You can set a price update tolerance that specifies the maximum percentage increase allowed to an item's price when your supplier sends updated price/sales catalog information through the Purchasing Documents Open Interface. This price update tolerance affects only blanket purchase agreements and catalog quotations imported through the Purchasing Documents Open Interface. If the tolerance is exceeded, you receive a notification for each affected document and can accept or reject the price increase through the Exceeded Price Tolerances window. You can also access this window through the notification.
Purchasing performs the price update tolerance check against the price on the current revision of the document. The price tolerance check is performed only on updated blanket purchase agreements and catalog quotations and only on line price increases (not price breaks).
Define a price update tolerance at any of the following levels; Purchasing uses the first tolerance it finds, in this order: on the agreement in the Terms and Conditions window, at the item-supplier level in the Supplier-Item Attributes window, at the commodity-supplier level in the Supplier-Item Attributes window, and at the system level in the PO: Price Tolerance (%) for Catalog Updates profile option.
If you set the Price Update Tolerance to 20 at the item-supplier level in the Supplier-Item Attributes window (and you haven't set the price tolerance on the agreement), a price increase of more than 20 percent for that item and supplier will send the buyer a notification. If you set the Price Update Tolerance to 20 on the agreement, a price increase of more than 20 percent on that document will issue a notification.
A price tolerance of 0 means you are alerted of every price increase. No tolerance means that you are not alerted of any price increase.