Open Question

1) How different shipping methods like Direct Org Transfer, In-transit have impa
ct on diff accounts
2)
An inter-organization shipping network describes the relationships and accountin
g information between a shipping organization and a destination organization. Yo
u must define a shipping network between two organizations before you can transf
er material between organizations. When you set up a shipping network you must s
elect a transfer type: Intransit or Direct.
Intransit: Oracle Inventory moves material to an intermediary state before it re
aches the destination organization. After the material arrives at the destinatio
n organization, you will need a receipt transaction to retrieve it. If intransit
is selected, you can define:
Shipping Methods, GL Accounts to use in transit, Material ownership during trans
fer, Planning lead times and Transfer Charges
Direct: Oracle Inventory moves the material directly to the destination organiza
tion. However, for both
transfer types, you can determine default receipt r
outing and whether internal orders are required to transfer material
1) What is the difference between Move Order and SubInventory Transfer?
Subinventory Transfer:
1. Does'nt Require Approval.
2. Suggested to use SI, when authorization of the
Subinventories is same.
3. Can not be Automated.
Move Order Transfer:
1. It is a request transfer.
2. MO can be automated. Eg. MO (FGI to Stagging) gets
generated when you perform Pick release in OM.
3 Requires Approval.
4. MO is suggested to use when authorization of
subinventories are different.
A Transaction Source Type is defined as an entity against which Oracle Inventory
charges a transaction. The following transaction source types come seeded with
Oracle Inventory:
Purchase Order
Account Alias
Move Order
Internal Order
02652788873/74
Standard Cost Update
Internal Requisition
Sales Order
Cycle Count
Periodic Cost Update
Physical Inventory
Account
RMA (Return Material Authorization)
Inventory
Job or Schedule

With Oracle Inventory Management you can improve inventory visibility, reduce in
ventory levels and control inventory operations. All of your material in each li
ne of business and stage of the inventory lifecycle can be tracked in a single s
ystem. Increased transparency will reduce the need for local buffer stocks, and
inventory will be located where it previously wasn t known to exist.
Oracle Inventory Management is part of the Oracle Value Chain Execution solution
and integrates seamlessly with other Supply Chain Management applications, incl
uding Oracle Warehouse Management, Oracle Mobile Supply Chain Applications, Orac
le Order Management, Oracle Purchasing, Oracle Discrete Manufacturing, Oracle Pr
ocess Manufacturing, and Oracle Cost Management.
An inventory organization is a facility where you store and transact items. Befo
re you can use Oracle Inventory, you must define one or more inventory organizat
ions. Inventory organizations represent distinct entities in your enterprise and
can be one of the following:
A physical entity such as a manufacturing facility, warehouse, or distribution c
entre.
A logical entity such as an item master organization, which you use to define it
ems.
An inventory organization can have its own location, ledger, costing method, wor
kday calendar, and items
An inventory organization can share one or more of these characteristics with ot
her organizations.
Some FAQ s on Oracle Inventory
What is an item?
Explain Item Master Organization?
Define Inventory Organization?
What is a subinventory?
In which table does the subinventory related information for an item is stored?
What is a stock locator?
What are the Key flex fields in oracle Inventory?
What are the basic steps involved in defining an item?
What are item attributes?
What is the use of item template?
What is an item category and category set?
Explain unit of measure (UOM) and UOM class?
Explain shipping method?
Describe Interorganization Shipping Networks
In which tables are the transactional details are stored?
What is revision control in Oracle Inventory?
What is Picking Order of Subinventory or Locator? Where will you define the orde
r?
What are the different inventory transactions?
Describe various inventory transactions?
What is the difference between a subinventory transfer and a move order?
What are the Components used in Customizing a Transaction?
What is a Transaction source type?
What is a transaction type?
Name any four purposes where miscellaneous transaction can be used?
Explain inventory control?
What are the objectives of inventory control?
What are the factors that affect inventory control?
Define ABC analysis?
What is consignment inventory?
What are the different planning methods available in Oracle?
When should the material be ordered?
Explain re-order point planning?
Explain min-max planning technique?
Define cycle counting and explain its use in oracle inventory?

