This article will describe how the Vendor and the Unit Cost of an item is derived on a Purchase Requisition during the Inventory Reorder process. There are multiple places which are considered, a purchase contract, the inventory Primary Vendor, the records in the Inventory Vendors table which may be defined at the site or organization level, it also considers the Default Vendor field.

To illustrate how Maximo uses the various records I will start with a new item record with no references to a vendor, this is the last option to be considered, I’ll then work back towards a purchasing contract record which is the first place that Maximo looks to find a vendor and unit cost. Each subsequent step should replace the selection based on the previous step. This may seem a backwards way to explain the order used, but it does allow me to demonstrate the order without deleting, modifying or making inactive any records that I had previously entered. I’ll finish the article with a summary which describes the order that I think Maximo uses.

There is an IBM article that explains the reorder logic https://www.ibm.com/support/pages/reorder-vendor-and-cost-logic. However, in the tests I performed I did observe slight differences.

I have decided to focus this article only on the inventory reorder routines and I’ll do a separate article focused on direct issues. Incidentally, the Primary Vendor is the vendor used during inventory reorders, the Default Vendor is used for direct issue items and services. I thought for a long time that this was a clear distinction, but I did find that the inventory reorder also considers the inventory vendor record marked as the Default Vendor for the item. 

The Default Vendor is an organization level setting, only one vendor can be selected as the default per organization. The inventory vendors table may have records defined at the site level, or organization level if the site field is left null. I’ll show that site level records are being considered before organization level records. 

In each step, I’ll show a screenshot of the inventory record and then I’ll describe what I observed on the Purchase Requisition that was created after using the Reorder Items action. I’m using the setting Ignore Reorder Point, the quantity to order will always be one.

Reorder a new inventory item with no vendor details

I’ve created a new Item Master record AJE11 – Outdoor LED Floodlight with sensor, 50W, with Order Unit and Issue Unit of EACH. I added the item to the CENTRAL storeroom in the BEDFORD site and changed the status to ACTIVE at set, organization and storeroom levels. It was given a Unit Cost of $25.00 during the Add Items to Storeroom dialog.

There are no Vendor details for this item.

When I use the Reorder Items action the Purchase Requisition created had no vendor and the unit cost was zero. There are no Contracts or Inventory Vendor records on which to derive a vendor or unit cost. It does not use the Standard or Average Cost fields.

Reorder an inventory item with an inventory vendor record

I have created an Inventory Vendor record with vendor ATI-R and entered a Manufacturer, Model and Catalog #. The Last Price was set to $30.00 and Last Order Date 10^th June 2024. It is an organization level record, SiteA structural element of a Maximo database that is used for data separation. More is null.

When I use the Reorder Items action the Purchase Requisition created was for vendor ATI-R and the unit cost was $30.00. There are no Contracts, and the Primary Vendor is not defined yet. The Manufacturer, Model and Catalog # were copied onto the PR line from the fields on the Inventory Vendor record.

Reorder an inventory item with multiple inventory vendor records

I have created an additional Inventory Vendor record with vendor EMI and entered a Manufacturer, Model and Catalog #. The Last Price was set to $32.00 and Last Order Date 12^th June 2024. It is an organization level record, Site is null. We have now two inventory vendor records, with the latest record being at a higher price.

When I use the Reorder Items action the Purchase Requisition created was for vendor EMI and the unit cost was $32.00. There are no Contracts, and the Primary Vendor is not yet defined. The Manufacturer, Model and Catalog # were copied from the EMI Inventory Vendor record.

I did do a few other tests varying the Last Price and Last Ordered Date and each time the record with the latest Last Ordered Date was selected. Note. After these tests I did reset the records so that the Last Price is now set to be $32.00 and Last Ordered Date is 12^th June 2024.

Reorder an inventory item with multiple inventory vendor records, one at the Site level

I’ve now added a third Inventory Vendor record, a second for vendor ATI-R but this one is at the Site level, it references Site BEDFORD, the same site as the storeroom. Its Last Price is $31.00 and Last Ordered Date is 11^th June 2024, this positions it between both other Inventory Vendor records both in terms of price paid and when last ordered.

