Oracle Inventory Training Manual

Oracle Inventory Training Manual OracleApps88
INVENTORY OVERVIEW ....................................................................................................... 2
BUSINESS SETUPS OVERVIEW ............................................................................................ 4

1. INVENTORY MODULE ............................................................................................................. 5
2. ORGANISATIONS ................................................................................................................... 15
3. SUBINVENTORIES .................................................................................................................. 28
4. ITEMS ..................................................................................................................................... 34
5. COSTING................................................................................................................................ 40
STANDING DATA OVERVIEW .......................................................................................... 46

1. ITEM MASTER ........................................................................................................................ 46
2. ITEM ENTRY .......................................................................................................................... 48
3. ITEM COSTS ........................................................................................................................... 66
4. ABC ANALYSIS ..................................................................................................................... 72
TRANSACTIONS OVERVIEW ............................................................................................. 76

1. INVENTORY TRANSFERS & MOVEMENTS ............................................................................. 77
2. INVENTORY COUNTS ............................................................................................................ 86
3. OPEN INTERFACES ................................................................................................................ 96
4. PERIOD END PROCEDURES ................................................................................................... 97
INVENTORY SECURITY...................................................................................................... 103

1. ORGANISATION SECURITY .................................................................................................. 103
2. MISCELLANEOUS TRANSACTION FORM ............................................................................. 105
RESTRICTED ACCESS/SEGREGATION OF DUTIES .................................................. 107

1. APPLICATION SETUPS ......................................................................................................... 107
2. STANDING DATA ................................................................................................................ 107
3. SEGREGATION OF DUTIES ................................................................................................... 108
KEY INVENTORY REPORTS .............................................................................................. 112
KEY TERMS ............................................................................................................................. 115

1. Inventory Overview
The modules typically considered to be included in the Inventory cycle is: Inventory, Order
Management and Purchasing. Depending upon the client's manufacturing environment, Oracle
Bills of Material and Work in Progress may also be included within the Inventory cycle. The
Inventory cycle is fully integrated into the Oracle Financial Applications and the Inventory
Modules interface directly with other Oracle modules. This is an illustration of the cross-
module integration points:
Within the Inventory cycle, there are a number of potential relevant areas, including:
 Business Setups  Transactions Overview
o Inventory Module o Inventory Transfers & Movements
o Organisations o Inventory Counts
o Subinventories o Open Interfaces
o Items o Period End Procedures
o Costing
 Standing Data Overview  Inventory Security
o Item Master  Access and Segregation of Duties
o Item Entry
o Item Costs
o ABC Analysis
Items and several of their attributes (configurations) can be defined either at the "Master" or
"Organization" level. If designated as a "Master" level, the item and/or its attribute are the same
across all defined organizations. If an attribute or item is defined at the "Organisation" level,
each item or attribute can have different values in each organization. This concept will be
discussed further in each applicable section.
D. Business Setups Overview

The inventory cycle includes several one-time business setups:
 Inventory Module
 Organisations
 Subinventories
 Items
 Costing
The chart below illustrates how these business setups interface with Inventory standing data
and transactions.
1. Inventory Module
1.1. Inventory Key Flexfields
The use of Oracle Inventory module generally requires the use of 4 Inventory-specific key
flexfields, as outlined below.
1.1.1. Item Catalogs

Item catalogs partition the Item Master into groups of items that share common
characteristics. In order for item catalogs to be created, an Item Catalog key flexfield
must be defined. Once this flexfield is created, an item catalog can be created. For
more information on item catalogs, refer to the item catalog section of this document.
1.1.2. Item Categories

Since all items must be assigned to a category, the Item Categories Flexfield must be
defined. When Oracle Inventory or Purchasing is installed, two item category
flexfield structures are seeded, Item Categories and PO Item Category. Multiple item
category structures can be defined, with each structure corresponding to a different
category grouping scheme. Each item category can then be associated with defined
category sets. (Refer to the Category Sets section of this document for more
information).
1.1.3. Sales Orders

The Sales Orders Flexfield is a key flexfield used by Oracle Inventory to uniquely
identify sales order transactions that Oracle Order Management interfaces to Oracle
Inventory. Sales Orders Flexfield should be defined as Order Number, Order Type,
and Order Source. This combination guarantees each transaction to Inventory is
unique.
1.1.4. Stock Locators

Stock Locators Flexfield capture information about stock locators within inventory. In
order to track of specific locators such as aisle, row, bin indicators for items, this
flexfield must be configured, and implement locator control must be enabled for each
organization. If item location is not used, it is not necessary to set up this flexfield.
1.1.5. System Items

This flexfield, also known as the Item flexfield, defines how item values (identifiers)
are structured. The number and order of segments (such as product and product line)
can be defined. The Item Flexfield must be configured before items can be defined. In
the example below, only one Item Flexfield segment is defined:
1.2. Units of Measure

Units of measure are used by a variety of functions and transactions to express the quantity
of items. At least one unit of measure class should be defined. This predefined unit of
measure (such as each, dozen, carton) is then used when an item is defined within a
particular organisation.
1.3. Planners
In order to track of the names of the parties responsible for planning certain items or groups
of items, planners must be defined. Once defined, planners can then be assigned to planning
entities or planners can be assigned to items. Material planners or planning entities can be
assigned to inventory items at the organisation level.
1.4. Freight Carriers

A freight carrier is a commercial company used for internal transfers between organisations,
as well as shipments to and from customers and suppliers. In order to record and report
upon freight costs, freight carriers must be defined. In addition, when defining a freight
carrier, a general ledger account must be associated with each carrier.
1.5. Inventory Transaction Types

A transaction type is used to classify a particular transaction for reporting and querying
purposes. Oracle Inventory also uses transaction types to identify certain transactions to
include in historical usage calculations, for ABC analysis or forecasting.
Transaction types come pre-defined when Oracle is installed. However, the client has the
option of either updating these pre-defined transaction types, or creating new transaction
types. The client can also inactivate transaction types and/or sources and reasons they do
not want to utilise.
The transaction types window is used to define additional transaction types to customise
transaction entry. A client-defined transaction type is a combination of a user-defined
transaction source type, a predefined transaction action, a transaction reasons, and
optionally, a shortage message. Transaction types are defined by combining transaction
actions and transaction source types.
1.5.1. Transaction Sources

Oracle Inventory pre-defines a list of transaction source types for the client. They can
add more source types to this list or update the pre-defined sources. However, they
cannot delete those that are pre-defined, and they can only delete those that are user-
defined (defined by the client) and not associated with a transaction type.
The client can add source types for miscellaneous transactions, inter-organisation and
subinventory transfers, and account transactions. Examples of transaction source
types include: Job or Schedule, Account, Account Alias, Inventory, User-defined and
Move Order.
1.5.2. Transaction Actions

A transaction action is a generic type of material movement or cost update with no
specificity regarding the source of the transaction. Oracle Inventory provides the
following transaction actions which cannot be updated or deleted: Issue from stores,
Subinventory transfer, Direct organisation transfer, In-transit shipment, Cost update,
Receipt into stores, Negative component issue, Negative component return, Staging
transfer, WIP assembly scrap, Assembly completion and Assembly return. It is
important to note that new transaction actions cannot be created.
1.5.3. Transaction Reasons

A transaction reason is a standard means of classifying or explaining the reason for a
transaction. Transaction reasons can be used in all transaction forms with any type of
material transaction. Although not required to define Inventory Transaction Types,
Transaction Reasons impact the handling of transactions. Oracle Inventory provides
transaction reporting and inquiring capabilities by transaction reason. Examples
include: “Theft”, “Misplaced items”, and “Damaged items” entered during cycle
count or physical inventory. In addition, the client can assign a workflow name and
workflow process to a transaction reason.
1.5.4. Shortage Messages

The client can choose to receive an online shortage alert, a workflow-based
notification, or both for system-defined and user-defined transaction types that have
transaction actions of: Receipt into stores, Intransit receipt, Direct organisation
transfer, Assembly completion or Negative component issue.
1.6. Inventory-Related Profile Options

Profile Option Setting Comments
Name
INV: Override Indicates whether backflush transactions can drive Inventory predefines
Neg for the inventory negative even if the inventory a value of Yes for this
Backflush organisation parameter Allow Negative Balances is profile option upon
unchecked. installation. This
profile is updateable
A value of No does not allow backflush transactions at all levels and
to drive on-hand inventory negative even when the should be set to No at
inventory organisation parameter Allow Negative all defined levels.
Balances is unchecked.
INV:Inter- Indicates the currency conversion for inter- Inventory predefines
Organisation organisation transfers between organisations using a value of Corporate
Currency different currencies. Available values are: for this profile for all
Conversion Corporate: An exchange rate defined to standardise levels upon
rates for the company. The corporate exchange rate is installation. This is the
generally a standard market rate determined by preferred option as it
senior financial management for use throughout the allows foreign
organisation. exchange rates to be
Spot: An exchange rate entered to perform conversion controlled at the
based on the rate on a specific date. It applies to the corporate level. This
immediate delivery of a currency. profile is updateable
User :An exchange rate specified when a foreign at all levels.
currency journal entry is entered.
INV: Indicates the currency conversion for inter-company Inventory predefines

Intercompany invoices using different currencies. Available values a value of Corporate
Currency are: for this profile upon
Conversion Corporate: An exchange rate defined to standardise installation. This is the
rates for the company. The corporate exchange rate is preferred option as it
generally a standard market rate determined by allows foreign
senior financial management for use throughout the exchange rates to be
organisation. controlled at the
Spot: An exchange rate entered to perform conversion corporate level. The
based on the rate on a specific date. It applies to the profile is updateable
immediate delivery of a currency. at the Site,
User: An exchange rate specified when a foreign Application, and
currency invoice is entered. Responsibility levels.
INV: RC Indicates the status of Subinventory Replenishment Inventory predefines

Requisition requisitions created by the replenishment processor. a value of Approved
Approval Available values are: for this profile for all
Approved: Requisitions created by the replenishment levels upon
processor are approved. installation. If
Unapproved: Requisitions created by the Unapproved is chosen,
replenishment processor are not approved. Subinventory
Replenishment
requisitions as
unapproved can be
optionally loaded and
the document
approval functionality
in Oracle Purchasing
can be used. This
at all levels.
INV:Accounting Indicates the default category set for defining This profile is
Category Set category references the ’Product Line Accounting’ updateable only at the
function. Site level.
INV:Item Indicates which flexfield is used to define items in Inventory predefines
Master Flexfield MTL_SYSTEM_ITEMS. a value of System
Items for this profile
for all levels upon
installation. This
at all levels.
INV:Transaction Controls the date a client can enter for transactions. Inventory predefines
Date Validation: Available values: a value of Allow date
Allow date in any open period: Allows entry of a past in any open period for
date if it is in an open period. all levels upon
Do not allow past date. Does not allow entry of a date installation.
before the current date.
Do not allow date in past period. Allows entry of dates The profile is
in the current period only. updateable at the Site,
Provide warning when date in past period. Allows entry Application, and
of dates in prior periods after a warning. Responsibility levels.
INV: Enables the client to create only one move order