When do you perform physical inventory and explain the steps involved in it?
1. What is an item?
An item is a part or services where you can Purchase, Sell, Plan, Manufacture, S
tock, Distribute and Prototype.
Items can also be containers for items as well as components you build into othe
r items.
2. Explain Item Master Organization?
An item master organization is a logical entity where you define the item. After
you define an item in the item master, you can assign it to any number of other
organizations.
3. Define Inventory Organization?
It is a facility which will enable you to store and transact the items. It can b
e a manufacturing unit, ware house, distribution center etc.
4. What is a subinventory?
Subinventiries are unique physical or logical separations of material inventory.
These can be raw material, finished goods or defective material subinventory. Y
ou must define at least one subinventory. Subinventories are of two types: stora
ge and receiving
Storage subinventories are intermediate or final put away locations for material
. Material that resides in a storage subinventory appears in on hand quantity, a
nd is tracked by the system. The system can book orders against, and use manufac
turing processes on material that resides in a storage subinventory. You must de
fine at least one storage subinventory for your implementation.
Receiving type subinventory is only used for receiving items. Items in this subi
nventories cannot be on-hand or reserved
5. In which table does the subinventory related information for an item is store
d?
MTL_ITEM_SUB_INVENTORIES
6. What is a stock locator?
Locators are structures within subinventories. Locators are the third level in t
he enterprise structuring scheme of Oracle Inventory. Locators may represent row
s, racks, or bins in warehouses. You can transact items into and out of locators
. You can restrict the life of locators, establish capacity of a specific locato
r in weight or units, as well as specify dimensions which define a locator s capac
ity by volume.
7. What are the Key flex fields in oracle Inventory?
Oracle Inventory provides the following flexfields:
System Items, Item Catalogs, Item Categories, Stock Locators, Account Alias and
Sales Order
8. What are the basic steps involved in defining an item?
Create an item in the item master form
Copy the template from the tools menu to assign specific attributes to the item
and save it.
Assign the item to a category from tools menu and save your work
Select organization assignment from tools menu and assign the item to different
inventory organizations by ticking the checkbox next to the inventory organizati
ons.
9. What are item attributes?
Item attributes are the collection of information about an item. These are used
to store specific characteristics of an item, such as item status, unit of measu
re, revision control, etc. these can be controlled at either the master or the o

rganization level. These attributes are stored in a table named MTL_ITEM_ATTRIBU

TES
10. What is the use of item template?
An Item template is a set of attributes that enable the user to quickly create a
n Item. You can use the existing templates are you can create your custom templa
te.
11. What is an item category and category set?
A category is a logical classification of items that have similar characteristic
s.
A category set is a distinct grouping scheme and consists of multiple categories
. An item can belong to any number of category sets. We can assign item to one c
ategory within each category set. The categories can be retrieved from the table
MTL_CATEGORIES_B and item category set from MTL_CATEGORY_SETS_B .
12. Explain unit of measure (UOM) and UOM class?
The unit of measure (UOM) helps us count the number of items involved in a trans
action or the number of items that are stored in a subinventory or a locator.
UOM classes let you group different UMO s into one category. Eg, quantity could be
a UOM class under which each, dozen, lot etc are separate UOM s.
13. Explain shipping method?
Shipping methods are the way you ship material. When you create a shipping metho
d, you must enable it before you can use it in a shipping network. If you disabl
e a shipping method, it cannot be used in a shipping network.
14. Describe Interorganization Shipping Networks
An inter-organization shipping network describes the relationships and accountin
g information between a shipping organization and a destination organization. Yo
u must define a shipping network between two organizations before you can transf
er material between organizations. When you set up a shipping network you must s
elect a transfer type: Intransit or Direct.
Intransit: Oracle Inventory moves material to an intermediary state before it re
aches the destination organization. After the material arrives at the destinatio
n organization, you will need a receipt transaction to retrieve it. If intransit
is selected, you can define:
Shipping Methods, GL Accounts to use in transit, Material ownership during trans
fer, Planning lead times and Transfer Charges
Direct: Oracle Inventory moves the material directly to the destination organiza
tion. However, for both
transfer types, you can determine default receipt r
outing and whether internal orders are required to transfer material
15. In which tables are the transactional details are stored?
MTL_MATERIAL_TRANSACTIONS
MTL_TRANSACTIONS_INTERFACE
MTL_MATERIAL_TRANSACTIONS_TEMP
MTL_TRANSACTION_ACCOUNTS
16. What is revision control in Oracle Inventory?
A revision is a particular version of an item, bill of material, or routing. Rev
ision control is normally enabled for identifying a modified item. Item can be p
laced under revision control by checking the box `Revision control` in Inventory
tab while defining new item or for existing item. Base table for Item Revision
is MTL_ITEM_REVISIONS.
17. What is Picking Order of Subinventory or Locator? Where will you define the
order?
The value indicates the priority with which we pick items from subinventory or L
ocator, relative to another subinventory or locator, where a given item resides.