When I use the Reorder Items action the Purchase Requisition created was for vendor ATI-R and the unit cost was $31.00. There are no Contracts, and the Primary Vendor is not yet defined. The Manufacturer, Model and Catalog # were copied from the ATI-R Inventory Vendor record which had the Last Price of $31.00.

This illustrates that if there is no Purchase Contract, Primary Vendor or Default Vendor, Maximo will consider Inventory Vendor records at the site level with the same site as the storeroom, before it considers organizational level records.

Reorder an inventory item with multiple inventory vendor records, two at the Site level

I’ve now added a fourth Inventory Vendor record, a second for vendor EMI but this one is also at the Site level, it references Site BEDFORD, the same site as the storeroom. Its Last Price is $21.00 and Last Order Date is 12^th June 2024. There are now two inventory vendor records at the site level, and I am presuming the one with the latest Last Order Date will be used for the vendor and price.

I was correct in my assumption, the Inventory Vendor record selected created a Purchase Requisition against vendor EMI and the unit cost was $21.00

Reorder an inventory item with multiple inventory vendor records, one set as the Default Vendor

I’ve selected the Inventory Vendor record which was the first to be created for item AJE11 and marked it as the Default Vendor. It is for Vendor ATI-R and is at the OrganizationA structural element of a Maximo database which is used for data sharing. More level, with a null Site. Of the four Inventory Vendor records this had least priority, but does Default Vendor change this?

It does, when I use the Reorder Items action the Purchase Requisition created was for vendor ATI-R and the unit cost was $30.00. There are no Contracts, and the Primary Vendor is not yet defined. The Manufacturer, Model and Catalog # were copied from the ATI-R Inventory Vendor record marked as the Default Vendor.

This shows that the Default Vendor, at the organization level, takes priority over other inventory vendor records defined at the site level. You need to be a bit careful with this, an organization level record taking priority over site level records is a bit unusual, and my advice would be do not set the Default Vendor on storeroom items, keep it for use with non-stocked items that are not in inventory. The difficulty will be if some sites of the same organization treat an item as direct issue, and others as a storeroom item, but we’ll see that using the Primary Vendor or Purchase Contracts can overcome this.

Reorder an inventory item with a Primary Vendor

When you enter a Primary Vendor Maximo creates an Inventory Vendor record and copies the Manufacturer, Model and Catalog #. There will be no Last Price, but the Last Ordered Date will be set to today, 14^th June 2024. It is defined at the site level against the storeroom’s site, BEDFORD.

If you change one of the four fields in the Primary Vendor section Maximo creates another Inventory Vendor record. I changed the Catalog # from 7124165 to 7124166. There are now six Inventory Vendor records, two for vendor IR.

When I use the Reorder Items action the Purchase Requisition created was for vendor IR, the Primary Vendor, the unit cost was $0.00 as I hadn’t entered one on either of the two new Inventory Vendor records. The Manufacturer, Model and Catalog # were copied from the last Inventory Vendor record created for the Primary Vendor, the one with the Catalog # of 7124166.

You cannot modify the Vendor, Manufacturer, Model, Catalog #, Organization or Site on an Inventory Vendor record but you can delete the records. I will delete both the records created when I entered and made a change to the Primary Vendor details, the two records associated with vendor IR.

Reorder an inventory item with Primary Vendor not referenced in Inventory Vendors

There is now no Inventory Vendor record for the Primary Vendor IR.

When I use the Reorder Items action the Purchase Requisition created was for the Primary Vendor IR, the Manufacturer, Model and Catalog # were copied from the fields in the Primary Vendor section, however, the Unit Cost was taken from the Last Receipt Cost on the Inventory Costs table. The records in the Inventory Vendors table were not used.

