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Do you have a sourcing rule established to say that the item is an internally sourced one?
If you are not seeing the Destination type as Inventory first you navigate
PUchasing Responsibility>Setup>Purchasing>Lookup Codes
Query For Destination Type check whether you have the Destination type Inventory in the Look up codes or Not
Then Check for the Shipping net networks b/w Ship to Organization and Bill to Organization
Let me know if you have any further Doubts
Thanks & Regards