Replenishment header per request, with each item having its own
Move Order item. MinMax has been enhanced to permit the
Grouping optional execution for all subinventories or for a
group of subinventories. Available values are:
Organisation: The organisation for which to run the
report.
Destination Subinventory: The subinventory for which
to run the report.
INV: Move Order Enables the client to close a partially allocated and The default value is No.
Fill & Kill transacted replenishment move order line. Available
values are:
No: Does not allow cancelling of replenishment move
order lines.
Yes: Allows cancelling of move order lines.
INV: Option enables the creation of Intercompany Invoices The default value is No.
Intercompany for Internal Orders. This profile option is
Invoice for updateable only at site
Internal This profile is used in a concurrent program to create level.
accounts payable, and accounts receivable to decide if
Internal Order transactions should be invoiced.
INV: Advanced This profile option determines whether to use The available values are
Pricing for Inter- advanced pricing engine or customer price list for Yes and No. This
Org Transfers Inter-Org Transfers. profile option is
updateable only at the
Site level.
INV: Allow This is the Profile which controls the option of
Count Allowing Cycle Count Adjustments to Drive Onhand
Adjustments to Negative
Drive Onhand
Negative
INV: Always This option appends AP Invoice number with shipping

suffix inter- organization Id. (11.5.10.2)
Company AP
Invoice number
INV: Material This profile option determines whether material status If the installation never
Status Support is enforced. The available values are Yes and No. This uses material status,
profile option is updateable only at the site level. and set this profile
option to No and
system performance
can improve slightly.
INV: Receive This profile option allows receiving the entire
shipped Lot transaction quantity in to a single lot in receiving
quantity organization even when shipped more than one lot
from the shipping organization in inter-org transit.
INV: This profile summarize consumption releases by Need
Summarize By Date.
consumption
releases by
Need By Date
INV: Target Determines whether data for picking and reservations The available options
Preferred Grade must be filtered to match the preferred grade that is are Yes and No. This
defined on the order line. profile option is
updateable at all levels.
INV: This profile option enables Transaction Reason The available options
Transaction Security. are Yes and No. This
Reasons profile option is
Security updateable only at the
site level.
INV: Use This profile option improves performance during pick The available options
Backorder release by caching backordered items. Receipts that are are Yes and No. This
Caching performed during pick release will not be available for profile option is
allocation. updateable at all levels.
INV: Use This option selects Intercompany AR tax code for
Intercompany intercompany AP. Within Oracle Applications 11.5.10,
AR Tax for intercompany invoice gets a tax variance hold due to
inter-Company incorrect rounding of the tax amount. With this profile
AP option, 'INV: Use Intercompany AR Tax for inter-
Company AP' decides what tax code to be used; but
NOT the tax rate. With this profile option turns on, it
will choose Intercompany AR tax code for
intercompany AP. (11.5.10.2)
INV:Create This profile value specifies whether the locators should Now, Inventory
Locators in be created in autonomous mode or not. In the past, Transaction Workers
Autonomous Inventory Transaction Workers were causing would not cause
Mode deadlocks when running multiple workers in parallel deadlocks when
with dynamic locator segments populated in the running multiple
interface table. workers in parallel with
dynamic locator
segments populated in
the interface table,
when the below profile
is set to Yes. INV:Create
Locators in
Autonomous Mode. (in
11.5.9)
INV:Override This profile option overrides reservation of current
Reservation for allocation for backflush. In the past, even if there are
Backflush reservations/allocations for the component, backflush
transfer will go through if the organization allows
negative inventory balances and the profile
"INV:Override Rsv for Backflush" is YES A new profile
INV_OVERRIDE_RSV_BACKFLUSH' has been created
in 11.5.10.2. This profile option will show be shown as
"INV:Override Reservation for Backflush".If this profile
is set to YES, then a backflush transaction which
consumes existing reservation is allowed. (11.5.10.2)
INV:Validate This profile option determines whether a component The available options
Returned Lot lot that is returned from WIP should be validated are Yes and No. This
against lots that are issued to the same job. profile option is
updateable only at site
level.
INV:Validate This profile option determines whether component The available options
Returned Serial serials that are returned from WIP should be validated are Yes and No. This
against serials that are issued to the same job. profile option is
updateable only at site
level.
INV: Use new There are two transaction managers in inventory. The setting of this
Trx.Mngr. for There is the option to user either for transactions option does not affect
processing processed in the background. Transactions processed certain transactions
online or with immediate concurrent always as such as WIP and
Inventory recommends the new manager. If it is set receiving transactions.
to No, Inventory uses the old transaction manager. All mobile WIP and
VMI Receiving
transactions use the
new transaction
manager. All desktop
WIP and non–VMI
Receiving transactions
use the old transaction
manager. This profile is
updateable at all levels.
1.7. Control Considerations
1.7.1. Business Process Variables

o Companies can define Transaction Types in many different ways, in order to meet
specific business requirements. If incorrect transaction types have been defined by
management and are not used in a structured way for inventory transactions,
transactions may not process as a user expects due to setup differing from the
name of the transaction type.
1.7.2. Control Dependencies

o The Sales Order flexfield must be defined before placing demand, making
reservations, or booking orders in Oracle Order Management.
o Oracle Assets and Oracle Order Management also have access to the Units of
Measure window. UOM should not be entered via Oracle Assets or Oracle Order
Management unless these modules are used without Oracle Inventory or Oracle
Purchasing. Because item definition is completed in these modules, UOM should
be defined via Purchasing or Inventory modules wherever possible.
1.7.3. Control Limitations

o None
1.7.4. Testing Notes

o System reports used to support Financial Statements may need to be assessed by
management in order to promote good and reliable information. These reports
rely on transaction type setups to report inventory information correctly.
1.7.5. Multi-Org Access Control

o Users are able to easily inquire about, plan for and receive expected shipments
against purchase orders or requisitions or RMAs originating in multiple operating
units without needing to close windows and change responsibilities.
1.7.6. Dual Unit of Measure Control

o It enables users to transact inventory in two unrelated units of measure where the
conversion between the measures varies from lot to lot or from one transaction to
the next.
1.7.7. Material Status Control

o Enables users to assign a material status to the material in an inventory lot, serial,
sub-inventory, or locator and to use that status to restrict transactions. This
functionality was previously available to Oracle Warehouse Management only.
2. Organisations
In Oracle, organisations are a required component of employee assignments and inventory,
order management and purchasing. A company may define as many organisations as
needed within a business group. Within the Oracle application, Organisations can be
created for various reasons including:
 Business groups
 External organisations (for example, tax offices, insurance carriers, disability
organisations, benefit carriers, or recruitment agencies)
 Internal organisations (for example, departments, sections or cost centers/other
companies)
 GREs (selected legislations only)
Within Oracle Inventory, 2 organizations are often defined, Inventory and Cost
Organizations.
2.1. Inventory Organizations

An organization must have the "Inventory Organization" classification enabled in order for
the Organization to be used as an Inventory Organization. Within Inventory, organisations
can be defined as a business unit such as a plant, warehouse, division, department, etc. For
each Inventory Organisation, certain configurations must be defined, including Accounting,
Organisation and Receiving Parameters, as outlined in the sections below.
In Oracle Manufacturing, each inventory organisation must have a cost structure defined.
The Copy Inventory Organization feature is enhanced and now allows users to copy
existing inventory structures to new ones.
2.2. Costing Organizations

The organisation that holds the costs is called the cost master organisation. Costs are
maintained within the cost master organisation. The cost master organisation can be the
same organization as the item master or can be a manufacturing organisation using Work in
Process (WIP).
If costs are to be shared across organizations, the two item attribute controls, Costing
Enabled and Inventory Asset Value determine whether costs are shared across
organizations. If the client plans to share costs across standard costing organisations, the
attributes' control level must be set to the item level. Costs across standard cost
organisations can be shared as long as the child cost organisations have not enabled WIP.
2.3. Accounting Organization

The client can define the Primary Ledgers, Secondary Ledgers, , name of the Legal Entity,
Operating Unit of the Organization, Reporting Currencies, and Accounting Rules in the
Subledgers.
2.4 Organisation Parameters

Organisation Parameters are a set of controls, default options, and default account numbers
that determine how an Inventory organisation functions. They include 6 different sets of
configurations, as outlined below.
2.4.1. Inventory Parameters

Inventory Setting Comments
Parameters
Item Master Each inventory must be associated with an
Organisation Item Master.
Calendar Assigns a calendar to the Organization. Refer to the GL Practice Aid for
more information on Calendars.
Process Configuration is enabled if the inventory
Enabled organisation is a Process Manufacturing
checkbox organisation.
Demand Demand classes segregate scheduled Oracle Master Scheduling/MRP
Classes demand and production into groups, and Oracle Supply Chain
allowing the client to track and consume Planning uses this demand class
those groups independently. during forecast consumption,
and shipment and production
relief.
Move Order Specifies the number of days a move order The workflow approval process
Timeout requisition can wait for approval. sends a notification to the item
Period planner when a move order
requisition requires approval.
After the first timeout period, if
the recipient has not approved
or rejected the order, a reminder
notice is sent. After the second
timeout period, the order is
automatically approved or

Parameters
rejected, depending on the
Move Order Timeout Action
value.
Move Order Determines the process flow if requisitions Select this option and set the
Timeout are not approved within a specified period. Move Order Timeout Period to 0
Action Approve automatically: After the second if the move order approval
timeout period, move order requisitions are process wants to be bypassed
automatically approved. and automatically approved
Reject automatically: After the second timeout move order requisitions.
period, move order requisitions are
automatically rejected,
Locator An Oracle Manufacturing technique for
Control enforcing use of locators during a material
transaction. Values include:
 None: Inventory transactions within this
organisation do not require locator
information.
 Prespecified only: Inventory transactions
within this organisation require a valid,
predefined locator for each item.
 Dynamic entry allowed: Inventory
transactions within this organisation require
a locator for each item. The client can choose
a valid, predefined locator, or define a
locator dynamically at the time of
transaction.
 Determined at subinventory level: Inventory
transactions use locator control information
that can be defined at the subinventory
level.
Allow Determines whether inventory transactions If insufficient quantity on hand
Negative can drive the inventory balance of an item exists in a supply subinventory
Balances negative. to satisfy backflush demand,
Oracle Work in Process forces
the supply subinventory balance
negative, ignoring this option
setting.
Capacity The Inventory's total maximum load weight,

maximum volume, and their units of
measure.
2.4.2. Costing Info

Costing Setting Comments
Parameters
Costing One method has to be chosen, out of two For more information on
Method options: costing, refer to the costing
 STANDARD: This type of costing is for section of this document.
material and resource costs and is the
default for Oracle Inventory.
 AVERAGE: This type of costing is for

material costs.
Project Cost If the Project Cost Collection Enabled check

Collection box is selected, and the Enable Project
Enabled References check box, located in the Project
Manufacturing Parameters is also selected,
the cost collector process can transfer costs
to project accounting.
Rates Cost When the Costing Method is Average, the

Type Average Rates Cost Type can be entered.
Transfer to This indicates if all Inventory transactions This should not be set to 'None'.
GL are transferred in detail to the General The purpose of the 'None'
Ledger. option was so that accounting
In Detail: all transactions and all accounting distributions are not created for
lines are transferred to the General Ledger. Perpetual Accounting if Periodic
Summary: all transactions and the total of Accounting is used. The 'None'
each general ledger accounting lines are option is not to be used for
transferred to the general ledger. eliminating accounting
None: No accounting distributions are distributions all together.
transferred to the general ledger.
Cost cut-off All transactions on or later than this date For inter-organisation transfers,
date will not be costed. The default time is the using standard costing, a
first day of the instance's installation, receiving organisation will not
although another time can be chosen cost a receipt if the sending
optionally. organisation did not already
If blank, all available transactions will be cost the transaction.
costed.
If a date is entered, all transactions prior to The standard cost update
this date will be costed. process can be performed on the
cost cutoff date. Cost processing
can be restarted by changing the
cutoff date to blank, or a future

Parameters
date.
Valuation Accounts are defined which are used the These values default from the
Accounts value the goods held within the inventory, organization's cost group, but
including: can be overwritten for each
Material: An asset account that tracks organization.
material cost. For average costing, this
account holds inventory and in-transit Once transactions are performed
values. against the material account, it
Material Overhead: An asset account that cannot be changed.
tracks material overhead cost.
Resource: An asset account that tracks
resource cost.
Overhead: An asset account that tracks
resource and outside processing overheads.
Outside processing: An asset account that
tracks outside processing cost.
Expense: The expense account used when
tracking a non-asset item.
2.4.3. Revision, Lot, Serial

Revision/Lot/Serial Setting Comments
Parameters
Starting Revision A starting revision needs to be entered,
and serves as the default for each new
item.
Lot Control - One of the 2 values must be selected:
Uniqueness  Across items: Enforces unique lot
numbers for items across all
organisations.
 None: Unique lot numbers are not
required.
Lot Control - One of the 3 values must be selected:

Generation  User-defined: Configuration allows
users to define lot numbers when
receiving items.
 At organisation level: Configuration
drives the system to automatically
generate lot numbers for the items
when they are received. The system

Parameters
auto-creates the lot numbers using
values entered in the Prefix, Zero Pad
Suffix, and Total Length fields.
 At item level: Configuration allows
users to enter starting lot number
prefix and the starting lot number
when the item is defined.
Lot Control - Zero Indicates whether to add zeroes to right-

