Contract

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  • 1. Contract S A P
  • 2. Contract
    • Is a form of long term purchase agreement.
    • Between a company and vendor.
    • Against contract materials or services purchased over a predefined period according to the need.
    • It is a part of outline agreement.
    • Scheduling agreement is another contract form.
  • 3. A contract can be created manually with out any reference. It also can be created from or with reference of Purchase Requisition (PR), Request For Quotation (RFQ). Can also be created from another contract.
  • 4. Contract can be quantity contract, value contract or centrally agreed contract.
    • Quantity contract: This type of contract is made once the total quantity to be purchased is arrived at.
    • The total supply quantity reaches the total agreed quantity, contract is fulfilled and closed.
  • 5. Quantity contract: This type of contract is made once the total quantity to be purchased is arrived at. The total supply quantity reaches the total agreed quantity, contract is fulfilled and closed.
  • 6. Value contract: This type of contract is made once the total value to be purchased is arrived at. The total supply value reaches the total agreed value, contract is fulfilled and closed.
  • 7. If the plant is not entered in header data, the same can be used by any other plant for which the purchase organization is responsible for. Such plant independent contracts are called as centrally agreed contracts.
  • 8. Contract release order: A purchase order is always issued to a vendor for the required quantity of material with required date of delivery
  • 9. Contract can be entered as source of supply in purchase requisition (PR). Thank you