General Description of Vendor Minimum
1. Vendor Minimum's control the overall order size.
2. Larger orders generally have lower freight and handling costs.
3. Vendor's sometimes give additional discounts for larger orders.
4. Vendor's sometimes have minimum order size restrictions that must be followed.
5. There are usually many ordering choices in regard to Vendor Minimums.
6. The order Resource Planning suggests exceeds the Vendor Minimum : Release the Order.
7. The order Resource Planning suggests does not meet the Vendor Minimum :
7a. In reviewing the fill rate over the lead time , RP decides to pass until tomorrow.
7b. In reviewing the fill rate over the lead time , RP decides to increase the order to meet the Vendor Minimum.
8. If RP decides to pass on ordering , a buyer may :
8a Agree and wait until tomorrow (Normal).
8b. Buy the items with Calc PO's and add them to an order that has already been sent to the Vendor.
8c. Buy the items with Calc PO's from another supplier.
8d. Buy the items with Calc PO's and incur the higher cost.
8e Increase the order to meet the Vendor's minimum even though RP has decided it is not economical to do so.
8f. Transfer the quantity from another location(RP has usually already considered this option).
8g. Substitute an alternate item(RP has usually already considered this option).
8h. Buy just the items with Calc PO's and Customer Backorders and no open Inbound.
8i. Combine this order through a consolidator.
9. If a vendor has no minimum , RP can calculate an ideal minimum see below for example :

Example of Vendor Minimum
1. $10,000.
2. 40,000 lbs
3. 22 pallets
4. 1 Month's supply
5. Order on Tuesdays