Hi,
During Production Supply Area determination, system takes the supply area from the work center master data, if no information is available then BOM and then material master.
Control cycle can be created (LPK1) for the combination of material, plant and supply area Or plant and supply area.
So once based on the supply area is determined, system will next look for the production storage bin which will be determined via the control cycle maintained for the above combination.
Hope it helps,
Thanks,
Ram