I know that we can set up primary vendors for items, but is there any way to set up secondary and tertiary suppliers as well.
What we want is for one vendor to be the main vendor that supplies the item, but if they do not have it, we go to the next one, and then the next...
Are you hoping for Master Planning to make this decision, or your users when manually creating Purchase orders?
As far as I know, Master Planning will only use the Primary Vendor on the Item OR the Vendor from the Trade Agreement which has either:
Outside those parameters, how could master planning know whether your vendor currently has no inventory? If your buying team know which vendor should be used right now, they could simply change the Primary vendor.
In terms of manual purchase order creation, you have 'Approved vendor' functionality, which restricts which vendors can be used to buy an item.
But again, AX won't know that the vendor you have chosen cannot supply the item and recommend to use a different vendor. It can only limit you to one of your preferred vendors.