Pad Suffix: justify the numeric portion of lot.
Lot Control - Prefix An alphanumeric lot number prefix can
be defined to use for system-generated
lot numbers when generation is at the
organisation level.
Lot Control - Total The maximum length for lot numbers can If Oracle Work in Process is
Length be defined. used and the WIP parameter
is set to default the lot
number based on inventory
rules, then WIP validates the
length of the lot number
against the length that is
defined in this field.
Serial Control - One of the 3 values must be selected:
Uniqueness  Within organisation: Enforces unique
serial numbers within the current
organisation.
 Within inventory items: Enforces unique
serial numbers for inventory items.
 Across organisations: Enforces unique
serial numbers throughout all
organisations.
Serial Control - One of the 2 values must be selected:

Generation  At organisation level: Defines the starting
prefix and serial number information
for items using the information the
client enters in the following fields of
this window.
 At item level: Defines the starting serial
number prefix and the starting serial
number when the client defines the

Parameters
item.
Serial Control - Indicates whether the system will suggest If the "Yes, User Defined"
Allocate Serial serial numbers as part of the move order option is enabled, a user
Numbers line allocating process. One of the 3 must manually enter the
values must be selected: serial numbers in order to
 Yes transact the move order.
 No
 Yes, User Defined
Genealogy In order to support increased product

Enhancements composition visibility in Oracle
Inventory, the lot and serial genealogy
inquiries have been consolidated. In
addition, for Oracle Discrete
manufacturing users, operators
performing the WIP issue transactions
can tie their component lot and/ or serial
numbers with a parent assembly.
Enhanced Lot In order to support both lot and serial

Transactions controlled items in some business
processes, Oracle Inventory's lot split,
merge and translate transactions can now
be performed on items that are both lot
and serial controlled.
Support for In this feature, the item attribute will

Indivisible Lots indicate to the system that, during
reservations and allocation, the system
must allocate the entire lot quantity in a
given location or none at all.
2.4.4. ATP, Pick, Item-Sourcing Parameters

ATP, Pick, Item- Setting Comments
Sourcing
Parameters
ATP Default - ATP rules define the options used to If the client uses Oracle Order
Rule calculate the available to promise quantity Management, the default is
of an item. A default ATP rule must be the ATP rule for the Master
selected. organisation.

Sourcing
Parameters
Picking Defaults This value is the default picking rule used This rule will not be
- Rule within Order Management to define the employed in a WMS enabled
priority in which items are picked. organisation. The WMS
picking rules will be used.
Picking Defaults This value indicates the priority with The value that is entered here
- Subinventory which the client picks items from a displays as the default when a
Order subinventory, relative to another subinventory is defined.
subinventory.
Picking Defaults This value indicates the priority with The value that is entered here
- Locator Order which the client picks items from a displays as the default when
locator, relative to another locator. the client defines a locator.
A picking order of 1 means

that order management
functions pick items from that
subinventory or locator before
others with a higher number
(such as 2, 3, and so on).
Picking Defaults If the configuration is enabled, pick In WMS (Warehouse

- Pick confirmation will occur automatically. If Management System)-enabled
Confirmation disabled, pickers will be required to organizations, this
Required manually pick confirm the item. configuration should be
disabled so that picking tasks
can be tasked to users.
Item Sourcing One of 3 source types for item
Detail - Type replenishment must be defined:
 Inventory: Replenish items internally
from another subinventory in the same
organisation or another organisation.
 Supplier: Replenish items externally,
from a supplier the client specifies in
Oracle Purchasing.
 None: No default source for item
replenishment.
Item Sourcing If the Item Sourcing Detail Type value is If the Item Sourcing Detail
Detail - Inventory, a sourcing organization can be Type value is Supplier, this
Organisation defined. value is disabled.

Sourcing
Parameters
Item Sourcing If the Item Sourcing Detail's Type value is If the Item Sourcing Detail
Detail - Inventory, a sourcing subinventory Type value is Supplier, this
Subinventory organization can be defined. value is disabled.
2.4.5. Inter-Org Information

Inter-Org Setting Comments
Information
Parameters
Inter- One of 4 must be selected: If Predefined percent is
organisation  None: Do not add transfer charges to a selected in the Inter-
Transfer Charge material transfer between organisations. Organisation Transfer Charge
 Predefined percent: Automatically add a field, a percentage value
predefined percent of the transaction needs to be added to add to a
value when the client performs the material transfer.
inter-organisation transfer.
 Requested value: Enter the discrete value
to add when the client performs the
inter-organisation transfer.
 Requested percent: Enter the discrete
percentage of the transfer value to add
when the client performs the inter-
organisation transfer.
Inter- Default inter-organisation cost accounts For average cost

organisation are used as defaults when defining organisations, the Intransit
Transfer shipping information in the Inter- Inventory account is the
Accounts Organisation Shipping Networks default material account.
window. They include:
 Transfer Credit: The default general
ledger account (usually an expense
account) used to collect transfer charges
when this organisation is the shipping
organisation.
 Purchase Price Variance: The default
general ledger account (usually an
expense account) used to collect the
purchase price variance for inter-
organisation receipts into standard cost
Inter-Org Setting Comments

Information
Parameters
organisations.
 Receivable: The default general ledger
account (usually an asset account) used
as an inter-organisation clearing
account when this organisation is the
shipping organisation.
 Payable: The default general ledger
account used as an inter-organisation
clearing account (usually a liability
account) when this organisation is the
receiving organisation.
 Intransit Inventory: The default general
ledger account (usually an asset
account) used to hold intransit
inventory value.
2.4.6. Other Accounts

Other Accounts Setting Comments
Parameters
Receiving Receiving accounts are used to record Purchase Price Variance
Accounts receiving transactions: account is not used with the
 Purchase Price Variance: The variance average cost method.
account used record differences
between purchase order price and The Invoice Price Variance
standard cost. account is usually defined as
 Invoice Price Variance: The variance an expense account.
account used by Payables to record
differences between purchase order
price and invoice price.
 Inventory AP Accrual: The liability
account that represents all inventory
purchase order receipts that are not
matched to Payables invoices.
 Encumbrance: An expense account used
to recognise the reservation of funds
when a purchase order is approved.
Profit and Loss Additional accounts are defined when
Accounts creating the organisation, including:
 Sales: The income statement account
that tracks the default revenue account.
Other Accounts Setting Comments

Parameters
 Cost of Goods Sold: The income statement
account that tracks the default cost of
goods sold account.
Project Clearance When performing miscellaneous issues to
Account capital projects, the project clearance
account is used to post the distributions.
Cost Variance When average costing is enabled, this
Account account is used to cost negative quantity
balances caused by issuing inventory
before receipts.

o All Oracle installed applications share the information entered in the
Organisation window, which is accessible via HR, Inventory, Order Management,
and Purchasing Modules. Therefore organisation names should be unique within
a business group, and business group names should be unique across the
applications network.
o Although it is possible to create two organisations with the same name in
different business groups, this is not recommended. This is because a profile
option exists within the HR module (HR: Cross business group profile option)
that allows sharing of certain information across all business groups. (Refer to HR
practice aid for further details on organisations setup).
o All account combinations will differ per client. However they should be assigned
the correct account type classification, (For example, a 'Material' or 'Material
inventory' GL account should be defined in the Material account field, and an
asset account should not be used in the Expense Valuation account field).
o Under average costing, Valuation accounts (except for Expense) are used for
subinventory transactions and cannot be updated.
o For standard costing, only the Purchase Price Variance, Inventory A/P Accrual,
Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts are
required. The other accounts are used as defaults.
o For average costing, only the Material, Average Cost Variance, Inventory A/P
Accrual, Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts
are required. The other accounts are used as defaults or are not required.

o None

o Under standard costing, valuation accounts are defaulted when subinventories
are defined and can be overridden.
o The Move Order approval process can be overridden (automatically approving
move order requisitions) by setting to 0 days for the “Move Order Timeout
Period” and select Automatically Approve for the Move Order Timeout Action.
This can also be done by assigning the planner who approves move order lines to
the item or the organisation.

o Clients should have a valid reason for allowing negative balances, as negative
quantities can not be physically counted & adjustment processes should ensure
reasons for negatives are resolved prior to physical counting and/or period end.
3. Subinventories
Subinventories are unique physical or logical separations of material inventory, such as raw
inventory, finished goods, or defective material. All material within an organisation is held
in a subinventory therefore; at least one subinventory should be defined. For each
subinventory, header, main, and account parameters must be defined.
3.1. Subinventory Setup - Header

Header Setting Comments
Parameters
Name Defines a unique alphanumeric name for
the subinventory.
Status Indicate the material status of this This status is not overridden
subinventory (for example, active, QC by the status of any locator,
hold, quarantine). This controls whether lot or serial within this
the subinventory's materials are subinventory. This field is
transactable. used if the client has Oracle
Warehouse Management
installed.
Default Cost Indicates the default cost group for this This feature is available if the
Group subinventory. client has Oracle Warehouse
Management installed, and
they are working with a WMS
enabled organisation.
If the cost group assignment
rules fail to identify a cost
group for newly received
Header Setting Comments

Parameters
material, this cost group will
be assigned. This cost group
will remain with the material,
even through subinventory
transfers, until the client
performs a cost group change
transaction.
Type Indicate the type of subinventory, Storage
or Receiving.
3.2. Subinventory Setup - Main

The following may be defined when creating subinventories:
Main Parameters Setting Comments
Quantity Tracked Indicates whether each transaction for this If disabled, on-hand balances
subinventory updates the quantity on are not maintained and they
hand for the subinventory. cannot enable the Asset
Inventory, Include in ATP,
Reservable, or Nettable
options.
This value can only be

updated if there is no on-hand
quantity within the
subinventory.
Asset Indicates whether to maintain the value of This value can only be
Subinventory this subinventory on the balance sheet. updated if there is no on-hand
quantity within the
subinventory.
Depreciable Indicates whether this subinventory is

depreciable.
Include in ATP Indicates whether to include items in this
subinventory in ATP calculations.
Allow Indicate whether to include this
Reservation subinventory when the client performs
available-to-reserve calculations.
Nettable Indicates whether the planning process
uses the on-hand balance of these
subinventory items as available inventory.
Enable PAR Indicate if Periodic Automatic If enabled they cannot
Level Planning Replenishment (PAR) is enabled. perform min-max planning

for this subinventory.
Locator Control One of 4 must be selected: The client can select an option
 None: Inventory transactions within this only the Locator Control field
subinventory do not require locator in the Organisation
information. Parameters window is set to
 Prespecified: Inventory transactions "subinventory".
within this subinventory require the
client to enter a valid predefined locator This value can only be
for each item. updated if there is no on-hand
 Dynamic entry: Inventory transactions quantity within the
within this subinventory require the subinventory.
client to enter a locator for each item. .
The client may choose a valid predefined
locator, or define a locator dynamically
at the time of transaction.
 Item level: Inventory transactions use
locator control information that the client
defines at the item level.
Default Locator Indicate the default locator status of the This feature is available only
Status locators in this subinventory. if the client has Oracle
Warehouse Management
installed.
Picking Order Enter a picking order value for use by If the client has Oracle
Oracle Warehouse Management to Warehouse Management
sequence picking tasks. This value installed, this field determines
indicates the priority with which the client the picking path through the
picks items from this subinventory, warehouse and not the order
relative to another subinventory. in which material is allocated
for a sales order.
A picking order of 1 means

that order management
functions pick items from that
subinventory or locator before
others with a higher number
(such as 2).
Dropping Order Enter a numeric dropping order to Oracle Warehouse
indicate the priority for dropping items in Management uses this value
this locator relative to another locator. to sequence tasks.
Inactive On Optionally, enter an inactive date for the Before a subinventory is
subinventory. disabled, no open jobs or
schedules within Oracle Work

in Process and no active bills
in Oracle Bills of Material
should exist.
Location Optionally, enter a location for the
subinventory.
Picking UOM Indicate the picking unit of measure used This feature is available if the
to store material in this subinventory. This client has Oracle Warehouse
value is used by the WMS rules engine to Management installed, and
divide picks across subinventories in the they are working with a WMS
warehouse. enabled organisation.
Default This field defaults the default count type It does not affect existing
Replenishment on the Replenishment Lines window Default Count Type headers.
Count Type  Order Maximum
 Order Quantity
Lead Times - Pre- Optionally, enter a pre-processing lead This lead time is used when
Processing time for items in this subinventory. the client uses min-max
planning at the subinventory
level.
Lead Times - Optionally, enter a processing lead time This lead time is used when
Processing for items in this subinventory. the client uses min-max
level.
Lead Times - Optionally, enter a post-processing lead This lead time is used when
Post-Processing time for items in this subinventory. the client uses min-max
level.
Sourcing - Type One of 3 source types for item
replenishment must be defined:
 Inventory: Replenish items internally,
from another organisation.
 Supplier: Replenish items externally,
from a supplier the client specifies in
Oracle Purchasing.
 Subinventory: Replenish items internally,
from another subinventory in the same
inventory organisation.
Sourcing - Select the organisation used to replenish The client must enter a value
Organisation items in this subinventory. in this field if they entered
Inventory in the sourcingType
field. The organisation they
select must have a shipping

network defined.
Sourcing - Select the subinventory used to replenish The client must enter a value
Subinventory items in this subinventory. in this field if they entered
their current organisation in
the sourcing Organisation
field.
3.3. Subinventory Setup - Accounts

