 

In order to support the scenario above, Purchasing Org 1000 must be assigned as Reference Purchasing Org to Purchasing Org 1100, 1200, and 1300 in the IMG.

The Configurations required for this scenario (a different example):

Note there are 2 parameters in this IMG:

1) "Release Order" means Pur Org 1000 is allowed to issued a Purchase Order with reference to a Contract created by Reference Pur Org C100.

2) "Conditions" means that the Plant Conditions set in the Central Contract issued by Reference Pur Og C100 can be copied to the Pur Org 1000 (if this is not set, then Pur Org must negotiate own Prices with the vendor and at least create a Purchasing Info Record by Pur Org 1000 to that vendor). 

You may want to check out this LINK to a SAP DEMO example of Reference Purchasing Organization for Central Contract Scenario.