What is the first step in the source determination sequence when creating a purchase requisition?

The first step in the source determination sequence when creating a purchase requisition is to check for availability under the quota arrangement. Quota arrangements allow a company to negotiate specific terms with suppliers and allocate certain quantities to them in advance, which can simplify the procurement process. By using a quota arrangement, the system can streamline the source determination process by allocating needs across multiple suppliers efficiently according to the pre-established ratios.

The process begins with the quota arrangement because it establishes the foundation for supplier selection based on the predefined criteria and priorities set for procurement. It ensures that the purchasing organization adheres to the agreed framework before considering other options, nurturing effective supplier relationships and potentially improving negotiations.

In the context of the overall source determination sequence, other options such as source list, outline agreement item, and info record serve their own roles but come into play subsequently in the process after establishing quotas. Understanding the role of quota arrangements helps users appreciate their importance in supporting strategic sourcing decisions within the procurement function.