Accounts Setting Comments
Parameters
Subinventory Accounts are defined when setting up The default values for these
Accounts subinventories, including: accounts are the accounts
 Material: A general ledger account assigned for the
(usually an asset account) to accumulate subinventory's organization.
material costs for items received into this
subinventory. When using average costing,
 Outside Processing: A general ledger valuation accounts can be
account (usually an asset account) to entered, but they are not used.
accumulate outside processing costs for Average costing uses only the
this subinventory. Expense and Encumbrance
 Material Overhead: A general ledger accounts. When using
account (usually an asset account) to standard costing, and Oracle
accumulate material overhead or burden Bills of Material is installed,
costs for this subinventory. all asset accounts are
 Overhead: A general ledger account required. When using
(usually an asset account) to accumulate standard costing and Oracle
resource or department overhead costs Bills of Material is not
for this subinventory. installed, only entering the
 Resource: A general ledger account Material and Material
(usually an asset account) to accumulate Overhead accounts is
resource costs for this subinventory. required.
 Expense: A general ledger account to
accumulate expenses for this The Encumbrance account is
subinventory. For expense used only in conjunction with
subinventories, this account is charged Oracle Purchasing.
when the client receives any item. For
asset subinventories, this account is
charged when they receive an expense
item.
 Encumbrance: A general ledger account to
hold the value of encumbrances against
items in this subinventory. This account
Accounts Setting Comments

Parameters
is used for purchase order receipts and
returns.
4. Items
Items are important as for example, they may be set up with accounting rules, which affect
revenue recognition. Also, the settings at the Item level override any parameters set at the
Inventory Organization level. Before a physical item can be entered into Oracle Inventory, a
number of configurations must be defined. These include Default Category Sets, Categories,
Category Sets, Item Catalogs, Item Attribute Controls, and Statuses.
4.1. Default Category Sets

Upon installation of Oracle Inventory, default category sets are created to each of the
following functional areas: Inventory, Purchasing, Order Management, Costing,
Engineering, and Planning. Inventory makes the default category set mandatory for all
items defined for use by a functional area. Default category sets are required so that each
functional area has at least one category set that contains all items in that functional area.
These defined values are utilized by other configurations to drive item controls, costing and
accounting.
When entering an item, the item's "Item Defining Attribute" can be enabled. Once this
configuration is enabled, the item is then available for use in the associated functional area.
The following table presents item defining attributes and their functional relationship:
Functional Area Item Defining Enabling Value

Attribute
Inventory Inventory Item Yes
Purchasing Purchased or Yes
Internal Ordered Item Yes
Master Scheduling/ MRP Planning MRP Planning, MPS
MRP Method Planning
Cost Management Costing Enabled Yes
Engineering Engineering Item Yes
Order Management Customer Ordered Yes
Item
Service Support Service, or Yes
Serviceable Product Yes
Refer to the Item Attribute Controls section for more information on Item Defining
Attributes.
4.2. Categories
Categories, also known as Category Codes, are codes used to group items with similar
characteristics, such as plastics, metals, or glass items. Categories must be defined, as all
items must be assigned to a category.
4.3. Category Accounting

Once Categories are defined, General Ledger accounts must be assigned for each category
within a subinventory. These GL accounts include the Material, Material Overhead,
Overhead, Resource, Outside Processing and Expense accounts, as noted below.
4.4. Category Sets

Category sets are used to group categories for various reports and programs. In addition to
the category set Inventory, which is seeded when the client installs Oracle Inventory, the
client can also create other category sets such as John's Priority or Jane's Priority. Category
sets can be controlled at the Master or Organization Level. Categories can belong to multiple
category sets, and each category set may be used as a means to develop custom lists of items
on which to report and sort.
4.5. Item Catalogs

When defining an item catalog, distinct item catalog groups are defined. Each group has
unique characteristics (called descriptive elements) that completely describe items
belonging to the group. For example, an item catalog group called Computer could have a
descriptive element called Processing Speed. Possible values for Processing Speed might be
100MHZ, 133MHZ, and so on. Items are then assigned to a specific item catalog.
4.6. Item Attribute Controls

Item attributes are the collection of information about an item. Using the Item Attribute
Controls window, the client can designate whether an item attribute is defined/maintained
at the Master level or the Organisation level. The control level they define for an attribute
applies to all items. Defining attribute controls does not determine the value of an attribute,
only the level at which it is controlled. The client assigns a value to the attributes when they
define an item.
Attributes at the Master level are the same across all organisations, giving the client
centralised control over the values assigned. If an attribute is maintained at the Organisation
level, they can have different attribute values in each organisation the item is assigned to.
For example, the client can define and maintain an item’s unit of measure at the Master
level. This means that the unit of measure is always the same for the item, no matter in
which organisation they assign the item. Or, the client can designate that an item’s unit of
measure is maintained at the Organisation level. This means that each organisation they
assign the item to can have a different unit of measure for the item.
There are several steps to defining Item Attribute Controls:

Group Name: Displays the name for a group of attributes. Attributes are grouped by
function, such as Main, Inventory, and Receiving. When the client defines or updates
items, defines templates, or views item attributes, they can display the attributes for a
particular group.
Control Level
Master Level: Define and maintain this attribute at the Master level. For the same item,
the values of this attribute are identical across all organisations.
Org Level: Define and maintain this attribute at the Organisation level. For the same
item, each organisation may define a different value for this attribute.
Status Setting
Defaults Value: Value of this attribute, as defined by the status code, defaults when
the client assigns the status to an item. They can change this default value.
Not Used: Use neither default nor status control.
Sets Value: Value of this attribute, as defined by the status code, defaults when the
client assigns the status to an item. Once assigned, they cannot change the default.
4.7. Item Status and Status Attributes

When an item is defined, the item's status (active, production, obsolete, inactive, for
example), provides default values for certain item attributes. These specific attributes, called
Status Attributes, control the functionality of an item. The following Status Attributes can be
defined:
Status Attribute Description

BOM Allowed A bill of material can be created for the item.
Build in WIP The item can be built on a discrete job, and/or
repetitive schedule.
Customer Orders The item can be utilized on a sales order.
Enabled
Internal Orders The item can be used when creating an internal

Enabled sales order.
Invoice Enabled The item can be used when creating an invoice.
Transactable The item can be transacted in Oracle Inventory,

Oracle Order Management, Oracle Purchasing and
Oracle Work in Process.
Purchasable The item can be used on a purchase order.
Stockable The item can be stocked in an asset inventory.
Associated with each status attribute is a Status Setting option. This option determines
whether a status attribute value is not updatable, defaulted and updatable, or not used
when an item is defined. Certain attributes should not be updatable for certain statuses.
For example, when defining an 'inactive' status code, all status attributes should be
disabled, and for each status attribute, its usage should be set to not updatable.

o Status codes defined should have their attributes established in such a way that it
will cause the desired effect once the item status is applied. In the least a status
code of 'Active' and 'Inactive' would be expected, with all attributes being enabled
for 'Active' status and all attributes being disabled for 'Inactive'.
o When the values for a status are updated, all items to which it is assigned are also
updated.
o The client may change a functional area's default category set under certain
conditions. They should ensure that every item within the functional area belongs
to the new default category set (which replaces the existing default category set).
If the item defining attribute of the functional area is controlled at the
Organisation level then the new default category set should also be controlled at
the Organisation level.

o For each purchasing category, a valid category set must be defined before
transactions can be entered into Oracle Purchasing.

o None

o None
5. Costing
There are several parameters that must be set in order operate, process and control costing
within Oracle Inventory. The following sections discuss the required system parameters.
5.1. Cost Types

A cost type is a set of costs (uniquely identified by name) used for historical, current and future
costs, as well as for simulation purposes. Cost Types must be defined before item costs can be
entered. Two cost types are predefined, Frozen (for standard costs) and Average (for average
costing). Each cost type has its own set of cost controls. The following key values can be defined
for each cost type:
Default Cost Type: Reflects the current organisation’s costing method, either Frozen or Average.
Multi-Org: If enabled, this cost type is shared with other organisations. Note the only the cost
type name is shared and not the costs. If disabled, this cost type name is only available to the
inventory organisation that creates it.
Allow Updates: If enabled, this cost type can be changed by processes such as mass edits, copy
cost information, cost rollup, and cost update. To freeze the cost information in this cost type,
disable Allow Updates. Even if updates are not allowed, this cost type can be used to report,
inquire, and update Frozen costs. If Multi–Org is checked, Allow Updates is disabled.
In a manufacturing average costing organization, two costs types are required for inventory
valuation and transaction costing, the Average cost type and a user-defined Average Rates
cost type. These two cost types are defined as follows:
Average: This cost type holds the current average unit cost of items on hand, and is used to
value transactions such as issues and transfers. This cost type is seeded and does not have to be
defined.
Average Rates: This cost type holds any user-defined costs used to in costing transactions.
5.2. Cost Groups

A Cost Group (also known as a project cost group) is a collection of valuation accounts used
to group items with similar GL accounts. If the Project Cost Collection Enabled parameter is
defined for the Inventory Organisation, cost groups can be utilized. The organisation’s
default cost group is seeded if the client installs Cost Management. For each cost group, five
elemental subinventory valuation accounts must be defined, including:
Valuation Account Setting
Material: A general ledger account to accumulate material costs for this cost
group. This is usually an asset account.
Material Overhead A general ledger account to accumulate material overhead or burden
costs for this cost group. This is usually an asset account.
Resource: A general ledger account to accumulate resource costs for this cost
group. This is usually an asset account.
Outside Processing: A general ledger account to accumulate outside processing costs for
this cost group. This is usually an asset account.
Overhead: A general ledger account to accumulate resource overhead or
department overhead costs for this cost group. This is usually an asset
account.
Average Cost Variance: A general ledger account to accumulate the balances that may occur
when transactions are processed for an item whose on-hand inventory
is negative. This account represents the inventory valuation error
caused by issuing inventory before receiving it.
These values default into the organization's cost group, but can be overwritten for each
organisation. WIP accounting classes can also be defined with a project cost group. This
association defines which WIP accounting classes are valid for use with the project or
projects belonging to this cost group.
5.3. Activities
Activities are actions or tasks performed that uses a resource or incurs a cost. Activities may
be directly related to building items, such as runtime or setup time; or they may be indirect,
such as purchase order generation, payroll, and engineering activities. Activities can be
used to assign indirect costs to items based upon the effort expended to obtain or produce
the item, rather than as a percentage of a direct cost or an amount per item. The goal of
activity based cost accounting is to accurately identify product costs, especially overhead
costs.
For each defined activity, 3 fields are generally defined.