Reorder an inventory item with the Primary Vendor referenced in Inventory Vendors

If there is a Primary Vendor and an Inventory Vendor record exists for the same vendor, but with different Manufacturer, Model and Catalog #, then a Purchase Requisition was created for the Primary Vendor but the Manufacturer, Model, Catalog # and Unit Cost came from the Inventory Vendor’s record.

Note. If there is no Last Order Date, as the screenshot suggests, it did not find this record. When I added a Last Order Date it found this record, notice it does not reference a site, it is at the Organization level.

This suggests that Maximo looks for the Primary Vendor in the Inventory Vendors record if there is a Last Order Date.

Reorder an inventory item with the Primary Vendor referenced in Inventory Vendors multiple times

There are now two Inventory Vendor records that reference the Primary Vendor, the latest Last Order Date has no Site reference, the one shown from a few weeks ago 4^th June 2024 does reference the site of the storeroom.

The Purchase Requisition created used the Inventory Vendor record for the Primary Vendor where the record referenced the site of the storeroom, the Manufacturer, Model and Catalog # came from this record. It had a Unit Cost of $28.50 which also originated from this Inventory Vendor record.

Reorder an inventory item with Primary Vendor referenced in Inventory Vendors as the Default Vendor

I’ve created a further Inventory Vendor record for the Primary Vendor at the site level of BEDFORD and marked it as the Default Vendor. The Last Order Date is earlier than all others as 1^st June 2024.

The Purchase Requisition created used the Inventory Vendor record for the Primary Vendor where the record referenced the site of the storeroom, the Manufacturer, Model and Catalog # came from this record.  The record chosen had the latest Last Order Date, it ignored another record that was marked as the Default Vendor. It had a Unit Cost of $28.50 which also originated from the selected Inventory Vendor record.

This suggests that if a Primary Vendor is referenced and there are inventory vendor records for this vendor, then the record selected is the one with the storeroom’s site referenced and the latest Last Order Date and it ignores any record marked as the Default Vendor including one for the same vendor as the Primary Vendor.

Reorder an inventory item with a Purchase Contract for a vendor who is not the Primary Vendor

I created a Purchase Contract of type PRICE with vendor BWC which hasn’t been used before and is not the Primary Vendor. The Unit Cost of item AJE11 is $27.25. The Contract line also has fields for Manufacturer, Model and Catalog #. The contract which started at the beginning of June (in the past) was authorised for the BEDFORD site and approved. I did check that the contract would be found when creating a Purchase Requisition and selecting the AJE11 item.

When running the Reorder Items action the setting – Consider Contracts When Creating PRs/POs – was enabled, this is the default. Maximo created the Purchase Requisition against vendor BWC with the price contract referenced on the PR header and PR line, the unit cost was $27.50. The Manufacturer, Model and Catalog # were copied from the fields on the contract line.

An active Purchase Contract therefore takes priority over the Primary Vendor or any other inventory vendor records, even if it is not the primary vendor.

Reorder an inventory item with multiple Purchase Contracts from vendors who are not the Primary Vendor

I duplicated the purchase contract and on the new contract 1059 of type PRICE and changed the vendor to BALSTON, I also changed the Quantity to 5 and unit cost to $26.75, I also changed the Manufacturer, Model and Catalog #. Contract 1059 was authorised for the BEDFORD site and approved. I did check that the contract would be found when creating a Purchase Requisition and on selecting the AJE11 item, I received the warning that multiple contracts existed for the item.

When running the Reorder Items action the setting – Consider Contracts When Creating PRs/POs – was enabled. Maximo created the Purchase Requisition against vendor BALSTON with the price contract referenced on the PR header and PR line, the unit cost was $26.75. The Manufacturer, Model and Catalog # were copied from the fields on the BALSTON contract line. The reorder quantity was one, and not five. I do not think this would be correct unless the contract line is marked as – Change Quantity on Use – it wasn’t marked this way, and I was expecting the reorder to select a quantity of 5. The contract pricing may be based on volume, and not individual prices. I have reported this to IBM Support.

