The purpose of the source determination process is to automatically assign a source of supply to a purchase requisition. If the requester has set the Source Determination indicator in the requisition header, the system searches for possible source of supply for all the items of the requisition. If the system finds several valid sources for an item, the decision process can be supported by a price simulation or by reference to data from the vendor evaluation facility.
To have the system assign a single unique source during the automatic source determination process, a source list and/or a quota arrangement can be made use of.
In the source list, it is required to specify which source of supply is valid for a certain period of time. It is also possible to specify a preferred source as fixed for a certain period in the source list. In automatic source determination, the system will then suggest just this source, even if other potential sources exists.
With the aid of a quota arrangement, it is feasible to have material requirements arising over a certain period divided up among different sources on the basis of quotas. Quota arrangements determine which source of supply (maybe from among several possible ones) is automatically assigned to a purchase requisition.

Learn more about source list in this training document.