Hello Mike,

When PAC checkbox is ticked, it will force the allocation on the basis of full and undivided packing units. For example, if your product has stock units(STK) = UN and defined packing units (PAC) = BAG (bags), then allocation will be only complete BAG. it will allocate 
the remaining quantity allocated or issued to stock as STK.

And the stock in the location needs to be in the BAG unit, not the UN unit for this to work.  

Does 'PAC complete' only affect the allocation lines where the PKU is set to "Yes"?

Does 'PAC complete' only affect the allocation lines where the PKU is set to "Yes"?

This is how we have it set up.  The answer is yes.  These rules will first fulfill the full pack unit (for us, it's a BOX), then it'll get the remainder of the unites from either that same location the BOX is located at, or the next location where we store the loose product.  Products in the BOX need to have their units at BOX in the location, and the product-site default locations need to point to the "BOX" locations