A picking order of 1 means that order entry functions pick items from the subin
ventory or locator before others with a higher number (such as 2,3 and so on).
The subinventory order is defined in the subinventory definition and the locator
order is defined in the locator definition. The default order for both the subi
nventory and the locator are defined in the organization.
18. What are the different inventory transactions?
A transaction is an item movement within, into or out of inventory. A transactio
n changes the quantity and location of an item
The following are the different inventory transactions:
Receive an item into an organization from GL account number
Issue an item from an organization into a GL account number
Transfer items from one subinventory to other in the same organization.
Transfer of items between various inventory organizations
Reservation of items
19. Describe various inventory transaction types?
Miscellaneous transaction: This transaction is used to do adjustments in stock d
ue to damage, obsolescence, issuing items for R & D or issuing track able expens
e items.
Subinventory transfer: This transaction is used to transfer goods from one subin
ventory to another within the same inventory organization.
InterORG transfer: This transaction is used to transfer goods from one inventory
organization to another.
Receiving transaction: This transaction is used to move goods from receiving doc
k to specified subinventory and locator.
Sales issue: This transaction is used to move goods from pick subinventory to st
aged subinventory.
WIP issue: This transaction is used to issue materials against production orders
20. What is the difference between a subinventory transfer and a move order?
Both these transactions are used for the movement of items from one subinventory
to the other. The difference is that move order generates a pick slip and a sub
inventory transfer doesn t.
Move order requires approval . Also, move orders create allocations. So you can pla
ce hold on the material with the intention of picking it up a little later. In s
ubinventory transfer, there is no reservation / allocation.
21. What are the Components used in Customizing a Transaction?
The following are the three components used in a transaction
Transaction Source Type
Transaction Action
Transaction Type
A Transaction Source Type and a Transaction Action come together to form a Trans
action Type.
22. What is a Transaction source type?
A Transaction Source Type is defined as an entity against which Oracle Inventory
charges a transaction. The following transaction source types come seeded with
Oracle Inventory:
Purchase Order
Account Alias
Move Order
Internal Order
Standard Cost Update
Internal Requisition
Sales Order
Cycle Count
Periodic Cost Update
Physical Inventory

