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Please make sure that your Inventory Organization is linked in its Location. It means right location should have Inventory Org.
For your information, in iProcurement User can choose only Location, not any Destination Inventory Org like we have in Requisition Form.
Thanks for your reply sumitkghose. But the right location has already been set up. I checked again just make sure it was linked to the Inventory Org and still I cannot select it as a deliver to location.