Activity/Description: A description of the activity.
Multi Org: If this configuration is disabled, the activity name is only available to the
organization that creates it. If enabled, only the activity name is shared, not the activity across
organizations.
Default Basis: Default basis is the method used to charge a transaction or apply product costs.
This value is defaulted into the sub-element when defining item costs. One of 3 values should
be selected:
o Activity: Used to apply activity costs to items.
o Item: Used to earn and apply item costs for all subelements.
o Lot: Used to earn and apply lot costs for all subelements.
In addition, a cost can be associated with an activity. If the activity is to be costed, a cost
type has to be associated with the activity. For more information on Sub-elements, refer to
the subelement section below.
5.4. Cost Elements

Product costs are the sum of their elemental costs. Oracle has five predefined, seeded cost
elements. They are:
Element Element Description
Material The raw material/component cost at the lowest level of the bill
of material determined from the unit cost of the component
item.
Material Overhead The overhead cost of material, calculated as a percentage of the
total cost, or as a fixed charge per item, lot, or activity.
Overhead The overhead cost of resource and outside processing,
calculated as a percentage of the resource or outside processing
cost, as a fixed amount per resource unit, or as a fixed charge
per item or lot passing through an operation. Overhead is used
as a means to allocate department costs or activities.
Resource Direct costs, such as people (labour), machines, space, or
miscellaneous charges, required to manufacture products.
Outside Processing This is the cost of outside processing purchased from a

supplier. Outside processing may be a fixed charge per item or
Element Element Description

lot processed, a fixed amount per outside processing resource
unit, or the standard resource rate times the standard units on
the routing operation.
5.5. Sub Elements

Each cost element must be associated with one or more sub-elements. Sub-elements can be
used as smaller classifications of the cost elements. As many sub-elements as needed can be
created. A common configuration found in sub-elements is the Basis Type. Basis types
determine how costs are assigned to the item. Basis item values include:
Lot: Used by all 5 sub-elements. For material and material overhead sub-elements, lot is used to
assign a fixed lot charge to items or operations. The cost per item is calculated by dividing the
fixed cost by the item's standard lot size for material and material overhead sub-elements. For a
resource, outside processing, or overhead sub-elements, the cost per item is calculated by
dividing the fixed cost by the standard lot quantity moved through the operation.
Item: Used with material and material overhead sub-elements to assign a fixed amount per
item, generally for purchased components. Used with resource, outside processing and
overhead sub-elements to charge a fixed amount per item moved through an operation.
Resource Value: Used with the overhead sub-element only and usually expressed as a rate. It
applies overhead to an item, based on the resource value earned in the routing operation. The
overhead calculation is based on resource value: resource value earned in the operation X
overhead rate.
Resource Units: Used with the overhead sub-element only. Used to allocate overhead to an item,
based on the number of resource units earned in the routing operation. The overhead
calculation is based on resource units: resource units earned in an operation X overhead rate or
amount.
Total Value: Used with the material overhead sub-element only, this assigns material overhead
to an item, based on the total value of the item. Used to directly assign the activity cost to an
item, the material overhead calculation is based on activity: activity occurrences / number of
items X activity rate.
A description of each sub-element and its use is below.
5.5.1. Resource
A resource is anything required to perform, schedule, or cost, including but not
limited to: employees, machines, outside processing services, and physical space.
Resource Sub-elements are used to define the time an assembly spends at an
operation and the cost incurred at the operation. A resource and usage rate for all
scheduled activities is required in a routing. Used generally for Bill of Material
Transactions, Resources can also be used for Inventory Costing Transactions. For
more information on how to define resources, refer to the Bill of Material User Guide
at http://www.oracle.com/technology//index.html
5.5.2. Material
Material Sub-elements classify material costs, such as plastic, steel, or aluminum.
Each material subelement has the following components:
o Material Description: A freeform description of the material subelement.
o Default activity: This activity is defaulted each time the subelement is used to
define an item cost. The default activity value is taken from the previously
defined activities.
o Default basis: This value (either Item or Lot) is used as the default cost basis when
defining an item's cost.
5.5.3. Material Overhead

Material Overhead is used to distribute costs associated with materials. Material
overhead is earned when an item is received into inventory or completed from work
in process. The Material Overhead cost subelement adds indirect costs to item costs
on either a percentage basis or as a fixed amount. Both Overhead and Material
subelement are entered within the same form (Overheads). Material Overhead
subelements can contain:
o Cost Element: Material Overhead.
o Absorption Account: The GL account value defined here is used to offset the
corresponding overhead cost pool in the general ledger.
o Default Basis: Activity is defaulted each time the subelement is used to define an
item cost. The default activity value is taken from the previously defined
activities.
o Default basis: This value (Item, Lot, Resource Unit, Resource Value, Total Value, or
Activity) is used as the default cost basis when defining an item's cost.
o Resource: For resources associated with the Material Overhead Cost Type, a cost
type and the resource names must be associated with the appropriate Material
Overhead subelement.
5.5.4. Overhead
Overhead is used as a means to allocate department costs or activities. The Overhead
cost subelement adds indirect costs to item costs on either a percentage basis or as a
fixed amount. Overheads can be defined based on the number of units or lot moved
through the operation, or based on the number of resource units or value charged in
the operation. Multiple overhead sub-elements can be defined to cover both fixed
and variable overhead, each with its own rate. Multiple overhead sub-elements can
be assigned to a single department, and vice versa. In addition to the fields contained
in the Material Overhead section, Overhead subelements can also contain Rates. Each
Cost Type has an associated department and rate, which will be used during item
costing.
5.5.5. Outside Processing

Outside Processing represents services provided by suppliers. Outside processing
may be a fixed charge per item or lot processed, a fixed amount per outside
processing resource unit, or the standard resource rate times the standard units on
the routing operation. To implement outside processing costs, a routing operation
must be defined, and an outside processing resource must be used.

o By restricting the use of a WIP class to only one cost group, commingling of Work
in Process costs for multiple projects into one set of valuation accounts can be
avoided.

o None

o None

o None
E. Standing Data Overview
The Inventory Cycle has several key standing data points, including:
Item Master
Item Entry
Item Costs
ABC Analysis
The chart below illustrates how standing data interfaces with key Inventory transactions.
1. Item Master
Items are defined in one Organisation, called the Item Master. For each Inventory-defined
organization, there is no functional or technical difference between the Item Master
organisation and other defined organisations. However, for simplicity, Oracle recommends
that only one Item Master is defined. This is because:
Multiple item masters are distinct entities, with no relationship to each other.
Items cannot be associated in one item master organisation with another item master
organisation.
Items across item master organisations cannot be copied.
However, items defined in the master organisation can be assigned to any other
organisation. These other organisations (child organisations) refer to the Item Master for the
item's definition and attributes.
Some of System Options when setting up an Item Master for R12 version:
1. “Inventory” tab:
a. Lot: maturity days and hold days. Maturity day is the number of days added to
the lot creation date to determine the lot maturity date. If no number is entered,
the system assumes the lot is mature at creation. Lot Creation Date + Maturity
Days = Default Lot Maturity Date. Hold day is the number of days added to the
lot creation date before the lot can be released.
b. Lot divisible: This feature enables you to allocate, reserve, or move partial lot
quantities. If this is not selected, then one must transact the full lot quantity for
the item. This field cannot be modified if transactions already exist.
c. Child lot enabled: If child lot control is enabled, one must specify a parent lot
and a child lot for transactional purposes.
2. “Purchasing” tab:
a. Outsourced assembly: This is an indication on whether this is an outsourced
assembly item and has subcontracting components. This attribute can be selected
only if charge base chargeable subcontracting is enabled.
3. “MPS/MRP” tab:
a. Repair: The repair program set to indicate the relationship with the vendor for
the repair of an item. The repair yield indicates the yield when you upgrade or
repair a defective part. The repair lead-time is the time to repair the part at the
supplier site.
4. “Order Management” tab:

a. Change periodicity: It indicates the time the system uses to price a persistent or
recurring service or product. The system derives the list of values for this attribute
from the profile option OM: UOM Class for Charge Periodicity. Each UOM in this
class is a periodicity value. An item has only one periodicity value, and the
default value is null.
5. “Process manufacturing” tab - a totally new tab:
a. Process quality enabled: it indicates that the process manufacturing quality

module with this item is used.
b. Process costing enabled: it indicates that the process costing module is used. The
system stores costs for each organization.
c. Recipes enabled: it indicates that use of the item with recipes or formulas in
process manufacturing.
2. Item Entry
Items, in essence, are comprised of three basic components, the item's name/description, its
organisation, and the item's collection of attributes. Items can be created at an item master
organisation level or at an individual organisation level. Oracle shares the item master with
the Inventory, Purchasing, Order Management and Receivables modules. Therefore, for
consistency, items should be created at the master organisation level and assigned to child
organisations on a per item basis.
Attributes are a collection of configurations and settings that drive the item's functionality,
controls and accounting. Because there are over 600 available attributes, the process of
adding new items can be quite complicated and time consuming, Item templates, which
have predefined attributes for the type of item being created, can be used to speed data
entry (refer to the "Item Templates" portion of this section for more information)
There are two ways the client can define items from the Master Items window. They can use
the Attribute Groups tab, or the Item Folder tab. The Attributes Group tab allows them to
select individual attributes, and use the tool menu to apply templates and assign
organisations The Item Folder tab enables the client to create an item, apply a default
template, and assign the item to an organisation all in one window. Most of the item
information is optional. The client defines only the information they need to maintain the
item. A listing of key attributes is listed in the following sections.
2.1. Inventory Master Items - Main

Main Attributes Setting Comments
Unit of Measure - Indicates the stocking and selling unit of Any necessary conversions
Primary measure. are based on this unit of
measure.
This attribute is not updatable once the The primary unit of measure
new item is saved. is the default for invoices and
credit memos entered in
Oracle Receivables.
If an item belongs to both a
master organisation and a
Main Attributes Setting Comments

child organisation, and these
organisations belong to the
same costing organisation, the
primary unit of measure for
the item must be the same
within both organisations.
Unit of Measure - Indicates acceptable deviations as decimal For example, if the allowable
Deviation Factor values. This produces a plus or minus transaction quantity deviation
+ tolerance of acceptability. for the item is 10 percent
higher than the established
conversion, the client would
enter 0.10 in this field.
Unit of Measure - Indicates acceptable deviations as decimal For example, if the allowable
Deviation Factor - values. This produces a plus or minus transaction quantity deviation
tolerance of acceptability. for the item is 10 percent
lower than the established
conversion, the client would
enter 0.10 in this field.
Unit of Measure -  Both: Use both item-specific and If the client defined an item-
Conversions standard unit of measure conversions. specific and a standard
 Item specific: Use only unit of measure conversion for the same unit
conversions unique to this item. of measure, the item-specific
 Standard: Use only standard unit of conversion is used.
measure conversions.
Item Status Defines the status of the item, and defaults
the status attributes as defined in the Item
Status window.
2.2. Inventory Master Items - Inventory

Attributes
Inventory Item Indicates whether to stock and transact If enabled, the item is
items in Oracle Inventory. automatically assigned to the
default category set for the
This setting should be enabled in order to Inventory functional area.
activate the following item attributes:
 Stockable
 BOM Allowed
 Transactable
 Build in WIP
Stockable Indicates if an item is able to be stocked For 'service' or non-tangible


Attributes
within an Inventory organisation. items, this setting would be
expected to be disabled.
This attribute is only available when the
Inventory Item configuration is enabled.
Transactable Indicates whether Inventory transactions Oracle Order Management

can be placed for this item. uses this along with Stockable
and Returnable to determine
This attribute can be set only when the which authorised returned
Stockable configuration is enabled. items can be physically
received into inventory.
Reservable Indicates whether this item can be
reserved when entering orders in Order
Management.
Lot and Serial Values determine the Lot shelf life, lot
numbering, locator controls, and serial
number generations.
Cycle Count Indicates whether to include this item in
Enabled automatically scheduled cycle counts.
2.3. Inventory Master Items - Bills of Material

Bills of Material Setting Comments
Attributes
BOM Allowed Defines a bill of material for an item, or This setting should be enabled
assigns the item as a component on a bill. only for items that are
components of a bill of
material.
BOM Item Type Select a type to control bill functionality. This attribute is controlled at
The client must enter a value here if BOM the Master level only.
Allowed is enabled:
 Model: The item's bill of material lists
option classes and options available
when the client places and order for the
model item.
 Option Class: This item's bill of material
contains a list of related options. Option
classes group like options together.
Oracle Order Management does not
allow ordering of classes outside a
model.
 Planning: This item's bill of material
contains a list of items and planning
Bills of Material Setting Comments

Attributes
percentages. A planning item can
represent a product family or demand
channel. Its bill of material facilitates
master scheduling and/or material
planning. The total component planning
percentages on a planning bill can
exceed 100%. Oracle Order
Management does not allow ordering of
Planning bills.
 Product Family: This item can be used as
a product family for planning at an
aggregate level.
 Standard: Any item that can have a bill
or be a component on a bill, except
planning, model, or option class items.
Standard items include purchased
items, subassemblies, or finished
products.
2.4. Inventory Master Items - Costing

Attributes
Costing Enabled Indicates whether to report, value, and Organisations using average
account for any item costs. costing always maintain their
own item costs, regardless of
For example, disabling costing for the control level set for the
reference items or for invoice only (non- Costing Enabled.
stock) items that are never shipped and
never held in inventory. When enabled, the item is
automatically assigned to the
default category set for the
Oracle Cost Management
functional area.
Inventory Asset Indicates whether to value an item as an
Value asset in Inventory. Disabling this indicates
an expense item.
Cost of Goods Indicates the general ledger account used This attribute is controlled at
Sold Account as a source for the Cost of Goods Sold the Organisation level only.
(COGS) Account in order to record and
account for costs related to goods sold. The default cost of goods sold
account is set when the client
defines organisation

Attributes
parameters.
2.5. Inventory Master Items - Purchasing

Purchasing Setting Comments
Attributes
Purchased Indicates whether this item can be If enabled, the item is
purchased via suppliers/vendors and automatically assigned to the
received into Inventory. default category set for the
Purchasing functional area.
Enabling this option allows the
Purchasable attribute to be enabled.
Purchasable Indicates whether an item can be placed

on a purchase order.
This value can only be enabled if the

Purchased attribute is enabled. Disabling
this attribute temporarily restricts the
ability to buy this item.
RFQ Required Indicate whether to require an item If defined, this value

quotation when requesting an item. overrides the value defined in
Oracle Purchasing defaults this value on the Organization's Purchasing
requisition lines for this item. Options window.
Receipt Close Indicates a percentage tolerance that Oracle Purchasing

Tolerance Oracle Purchasing uses to automatically automatically closes a
close purchase order shipments. shipment when the
unreceived quantity is within
the quantity tolerance
percentage of the shipment.
For example, if the original
shipment quantity is 50, and
10 has been entered here
(10%), Oracle Purchasing
automatically closes the
shipment for receiving when
45 or more are received.
Refer to the Control

Limitations section on where

Attributes
this item-level value overrides
other system defaults.
Price Tolerance Indicates the maximum price percentage For example, if the tolerance
over the normal price range for an item. percent is 5, the maximum
acceptable price on a purchase
order is 5% over the
requisition price. Any
purchase order price 5%
above the requisition price is
unacceptable, and the PO
cannot be approved.