Account
RMA (Return Material Authorization)
Inventory
Job or Schedule
23. What is a transaction type?
A transaction type is a combination of a transaction source type and a transacti
on action. It is used to classify a particular transaction for reporting and que
rying purposes. Ex:
Sales order issue (txn type) + issue from stores (txn action) = sales order (txn
source type)
Move order transfer (txn type) + subinventory transfer (txn action) = move order
(txn source type)
24. Name any four purposes where miscellaneous transaction can be used?
Cycle count adjustment, Physical inventory adjustment, adjusting inventory quant
ity within an inventory organization and decrementing on-hand balances from a su
binvemtory
25. Explain inventory control?
Inventory Control is the process by which inventory is measured and regulated ac
cording to predetermined norms such as economic lot size for order or production
, safety stock, minimum level, maximum level, order level etc.
26. What are the objectives of inventory control?
To meet unforeseen future demand due to variation in forecast figures and actual
figures.
To average out demand fluctuations due to seasonal or cyclic variations.
To meet the customer requirement timely, effectively, efficiently, smoothly and
satisfactorily.
To smoothen the production process.
To facilitate intermittent production of several products on the same facility.
To gain economy of production or purchase in lots.
To reduce loss due to changes in prices of inventory items.
To meet the time lag for transportation of goods.
To meet the technological constraints of production/process.
27. What are the factors that affect inventory control?
Type of product
Type of manufacture
Volume of production
28. Define ABC analysis?
ABC analysis determines the relative value of a group of inventory items based o
n a user specified valuation criterion.
This technique divides inventory into three categories A, B & C based on their a
nnual consumption value.
It is also known as Selective Inventory Control Method (SIM)
29. What is consignment inventory?
Consignment Inventory is inventory that is in the possession of the customer, bu
t is still owned by the supplier. In other words, the supplier places some of hi
s inventory in his customer s possession (in their store or warehouse) and allows
them to sell or consume directly from his stock. The customer purchases the inve
ntory only after he has resold or consumed it. The key benefit to the customer s
hould be obvious; he does not have to tie up his capital in inventory. This does
not mean that there are no inventory carrying costs for the customer; he does s
till incur costs related to storing and managing the inventory
30. What are the different planning methods available in Oracle?
Re-order point planning

Min-Max planning
Kanban cards
Subinventory replenishment planning
31. When should the material be ordered?
When on-hand quantity + supply
demand is less than safety stock (safety stock is
nothing but minimum inventory level)
[On-hand quantity] + [supply]
[demand] < [min inventory level]
32. Explain re-order point planning?
Reorder point planning uses demand forecasts to decide when to order a new quant
ity to replenish inventory. Reorder point planning suggests a new order for an i
tem when the available quantity (on-hand quantity plus planned receipts) drops b
elow the item s safety stock level plus forecast demand for the item during its re
plenishment lead-time. The suggested order quantity is an economic order quantit
y that minimizes the total cost of ordering and carrying inventory. Oracle Inven
tory can automatically generate requisitions to inform your purchasing departmen
t that a replenishment order is required to supply your organization.
If the forecast is correct and the order arrives on time, the inventory level sh
ould be right at the safety stock level at the time of receipt. In cases where t
he desired safety stock level changes during the order lead time, Oracle Invento
ry uses the largest safety stock quantity during the lead-time.
When an order is triggered, the EOQ is the size of the triggered order.
EOQ = square root of: [(2 X annual demand X order cost) / (carrying cost percent
X Unit cost)]
Oracle Inventory calculates annual demand as the current demand rate annualized
by multiplying the current period demand forecast by the number of periods per y
ear (12 or 13).
Reorder point planning can be performed at the organization level only.
33. Explain min-max planning technique?
Min-Max planning is a tool for planning inventory that looks at user-defined min
imum and maximum inventory levels. It does not consider lead times.
We can perform this technique at org level or subinventory level
34. Define cycle counting and explain its use in oracle inventory?
Cycle Counting is a process of periodic counting of individual item / all the it
ems throughout the course of the year to ensure the accuracy of inventory quanti
ties and values.
We can do the cycle counting at Organization / Sub Inventory Level.
Cycle count is used to:
To reconcile system on-hand balances with actual counts in inventory
Maintain control over the items that have higher value
35. When do you perform physical inventory and explain the steps involved in it?
Physical inventory can be performed, whenever there is a need to verify the accu
racy of system on-hand quantities. This can be done for entire organization or c
an be confined to a specific subinventory.
Steps to perform physical inventory:
Define physical inventory
Take a snapshot of system on-hand quantities
Generate physical inventory tags
Enter counts
Do physical inventory adjustments by approving or rejecting
Post adjustments
Purge physical inventory information