A: Commitment types
Each line in a purchase agreement is a commitment to buy something. You can use lines from multiple purchase orders (POs) to fulfill the commitment. There are four types of commitments:
Product quantity commitment – You purchase a specific quantity of a product.
Product value commitment – You purchase a specific currency amount of a product.
Product category value commitment – You purchase a specific currency amount in a procurement category. The amount can be for a catalog item or a non-catalog item.
Value commitment – You purchase a specific currency amount of any product or products in any procurement category.
Policies for purchase agreements
B: The following policies affect the way that the link between a purchase agreement commitment and the corresponding PO lines works:
Max is enforced – The total quantity or amount for all order lines can't exceed the quantity or amount that is specified on the related commitment.
Price and discount is fixed – The price on an order line and the price on the related commitment must be the same. If the price is changed on the order line, the link to the commitment is broken. If the link is broken, the order line doesn't contribute to the fulfillment of the commitment.
Minimum release amount and Maximum release amount – If an amount is specified, you receive a message if you make any change to an order line that causes the order line to differ from the related commitment.
Note: As whiteboard paint grows in popularity, so does the demand. This causes supply shortages. Whiteboard paint is ordered six months in advance.
Requirements. Customers and sales
(A) Schools must agree to the amount of whiteboard paint they will purchase for the whole school year.
(B) Sales of whiteboard paint must be limited so that one school does not buy all the inventory and force backorders for other schools.
[Reference: https://learn.microsoft.com/en-us/dynamics365/supply-chain/procurement/purchase-agreements, , ]
