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yes, it is possible to integrate AME with Purchasing & iProcurement to let the system decide which hierarchy must be choosen for related document according to item's category. For that you need to perform several setups in AME and Purchasing including Approval Transaction Types inside Purchasing Document Types, AME Conditions, Groups Rules etc.
However, this integration is limited to purchase requisition, internal requisition & requestor change order and NOT available for other purchasing documents like standard PO, blanket agreement etc.
In case you want to go with AME for requisitions and position hierarchy for POs then also it is possible to do so.
As far as using position hierarchy in AME is concerned, there are conflicting information available in different sources. Position hierarchy support in AME is available in the latest releases of EBS and depending upon which release of EBS you are in you can use this feature as well.
Your post does not have information regaring EBS release and whether it is having full or SSHR (never mind).
For more information you can refer to following Notes in Metalink:
293315.1 : 11.5.10 FAQ for Approvals Management (AME) Integration For iProcurement and Purchasing
434143.1 : How To Setup And Use AME For Purchase Requisition Approvals
559886.1 : How To Find Versions And Enhancements, And Find The Right Documentation for AME In Procurement
Hope this helps.
Thank you for your great support Supro.