Verify that the alternate component is valid on the required date of the shop order material line, and is valid for the parent/shop order part.

That was it!  Thanks so much.

@Björn Hultgren I have another question, it appears you cannot add the alternate component to a shop order unless you have it in inventory.  Is this true?  Was hoping we could still add the alternate component to the shop order and was hoping it would drive demand for it, when MRP is run, so we could purchase the alternate.  is there a way to do this?  

It is possible to replace also to an alternate without available quantity by clearing the Show Only Components with an Available Quantity check box.

How are you planning to use the alternate component functionality? Typically it is used in such way that the component you want to drive demand against is the main component while the component that you want to “use-up” is added as the alternate.  

If we choose to replace the component with its alternate we would want to drive demand against the alternate.  Can it work that way?

Sure by using the above mention possibility to replace to an alternate without available stock, MRP will identify the shop order material line and drive demand against it.

As I do not have inventory of the alternate but still want to replace it on the shop order and then have demand be driven by the alternate component.  If I have enough inventory of the alternate I do not get this error.

try the “Select” option since you must point out which alternate you want to replace to if there’s no available quantity.

I get the same error by choosing Select, as this part only has one alternate, and it has no on hand inventory.

so it seems that this cannot be done if there is no available quantity of the alternate component?

Which version of IFS are you on? 

apps 10 

Okay, unfortunately the check box Show Only Components with an Available Qty that allows replacing also to an alternate without available quantity was introduced in IFS Cloud.