Invoice Tolerance Indicates the percentage tolerance Oracle Oracle Purchasing
Purchasing uses to automatically close automatically closes a
purchase order shipments. shipment when the un-
invoiced quantity is within the
quantity tolerance percentage
of the shipment. For example,
if the original shipment
quantity is 50, and entered 10
here (10%), Oracle Purchasing
automatically closes the
shipment for invoicing when
the invoice match is 45 or
more.

Expense Account Indicates the default inventory account for Oracle Purchasing debits this
expense items. account when receiving items
into inventory only if the item
is expensed. If received into
an expense subinventory,
Oracle Purchasing uses the
expense account assigned to
the subinventory.

Attributes
This attribute is used only

when Inventory Asset Value
is turned off.
Invoice Matching Indicates whether an item must be This setting should be "Yes"
- Receipt received before the invoice can be paid. for "Receipt Required" for 3-
Required (3-way way matched items and
match) "blank" for 2-way matched
(typically service or non-
tangible items) in order to
prevent the payment of un-
received items.

Invoice Matching Indicates whether to inspect an item upon Inspection required is
- Inspection receipt from the supplier, before paying optional and only necessary
Required (4-way the corresponding invoice. for manufacturing type
match) organisations where quality of
If this field is blank, inventory will use the received goods requires a
value defined in the Purchasing Options separate inspection / quality
window for transactions involving this assurance process.
item.
2.6. Inventory Master Items - Receiving

Receiving Setting Comments
Attributes
Receipt Date Indicates the number of days before the This setting should be set in
Controls - Days promise date that the System is allowed to order to prevent the receiving
Early receive an item without warning or of goods too early.
rejection.
Receipt Date Indicates the number of days after the This setting should be set in

Attributes
Controls - Days promise date that the System is allowed to order to prevent the receiving
Late receive an item without warning or of goods too late.
rejection.
Receipt Date  None: No tolerance is enforced. Refer to the Control
Controls - Action  Reject: Rejects receipts when the receive Limitations section on where
date is outside the range defined by this item-level value overrides
Days Early Receipt Allowed or Days other system defaults.
Late Receipt Allowed.
 Warning: A warning message displays if
the client attempts to receive an item
outside the range defined by Days Early
Receipt Allowed or Days Late Receipt
Allowed.
Overreceipt Indicates the maximum acceptable over- For example, if the tolerance
Quantity Control receipt percentage, used by the Over- percent is 5, then the
- Tolerance Receipt Quantity Control Action attribute. acceptable quantity on a
receipt transaction is within
5% of the quantity ordered on
a purchase order line.
Any quantity more than 5%

over the order quantity is
unacceptable.

Overreceipt  None: No tolerance is enforced. Refer to the Control
Quantity Control  Reject: Rejects receipts over the tolerance Limitations section on where
- Action quantity. The client receives an error this item-level value overrides
message and is prevented from other system defaults.
receiving quantities exceeding the order
quantity by more than the Quantity
Received Tolerance percent.
 Warning: A warning message displays if
the client enters receipts over the
quantity determined by the Overreceipt

Attributes
Quantity Control Tolerance percent.
Valid If enabled, items other than those ordered Refer to the Control
Transactions - can be received. Item substitutes must be Limitations section on where
Allow Substitute defined with the Item Relationships this item-level value overrides
Receipts window. other system defaults.
Refer to the Oracle Inventory

User Guide for further details
on item relationships.
Valid If this option is disabled, all receipts for an Refer to the Control
Transactions - item must have a corresponding purchase Limitations section on where
Allow Unordered order. this item-level value overrides
Receipts other system defaults.
2.7. Inventory Master Items - General Planning

General Planning Setting Comments
Attributes
Consigned If selected, the item is consigned, meaning
residing at the client's location, but owned
by the supplier. Use the consumption
setup window to designate which
transaction to use when consuming either
consigned or VMI (Vendor Managed
Inventory).
2.8. Inventory Master Items - Order Management

Order Setting Comments
Management
Attributes
Customer Indicates whether to allow an item to be This attribute must be turned
Ordered ordered by external customers. In off if the BOM Item Type
addition, any item with this value enabled attribute is set to Planning.
can be added to a price list within Oracle
Order Management. Additionally, items that are
purchase order items would
typically not also be saleable
to a customer if it is a
component of a manufactured
item.

Management
Attributes
This is an item defining
attribute. If turned on, the
item is automatically assigned
to the default category set for
the Oracle Order
Management functional area.
Customer Orders Indicates whether an item is currently This should be disabled for
Enabled customer orderable. If enabled, this item discontinued items no longer
can be selected for a Sales Order within available for sale, or for items
Oracle Order Management. that are not ready to be sold.
If the Customer Ordered

configuration is enabled, but
the Customer Orders Enabled
value is disabled, prices can
be defined for the item, but no
orders can be placed for it.
Internal Ordered Indicates whether to allow an item to be This is an item defining

ordered internal requisition. attribute. If turned on, the
item is automatically assigned
to the default category set for
the Oracle Purchasing
functional area.
Internal Order Indicates whether an item is currently If the Internal Ordered
Enabled available for internal requisitions. If configuration is enabled, but
enabled, this item can be selected for an the Internal Order Enabled
internal requisition within Oracle configuration is disabled, this
Purchasing. value is temporarily exclude
from being used on
requisitions.
OE Transactable Indicate whether demand can be placed Most items with the Shippable
for an item by Oracle Order Management, attributed enabled also have
and whether shipment transactions are OE Transactable enabled on.
interfaced to Oracle Inventory. For non-shipped items, OE
Transactable can be enabled if
the item is used in forecasting
or planning.
This attribute cannot be


Management
Attributes
disabled if demand exits.
Shippable Indicates whether an item is shippable. This setting should be enabled

Shippable items are released by Oracle for physical items (and not for
Shipping Execution’s Pick Release services).
program, creating confirmable shipping
lines, and are printed on the pick slip This attribute must be
disabled if the BOM Item
Type attribute is set to
Planning.
Returnable Indicates whether customers can return an Generally only "Customer
item. Order Management uses this Ordered" enabled items
attribute along with Stockable and would be expected to be
Transactable to determine which returned "Returnable".
items can be physically received into
inventory.
Tolerances - Over Indicates the amount of that the shipment Refer to the Control
Shipment can exceed at the time of ship Limitations section on where
confirmation. this item-level value overrides
Tolerances - Indicates the amount of the shipment that Setting this to 0% does not
Under Shipment can be shipped below at the time of ship prevent a client from partially
confirmation. fulfilling an order line, but
determines whether the order
line is closed once the
shipment occurs or not.

Tolerances - Over Indicates the amount of the shipment that Refer to the Control
Return can exceed at the time of receiving or Limitations section on where
receipt creation. this item-level value overrides
Tolerances - Indicates the lower limit of the received Setting a value other than 0%
Under Return quantity to be considered as full receipt. will allow a user to return less

Management
Attributes
than the quantity specified on
the return, and gain credit for
the full value of the return,
and not just the returned
items.

2.9. Inventory Master Items - Invoicing

Invoicing Setting Comments
Attributes
Invoice Enabled Indicates whether to activate an item for
invoicing in Oracle Receivables.
If enabled, the item can be used to create a

manual invoice line in Oracle Receivables.
In addition, via the AutoInvoicing process,
a systematically generated receivables
invoice line can be created using that
item's Order Management sales order line.
Invoiceable Item Indicates whether to include an item on an This should be enabled for all
Oracle Receivables invoice. "Customer Ordered" items
and items that are sold.
This value can only be enabled if the However, purchasing items
Invoice Enabled attribute is enabled. used in BOMs as components,
Disabling this attribute temporarily and that are not sold
restricts the ability to invoice this item. externally, might have this
disabled.
Accounting Rule Indicates the default accounting rule to Accounting Rules defined
identify revenue recognition rules for an should normally be
item. "Immediate" for most physical
goods.
If blank, the accounting rule

defined to the transaction type
Invoicing Setting Comments

Attributes
defaults into the item's Sales
Order line.
Sales Account Indicates the general ledger account This attribute is controlled at
(usually a sales or revenue account) which the Organisation level only.
Oracle Receivables uses to record revenue
when billing customers.
2.10. Item Templates

Templates are defined sets of item attributes that can be re-used to create many similar
items. Templates make initial item definition easier for data entry. Oracle recommends
using its pre-defined (or system-defined) templates or the client can create their own user-
defined (client-defined) templates for item entry.
Item template attributes are not validated; therefore it is possible to define a template with
contradictory attributes. Only when using a template to define an item does Oracle
Inventory verify that the attributes are valid for a given item. To enter an item using the
item template, the client navigates to the item window and then selects Tools>Copy From.
Once a template is selected, the template's defined attributes are automatically entered for
the item. However, if a template has contradictory attributes, the following will occur:
If an attribute is not updatable for an item, the value from the template is not applied.
If a combination of attributes is invalid a warning appears when trying to save the item.
If a disabled attribute is defined within the item template, the attribute value found within the
Item Template will not be applied to the item.
2.11. Item Entry via Open Interface

Items can be imported, along with their category assignments, from any external source into
Oracle Inventory and Oracle Engineering. With Oracle Open Interface, clients can convert
inventory items from another inventory system, migrate assembly and component items
from a legacy manufacturing system, convert purchased items from a custom purchasing
system, and import new items from a Product Data Management package. When clients
import items through the Item Interface, they create new items in the Item Master
organization or assign existing items to additional organizations. Clients can specify values
for all the item attributes, or specify just a few attributes and let the remainder default or
remain null. The Item Interface also lets clients import revision details, including past and
future revisions and effectivity dates. Validation of imported items is done using the same
rules as the item definition forms, so clients are insured of valid items.

o Each organisation should utilise one and the same item master, and items can be
assigned to individual organisations as required. Relationships between items on
different item masters cannot be created, therefore any updates to an item would
have to be performed in multiple item masters.
o Individual item attributes are highly variable depending upon many factors
including:
 The client's industry
 The client's business
 Client's range of products
 Whether or not it manufactures goods
 Is a service organisation
 Purchases from outside vendors
o Control over consigned items should be in place to avoid Inventory accounting
balance misstatement, in case of inventory Items been valued in the General
Ledger.
o The INV: Supplier Consigned Enabled profile option is used to find if the
consigned inventory feature is present. This profile is updateable only at site
level. This should only be enabled where consignment goods and consignment
subinventories are being used.

o A listing of item "types" and their typical attribute dependencies are below:
Example item Typical settings
Service item "Inventory" and "Stockable" attributes should be disabled.
Since no 'inventory' of service items can be kept, "Invoice