If there are multiple contracts, then the reorder will pick the one with the lowest unit cost.

Reorder an inventory item with Purchase Contract from a vendor who is the Primary Vendor

The Primary Vendor is IR, so I have created a contract of type PURCHASE for vendor IR and the AJE11 item. The Manufacturer, Model and Catalog # were copied from the Primary Vendor fields but I changed them so that I would know from where they were derived. Again, I gave a contract quantity of 5 and – Change Quantity on Use – is not set. The contract Unit Cost is $42.00, a price which is higher than the previous two contracts.

When running the Reorder Items action the setting – Consider Contracts When Creating PRs/POs – was enabled. Maximo created the Purchase Requisition against the primary vendor IR with the price contract referenced on the PR header and PR line, the unit cost was $42.00. The Manufacturer, Model and Catalog # were copied from the fields on the IR contract line. The reorder quantity was one, and not five.

If there is a contract with the Primary Vendor, then this will be used to set both the Vendor and the Unit Cost. If there happened to be multiple contracts for the Primary Vendor and the same item then I expect the contract with the lowest unit price to be selected, but I did not specifically test this. I did make a test on the Contract Line Status by changing it to WAPPR and now the contract for BALSTON was selected.

Summary

During an inventory reorder Maximo derives the Purchase Requisition’s Vendor, the Unit Cost and the fields Manufacturer, Model and Catalog # from various places, but there is a priority order where Maximo searches for a record. The priority order seems to be:

1. An active Purchase Contract for the Primary Vendor, the unit costs and Manufacturer, Model and Catalog # are copied from the contract line. The contract line must be approved.
2. An active Purchase Contract for any other vendor, the unit costs and Manufacturer, Model and Catalog # are copied from the contract line if this is approved. If the item is referenced on multiple active contracts, then the contract with the lowest unit cost is selected.
3. If no Purchase Contracts and there is a Primary Vendor, then the Inventory Vendor record for the Primary Vendor with the latest last ordered date is used, if this record is at site level for the storeroom’s site. The Last Price is used for the Unit Cost and the Manufacturer, Model and Catalog # are copied from this record.
4. If no Purchase Contracts and there is a Primary Vendor, then the Inventory Vendor record for the Primary Vendor with the latest last ordered date is used, if this record is at organization level, with no site. The Last Price is used for the Unit Cost and the Manufacturer, Model and Catalog # are copied from this record.
5. If no Purchase Contracts and there is a Primary Vendor but no Inventory Vendor record for the Primary Vendor then the Last Receipt Cost on the Inventory Costs table is used, with the Manufacturer, Model and Catalog # coming from the fields in the Primary Vendor section. 
6. If no Purchase Contracts and no Primary Vendor, then the Inventory Vendor records will be used starting with the record marked as the Default Vendor, even if this is an organization level record and there are other site level records.
7. If no Purchase Contracts and no Primary Vendor, then the Inventory Vendor record at the site level and with the latest last order date will be used. The Last Price is used for the Unit Cost and the Manufacturer, Model and Catalog # are copied from this record.
8. If no Purchase Contracts and no Primary Vendor, then the Inventory Vendor record at the organization level and with the latest last order date will be used. The Last Price is used for the Unit Cost and the Manufacturer, Model and Catalog # are copied from this record.
9. If there are no Purchase Contracts, no Primary Vendor and no Inventory Vendor records the Purchase Requisition will be created with no vendor and no unit cost.

Generally, the priority order is look to the purchase contracts first, then the Inventory Vendor records sorting by the Primary Vendor, Site and then Organization and select the record with the latest last ordered date.

To have a consistent reorder process you should enter the Primary Vendor, and modify the Inventory Vendor record it creates, to stop there being multiple records in this table for the same item and vendor. Delete old Inventory Vendor records which reference the storeroom’s site if there are other records with a later last order date. 

Note. If Internal is set, then Maximo will order from the referenced storeroom and the unit cost is the issue unit cost in that storeroom.