A digital processing system supporting management of purchase orders according to chargeable subcontracting model in an outsourcing organization. In one embodiment, when a user provides an order for a desired quantity of an assembly type from an external organization, the digital processing system automatically raises a sales order, as originating from the external organization, corresponding to each of a set of components required for manufacturing the assembly type. On receiving a receipt indication indicating the successful delivery of the order, the digital processing system calculates a net payable amount to be paid to the external organization. Additional aspects of the invention facilitate setting up of chargeable contracting model with simulated (within the digital processing system) external organizations, planning of purchase orders, etc.