Matching" should be set to 'BLANK' (as 2 way matching is
relevant for services)
Sales item "Invoiceable Item" and "Invoice Enabled" should be enabled as
this item should be revenue accounted for.
Purchase order item "Expense Account" field should be defined to an expense
account combination if this item is not to be accounted for as an
asset ("Inventory Asset Value" in the costing attribute region
should then be disabled)
Example item Typical settings

Manufacturing item These items may or may not be available for sale, as
components are often only used in manufacturing and are not
sold individually.
"Costing Enabled" should be enabled, as generally

manufactured items will have an associated cost.
"Inventory Asset Value" should be enabled as manufactured

goods are normally inventory asset items and are not
immediately expensed.
"Cost of Goods Sold Account" should be defined to a Cost of

Goods Sold expense account distribution.

o If an item is assigned a status whose status attributes are defaults, these attributes
can be overridden for each individual items.
o If defined at the item level, the "RFQ required" value overrides the "RFQ required
value" defined in the Organization's Purchasing Options window
o If the Receipt Date and Overreceipt actions are set to "Warning", this allows the
end user to enter receipts in violation with the defined tolerances…since the
warning can be overridden.
o Although these Purchasing Options are defined only once, they default in the
following descending order: Purchasing Options, Purchase Order Line and Item
Master. The setting at the Item Master overrides the settings at all other levels.
The following table lists the important purchasing options that can be overridden
at various levels.
Can be overridden at:
Purchase Item Master
Supplier
Purchasing Order Line Level
Level Supplier
Option Shipment (Purchasing
(Receiving Site Level
Level (applied Tab)
Tab)
to transaction)
Receipt Close % NA NA  
Invoice Close % NA NA  
Price Tolerance % NA NA NA 
Match Approval
Level: 3-Way
 NA  
Match (Receipt
Required)
Match Approval
Level: 4-Way  NA  
Match (Inspection
Required)
o Although these Subinventory Setups are defined only once, they default in the
following descending order: Purchase Order Line and Item Master. The setting at
the Item Master overrides the settings at all other levels. The following table lists
the important purchasing options that can be overridden at various levels.
Purchase Item Master
Subinventory Order Line Level
Supplier Supplier
Setup Shipment (Purchasing
Level Site Level
Level (applied Tab)
to transaction)
Expense Account
(PO Charge NA NA  
Account)
o Although these Receiving Options are defined only once, they default in the
following descending order: Receiving Options, Supplier, Purchase Order Line
and Item Master. The setting at the Item Master overrides the settings at all other
levels. The following table lists the important receiving options that can be
overridden at various levels.
Supplier Purchase Order
Item Master
Receiving Option Level Supplier Line Shipment
Level
(Receiving Site Level Level (Receiving
(Receiving Tab)
Tab) Controls Button)
Allow Unordered
 NA NA 
Receipts
Quantity Received
 NA  
Tolerance
Quantity Received
 NA  
Exception Action
Receipt Date – Days
 NA  
Early
Receipt Date – Days
 NA  
Late
Receipt Date
 NA  
Exception Action
Allow Substitute
 NA  
Receipts
o Although these Order Management options are defined only once, they default in
the following descending order: Order Management Profile Options, Customer,
Sales Order and Item Master. The setting at the Item Master overrides the settings
at all other levels. The following table lists the important Order Management
profile options that can be overridden at various levels.
Customer
Order Item Master
Level
Management Customer Level (Order
(Order Sales Order Level
Profile Option Site Level Management
Management
Tab)
Tab)
Over Shipment
 NA  
Tolerance
Under Shipment
 NA  
Tolerance
Over Return
 NA NA 
Tolerance
Under Return
 NA NA 
Tolerance
o Although this Order Management Transaction Type option is defined only once,
it defaults in the following descending order: Order Transaction Type, Sales
Order, and Item Master. The setting at the Item Master overrides the settings at all
other levels. The following table lists the important Order Management
Transaction Type setting that can be overridden at various levels.
OM Transaction Item Master
Customer Customer
Type (Finance Tab) Sales Order Level Level (Invoicing
Level Site Level
Tab)
Accounting Rule NA NA  
o There is no possibility for overriding Consignment inventory items. They should
not be valuated in the General Ledger, due to the fact that items are only residing
at the Company, but owned by the supplier or a third party.

o Clients should have a process established that proactively controls change to the
item master and item attributes. Generally these change control processes will
stand apart from and be independent of the IT General Computer Controls
system change control processes. Change control processes over item master
could include:
 Periodic review of old / obsolete items (either an inactive date is applied to an
item, or the item status is changed)
 Processes to control new versions of existing products (new item created vs.
new version created)
 Processes to add new items.
o Through the use of item templates, item statuses, and defaults, items will take on
attributes defined at those levels. However these are individually overrideable on
a per item basis. Consequently, the level of risk will determine whether and to
what extent the items in the item master need to be audited. Examples of financial
statement risks include:
 If the Expense Account combination is an asset account, then the item will still
be reflected as an asset in the financial statements instead of being expensed
immediately. Reviewing this value at the item and at the subinventory level
will identify where this financial risk exists.
 Enabling the shippable configuration for services or non-tangible items runs
the risk that the service / non-tangible item, not being listed as an inventory
item, will not be able to ship and consequently the sales order will not be
processed (will be stuck in the pick release / ship confirm stage) and
consequently not invoice or revenue account.
 A risk exists that revenue items are not "Invoiceable Item" enabled and
consequently may allow pick release and shipping of the goods, but will be
rejected in the AutoInvoice process and consequently not be revenue
accounted.
 If an item is not "Cost Enabled" but is a "Stockable" and "Inventory Asset
Value" is enabled, the item may not be correctly valued in the subinventory.
o For further details on stratifying the item master population and selecting a
sample, or performing CAATs on the item master, refer to the local region's PwC
Audit Guide.
3. Item Costs
Item costing is driven by each Organization's defined Costing Method. Frozen costing
processes are used in an Organization using the Standard costing method, while Average
costing processes are used in an Organization using the Average costing method. When an
item is defined, the system creates a cost record. Each cost record is then maintained
differently, depending upon the Organizations' defined cost method. These cost processes
are outlined below.
3.1 Average Cost Items

3.1.1. Defining Average Cost Items
The Item Costs window cannot be used to enter average costs. Under the average
cost system, the unit cost of an item is automatically calculated using the average
value of all receipts of that item into inventory. Each receipt of material to inventory
updates the unit cost of the item received. Issues from inventory use the current
average cost as the unit cost. By using Oracle Cost Management’s average costing
method, clients can perpetually value inventory at an average cost, weighted by
quantity (inventory cost = average unit cost * quantity). For purchased items, this is a
weighted average of the actual procurement cost of an item. For manufactured items,
this is a weighted average of the cost of all resources and materials consumed. Under
average costing, organizations cannot share costs; average costs are maintained
separately in each inventory organisation.
3.1.2. Updating Average Cost Items

An item's average cost can be directly updated in four different ways:
o New average cost: By entering a new total cost, the value of the on-hand inventory
in all subinventories will be revalued. ). In the example below, the cost of this item
is being changed from $16.89 to $1.00, and the resultant inventory value is
decreasing from $1,689. to $100.
o % Change: By entering a % change value, the on-hand inventory in all

subinventories in will be revalued, with the percentage change automatically
applied.
o Inventory Value Change: By entering a Value Change, the system will revalue on-
hand inventory by that amount and recalculate the item's average cost for the cost
group. If there is no inventory quantity on-hand, the cost cannot be updated by
this method.
o Cost Element Change: Each item's sub-element costs can be adjusted.
When the client updates an item's average costs, the item's cost in all asset
subinventories are updated (revalued). The inventory adjustment value resulting is
posted to the average cost adjustment account that is specified in the Update Average
Cost form. Items in Work in Progress are not revalued by an average cost update, nor
are expense items or any item in an expense subinventory.
3.2. Frozen Cost Items

3.2.1. Defining Frozen Cost Items
When an item is entered, the automatically created item cost record is viewable in the
Item Costs Detail window. In order to assign costs to an item, the "Inventory Asset"
configuration must be enabled, as noted below.
Using the cost button, clients can enter costs for the item. For each item, the item's
element, sub-element, basis and rate must be entered. In addition, the item's activity
and the activity's occurrence (the number of times the activity is expected to occur
during the cost period) can be defined. The basis is multiplied by the rate or amount
to calculate the unit cost of the subelement.
3.2.2. Updating Frozen Cost Items

The standard cost update procedure enables the client to define and roll up pending
costs, simulate changes to standard costs for analysis, and then update the item's
pending costs to Frozen status. Only once the item costs are frozen can the updated
cost be used in transactions.
3.2.2.1. Frozen Cost Setups

Prior to using the frozen cost method, cost types for pending standard costs and
pending costs must be defined for each of the cost elements: material (inventory
items, both components and assemblies), material overhead, resources, overhead,
and outside processing. An example is below:
For more information regarding Cost Types, refer to the Cost Type section of this
document.
3.2.2.2. Pending Cost Rollup

The Pending Cost Rollup Concurrent Process adds up pending costs for all cost
elements of an assembly and creates a new pending cost for the assembly. Bills
and routings (found in Bills of Material and Work in Process modules) define the
foundation for cost rollups, elemental distribution, and all related manufacturing
costing functions. Pending costs must be rolled up before they can be frozen. For
more information on Bills of Materials and Work in Process transaction processes,
refer to the modules' user guide found at www.oracle.com.
3.2.2.3. Pending Cost Stimulation

The Report Pending Adjustments concurrent process launches two processes. One
simulates a cost update from the cost type specified to the Frozen cost type, and
one to launch the Inventory, Intransit, and WIP Standard Cost Adjustment
reports. These reports allow clients to preview changes the standard cost update
would perform for current inventory balances.
3.2.2.4. Updating Pending Costs to Frozen Standard Costs

The Update Standard Cost request is run to update pending costs to frozen
standard costs. Updating pending costs to Frozen standard costs does the
following:
 Updates the existing standard costs with the costs created in the new cost type
and creates the resulting adjustment accounting entries.
 Creates item cost history.
 Prints the Inventory, Intransit, and WIP Standard Cost Adjustment reports
that detail the valuation changes in the client's inventory due to the change in
the standard costs.
 If the client shares costs across inventory organizations, the standard cost
update automatically revalues the on-hand balances in all organizations that
share costs.
The client can only update standard costs from the master costing organization,
which must use standard costing. The following concurrent request parameters
affect the freezing of item costs:
 A Cost Type. Cost information (a set of costs for items, activities, resources,
outside processing, and overhead) is copied from this cost type into the Frozen
cost type.
 Adjustment Account: This account is used to collect the changes in value to each
item, and to automatically generate transactions that adjust the client's
inventory accounts.
 Item Range and Update Option. The update option is based upon the item range
selected. These are outlined below:
Item Update Options available: Additional Procedures/Comments:

Range
selected:
All Items  Overhead, resource, activity, The Resource, overhead, and item
and item costs costs option is only available if the
 Resource, overhead, and item client uses Inventory with Bills of
costs Material. If they use Work in
Process, choose this option to reflect
resource and overhead cost changes
for actual charges to standard and
non-standard asset jobs.
Specific  Overhead, resource, activity, If Specific item selected, then a
item and item costs Specific Item to be updated must
 Resource, overhead, and item also be selected.
costs
 Activity, and item costs
 Item costs only
Category  Overhead, resource, activity, In addition, select a Category Set.
Item Update Options available: Additional Procedures/Comments:

Range
selected:
and item costs The default is the category set
 Resource, overhead, and item defined for the costing functional
costs area and select a specific category.
 Item costs only
Range of  Overhead, resource, activity, In addition, select beginning and
items and item costs ending Item From and To values.
 Resource, overhead, and item Standard costs are updated for all
costs items in this range, inclusive.
 Item costs only
Based on  Overhead, resource, activity,
rollup and item costs
items, Not  Resource, overhead, and item
based on costs
rollup  Activity, and item costs
items, and  Item costs only
Zero cost
items

Deferred COGS Recognition
o Users have the flexibility to de-couple the physical event of shipping goods from
the recognition of COGS. It can now defer the recognition of cost of goods sold
until all contract contingencies have been fulfilled and revenue has been
recognised in Oracle Receivables.
o
Financially, this it may affect the revenue recognition process.

