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How does the system process Inv Source Requisitions when more than the available stock is requested?

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How does the system process Inventory Source Requisitions when more than the available stock is requested?

Example:

I have 10 units of an item in stock. A requisition for 1000 units is created, yet it assigns the Source Type as 'Inventory'. Why doesn't it create a requisition with Source Type 'Supplier'?

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