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You can use a Planned Purchase Order in the below Circumstances
You create a planned purchase order when you what to establish a long term agreement with a single source supplier with a commitment to buy goods or services. Planned purchase orders include tentative delivery schedules and accounting distributions. You then create scheduled releases against the planned purchase order to actually order the goods or services.
1) A planned purchase order is a type of purchase order you issue before you order actual delivery of goods and services for specific dates and locations. You normally enter a planned purchase order to specify goods you want to order and tentatively schedule delivery of the goods. You later enter a shipment release against the planned purchase order when you actually want to order the goods.
2) A scheduled release is issued against a planned purchase order to place the actual order. You can also change the accounting distributions on each release and the system will reverse the encumbrance for the planned purchase order and create a new encumbrance for the release.
Planned and standard purchase orders are the same in overall document content with two exceptions.
3) You cannot associate a contract with a planned purchase order line.
4) You can specify agreement controls for planned purchase orders.
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