diff --git a/mrp_multi_level/demo/product_product_demo.xml b/mrp_multi_level/demo/product_product_demo.xml
index f9b45c103..aaeb05e65 100644
--- a/mrp_multi_level/demo/product_product_demo.xml
+++ b/mrp_multi_level/demo/product_product_demo.xml
@@ -36,6 +36,14 @@
             eval="[(6, 0, [ref('mrp.route_warehouse0_manufacture')])]"
         />
     </record>
+    <record id="product_product_fp_4" model="product.product">
+        <field name="name">FP-4</field>
+        <field name="categ_id" ref="product_category_mrp" />
+        <field name="type">product</field>
+        <field name="uom_id" ref="uom.product_uom_unit" />
+        <field name="uom_po_id" ref="uom.product_uom_unit" />
+        <field name="produce_delay">2</field>
+    </record>
 
      <!-- Customizable Desk -->
     <record id="product.product_product_4_product_template" model="product.template">
diff --git a/mrp_multi_level/models/product_mrp_area.py b/mrp_multi_level/models/product_mrp_area.py
index 1772098a4..7cfb0a428 100644
--- a/mrp_multi_level/models/product_mrp_area.py
+++ b/mrp_multi_level/models/product_mrp_area.py
@@ -184,14 +184,30 @@ class ProductMRPArea(models.Model):
                 "company_id": rec.mrp_area_id.company_id,
             }
             rule = group_obj._get_rule(rec.product_id, proc_loc, values)
-            if (
-                rule.action == "manufacture"
+            if not rule:
+                rec.supply_method = "none"
+                continue
+            # Keep getting the rule for the product and the source location until the
+            # action is "buy" or "manufacture". Or until the action is "Pull From" or
+            # "Pull & Push" and the supply method is "Take from Stock".
+            while rule.action not in ("buy", "manufacture") and rule.procure_method in (
+                "make_to_order",
+                "mts_else_mto",
+            ):
+                new_rule = group_obj._get_rule(
+                    rec.product_id, rule.location_src_id, values
+                )
+                if not new_rule:
+                    break
+                rule = new_rule
+            # Determine the supply method based on the final rule.
+            rec.supply_method = (
+                "phantom"
+                if rule.action == "manufacture"
                 and rec.product_id.product_tmpl_id.bom_ids
                 and rec.product_id.product_tmpl_id.bom_ids[0].type == "phantom"
-            ):
-                rec.supply_method = "phantom"
-            else:
-                rec.supply_method = rule.action if rule else "none"
+                else rule.action
+            )
 
     @api.depends(
         "mrp_area_id", "supply_method", "product_id.route_ids", "product_id.seller_ids"
diff --git a/mrp_multi_level/tests/common.py b/mrp_multi_level/tests/common.py
index ca4139073..dce257246 100644
--- a/mrp_multi_level/tests/common.py
+++ b/mrp_multi_level/tests/common.py
@@ -29,6 +29,7 @@ class TestMrpMultiLevelCommon(SavepointCase):
         cls.fp_1 = cls.env.ref("mrp_multi_level.product_product_fp_1")
         cls.fp_2 = cls.env.ref("mrp_multi_level.product_product_fp_2")
         cls.fp_3 = cls.env.ref("mrp_multi_level.product_product_fp_3")
+        cls.fp_4 = cls.env.ref("mrp_multi_level.product_product_fp_4")
         cls.sf_1 = cls.env.ref("mrp_multi_level.product_product_sf_1")
         cls.sf_2 = cls.env.ref("mrp_multi_level.product_product_sf_2")
         cls.sf_3 = cls.env.ref("mrp_multi_level.product_product_sf_3")
@@ -219,6 +220,22 @@ class TestMrpMultiLevelCommon(SavepointCase):
         cls.product_mrp_area_obj.create(
             {"product_id": cls.prod_uom_test.id, "mrp_area_id": cls.mrp_area.id}
         )
+        # Product MRP Parameter to test supply method computation
+        cls.env.ref("stock.route_warehouse0_mto").active = True
+        cls.env["stock.rule"].create(
+            {
+                "name": "WH2: Main Area → Secondary Area (MTO)",
+                "action": "pull",
+                "picking_type_id": cls.env.ref("stock.picking_type_in").id,
+                "location_src_id": cls.env.ref("stock.stock_location_stock").id,
+                "location_id": cls.sec_loc.id,
+                "route_id": cls.env.ref("stock.route_warehouse0_mto").id,
+                "procure_method": "mts_else_mto",
+            }
+        )
+        cls.product_mrp_area_obj.create(
+            {"product_id": cls.fp_4.id, "mrp_area_id": cls.secondary_area.id}
+        )
 
         # Create pickings for Scenario 1:
         dt_base = cls.calendar.plan_days(3 + 1, datetime.today())
diff --git a/mrp_multi_level/tests/test_mrp_multi_level.py b/mrp_multi_level/tests/test_mrp_multi_level.py
index 1f874d664..934471d7e 100644
--- a/mrp_multi_level/tests/test_mrp_multi_level.py
+++ b/mrp_multi_level/tests/test_mrp_multi_level.py
@@ -428,3 +428,22 @@ class TestMrpMultiLevel(TestMrpMultiLevelCommon):
             [("product_mrp_area_id.product_id", "=", self.pp_4.id)]
         )
         self.assertEqual(len(pp_4_planned_orders), 1)
+
+    def test_17_supply_method(self):
+        """Test supply method computation."""
+        self.fp_4.route_ids = [(5, 0, 0)]
+        product_mrp_area = self.product_mrp_area_obj.search(
+            [("product_id", "=", self.fp_4.id)]
+        )
+        self.assertEqual(product_mrp_area.supply_method, "none")
+        self.fp_4.route_ids = [(4, self.env.ref("stock.route_warehouse0_mto").id)]
+        product_mrp_area._compute_supply_method()
+        self.assertEqual(product_mrp_area.supply_method, "pull")
+        self.fp_4.route_ids = [
+            (4, self.env.ref("purchase_stock.route_warehouse0_buy").id)
+        ]
+        product_mrp_area._compute_supply_method()
+        self.assertEqual(product_mrp_area.supply_method, "buy")
+        self.fp_4.route_ids = [(4, self.env.ref("mrp.route_warehouse0_manufacture").id)]
+        product_mrp_area._compute_supply_method()
+        self.assertEqual(product_mrp_area.supply_method, "manufacture")