o None

o None

o None
4. ABC Analysis
An ABC analysis determines the relative value of a group of inventory items based on a user-
specified valuation criterion. "ABC" refers to the rankings the client assigns to their items as a
result of this analysis, where "A" items are ranked higher than "B" items, and so on. The ABC
analyses are often used to drive cycle counts, where the client might count items of high value
(A items) very frequently, items of lower value less frequently, and items of lowest value very
infrequently. ABC analysis involves 6 steps, as defined below.
4.1. ABC Compiles

The client can define and compile an ABC analysis for their entire organization or for a
specific subinventory within the client's organization. They choose the compilation criterion,
the scope of their analysis, the cost type to use in determining item values, and any
additional information that may be conditionally necessary, based on their compilation
criterion. The combination of all these parameters constitutes an ABC compile header,
identified by the ABC compile name. The client uses this name to identify any activity
pertaining to this ABC analysis. ABC compiles are defined in the Define ABC Compile
window.
4.1.1. Content Scope

Determines the scope of the analysis by selecting the content level for items to
include in the compile. If the client uses the entire organization, Oracle Inventory
includes all items defined for their current organization in the ABC compile, even
those with zero cost or zero quantity. If they use a particular subinventory, Oracle
Inventory includes all items for which they have defined an item/subinventory
relationship. The client cannot compile an ABC analysis for a subinventory that is
defined as a non-quantity tracked subinventory. They can, however, use non-asset
(expense) subinventories for which they track quantities.
4.1.2. Valuation Scope

The valuation scope for determining the ranking of items must also be selected.
Ranking must be done at the Organization level if the client did not select a
subinventory in the Content Scope field. If they only want to include items in a
subinventory but they want the ranking to be done based on the organization wide
ranking, they must select Organization.
4.1.3. Compile Specification

The compile criterion or method of ranking items in the ABC compile is required.
Oracle Inventory uses the compile criterion to value the items the client includes in
their ABC compile. After determining each item's compile value, Oracle Inventory
ranks all the items in the client's ABC compile.
In addition, a cost type must be entered. The client can select a value here only if they
selected Current on-hand quantity, Current on-hand value, Forecasted usage
quantity, Forecasted usage value, MRP demand usage quantity, or MRP demand
usage value in the Criterion field. If the client is compiling by quantity criterion, the
cost type is used for reporting purposes only.
4.1.4. MRP Parameters

MRP forecast name can only be selected if the client selected Forecasted usage
quantity or Forecasted usage value in the Criterion field. MRP plan name can only be
selected if the client entered MRP demand usage quantity or MRP demand usage
value in the Criterion field.
4.1.5. Start (from) date and End (to) date

These are required fields if the client selected an option other than Current on-hand
quantity or Current on-hand value in the Criterion field.
4.1.6. Running an ABC Compile

Once entered, the defined ABC must be compiled. ABC compiles are run in the ABC
Compiles window via the Compile button. This submits a request to run the compile
program. Once complied, the ABC compile can be used to define the ABC classes and
associate items with the classes.
4.2. ABC Classes

The client uses ABC classes to identify the value groupings to which their items belong.
They define these classes using their own terminology. For example, they might define
classes High, Medium, Low, and later assign their items of highest rank to the High class,
and so forth. ABC Classes are defined in the ABC Classes window. Once defined, the
classes are used in the definition of Assignment Groups, as outlined in the next section.
The client can use ABC classes to group items for a cycle count where they count "A" items
more frequently than "B" items. When they use ABC classes in this way, they perform an
ABC analysis and assign items to classes based on the results of that analysis. They can also
use ABC classes to group items for planning purposes.
4.3. ABC Assignment Groups

ABC assignment groups link a particular ABC compile with a valid set of ABC classes. This
allows them to assign items to different ABC classes in different groups. For example,
suppose the client defines ABC groups "Cycle Counting" and "Planning". They can assign
different ABC classes to these two groups. They can then assign an item to a different ABC
class in each group. This allows the client to prioritize items differently for cycle counting
and planning.
4.3.1. ABC Assignment Groups-Header

ABC assignment groups are defined in the ABC Assignment Groups window. A
unique ABC group name must be entered. To assign items to this ABC group using
an ABC compile, enter the name of a valid ABC compile for the client's organization.
If an ABC compile name is entered, Oracle Inventory displays the subinventory (if
any) and the valuation associated with that ABC compile.
4.3.2. Group Classes

Group Classes to use with an ABC group are entered in the Group Classes region.
The sequence number in which classes are ordered must be entered. The lower the
number, the higher the importance of the class. Oracle Inventory defaults to the next
available integer along with the name of the class to use with this ABC group.
4.3.3. Assign Items

The Assign Items region is used to assign items to the group if the client associated
an ABC compile to the group. The client has the ability to assign and update ABC
classes to an ABC assignment group where an ABC compile was also entered. From
the ABC Descending Value Report they can determine the cut-off points for assigning
ABC classes. The client can then use the classifications for other purposes such as
determining how often they cycle count a given item. Choosing the Assign button
launches the concurrent request to assign the items to the classes in the ABC group.
4.3.4. Update Item Assignments

After the automatic ABC assignment process is completed, if an item's ABC class
needs be adjusted, this can be accomplished. In addition, an ABC group can be
updated to include those items that were not a part of the initial ABC compile. This
allows for expansion of existing ABC compiles without having to rerun any
processes.
For example, assume a client compiled their ABC analysis based on historical usage
value, and there is a relatively new item in their inventory. Since there is very little
transaction history on record, the item was assigned to a low-rank ABC class.
However, it's known that this item will have a high usage value and should really be
classified as a high rank item. The client can use the Update ABC Assignments form
to reclassify this item to now be a high rank item.

o None

o None

o None

o None
F. Transactions Overview
Transactions in Inventory largely consist of movements between organisations and
subinventories, and counting of inventory. These are often processed on an ad-hoc basis as the
need is identified.
1. Inventory Transfers & Movements

Inventory can be transferred between Organisations/Companies or between Sub-
Inventories. In addition, inventory can be moved within a single organization. Primarily,
movements of items in inventories should be processed via the Order to Cash and Procure
to Pay processes and should not be done via direct inventory transaction processing.
However, there are instances in which movements must be recorded directly in Inventory.
Each Inventory movement process is described below.
1.1. Transferring Between Organisations

Material can be transferred from the current organisation to another organisation, or from
the current organisation to intransit inventory. The client can define multiple inventories,
warehouses, and manufacturing facilities as distinct organisations. With Oracle Inventory
they can perform direct inter-organisation movements or they can transfer expense and
asset items from one organisation to another using intransit inventory.
1.1.1. Direct Inter-Organisation Transfers

The client can use a direct inter-organisation transfer to move inventory directly from
a shipping organisation to a destination organisation. Using the Inter-Organization
Transfer window, the client can transfer one or more items in a single transaction.
The following information is usually entered with Inter-Organisation Transfers:
1.1.1.1. Transfer Header

The date of entry for the transaction is entered. along with the organization to
which to transfer the material. ). In the same window, a transaction type needs to
be entered, along with indicating if inventory information should be defaulted
from the serial number.
1.1.1.2. Items to be Transferred

Items to be transferred are selected in the Transaction Lines region. The client can
transfer the same item more than once. For example, they can specify an item
more than once to transfer partial quantities to different subinventories or stock
locators. Note: For a direct transfer, if the item is under revision control in either
organization, enter a revision that is common to the item in both organizations.
1.1.1.3. Subinventory
A subinventory from which to transfer the material must be entered. Optionally,
enter the subinventory to which to transfer the material. However, the client must
enter a value in this field for direct inter-organization transfers. If the client has
established locator control for the item, they must enter from and to locators.
1.1.1.4. Unit of Measure and Quantity

A unit of measure is required. This can be the primary unit of measure (the
default) or any valid alternate unit of measure. If the client enters an alternate unit
of measure, Oracle Inventory issues the quantity you specify in this unit of
measure. Oracle Inventory also converts the quantity to the primary unit of
measure so that it can correctly update the on-hand quantity. In addition, enter
the quantity of the item to transfer.
1.1.1.5. Internal Transfer Charges

To enter internal transfer charges to assign to the To organization, enter a value in
the Added Value field that represents the transfer charge. The client can enter a
value here only if they entered Requested value in the Inter-Organization Transfer
Charge field in the Organization Parameters window. In addition, enter the
percent of the transaction value that represents the transfer charge. The client can
enter a value here only if they have entered Requested percent in the Inter-
Organization Transfer Charge field in the Organization Parameters window.
1.1.1.6. Freight Information

To enter freight information costs to assign to the From (current) organization,
enter the transportation cost to physically transfer the material; that is, the freight
carrier charges. In addition, enter the general ledger account to which to charge
the value the client entered in the Transportation Cost field. Oracle Inventory
displays the account they defined for the freight carrier as the default.
1.1.1.7. Unit Numbers

If Oracle Project Manufacturing is installed and if the client has enabled its end
item model/unit effectivity feature, they can enter a unit number for the item.
See: Model/Unit Effectivity, Oracle Project Manufacturing Implementation
Manual. Note: The Unit Number field is visible only if the client has installed
Project Manufacturing.
1.1.1.8. Lot/Serial Numbers

A lot number for the item must be entered. The client may enter multiple lot
numbers, in the Lot/Serial button to display the Lot Entry window.
For receipt transactions, if the client enters a lot number, they must enter the date
the lot expires. They can enter a value here only if the Lot Expiration (Shelf Life)
Control attribute is set to User-defined Expiration Date.
1.1.1.9. Quantity
The following fields are reviewed to view quantity available and quantity on
hand values:
 Available: Displays the quantity available to transfer, based on the unit of
measure the client specified. The available quantity is the quantity on hand
less all reservations for the item. The available quantity is specific to the
revision level, lot number, From subinventory, and From locator the client
specifies for the transfer.
 On hand: Displays the current on-hand quantity for the item, based on the unit
of measure the client specified. The on-hand quantity is specific to the
revision, lot number, From subinventory, and From locator they specify for the
transfer. On-hand includes quantities for pending transactions in the MTL-
MATERIAL-TRANSACTIONS table.
1.1.1.10. Movement Statistics

Use either of the following methods to record and maintain information
associated with the movement of goods:
1. Navigate to the Movement Statistics window and record information
manually.
2. Automate the collection of this information by setting up parameters in
the Movement Statistics Parameters and Economic Zones windows.
. 1.1.11. Material Aging Workflow

This workflow can be leveraged to create work orders, send notifications to
planners, update material status or request a movement of expired product to a
quarantine or inspection area.
The validity of a transfer transaction depends on the controls the client has defined in
both the shipping and destination organisations for the items they want to transfer.
For example, they can transfer item A from organisation X to organisation Y, even
though item A is under lot control only in organisation X (the client can specify the
lot numbers for item A in organisation X during the transfer transaction). However,
they cannot transfer item B from organisation X to organisation Y if item B is under
lot control only in organisation Y (they cannot specify lot numbers for item B in the
destination organisation because you are performing a direct transfer). The following
charts outline how organization controls affect the ability for one organization to
transfer items to another organization.
REVISION CONTROL Off (Shipping On (Shipping

Organisation) Organisation)
Off (Destination OK OK
Organisation)
On (Destination OK
Organisation)
LOT CONTROL Off (Shipping On (Shipping

Organisation)
On (Destination OK
Organisation)
SERIAL NUMBER Off (Shipping On (Shipping

CONTROL Organisation) Organisation)
Organisation)
On (Destination OK
Organisation)
Destination Org Shipping Expense sub and/or Asset sub and

Org Expense item Asset item
Expense sub and/or OK
Expense item
Asset sub and Asset item OK OK
1.1.2. Inter-Organisation Transfers via Intransit Inventory

Intransit Transfers are generally used when transportation time is significant. When
clients perform the transfer transaction, the same Inter-Organization Transfer
window is used. However, a delivery location is not specified. They only need to
enter the subinventory they are shipping from, a shipment number, the freight
information, and, depending on the inter-organisation transfer charge that applies
between the organisations, a percentage of the transaction value or a discrete amount
that Oracle Inventory uses to compute transfer charges.
If the FOB (Freight on Board) point is set to Receipt in the Shipping Networks
window, the destination organisation owns the shipment when they receive it. If it is
set to Shipment, the destination organisation owns the shipment when the shipping
organisation ships it, and while it is intransit. While their shipment is intransit, they
can update shipping information such as the freight carrier or arrival date in the
Maintain Shipments window.
At the time of shipment, the client must define your receiving parameters for the
destination organisation. They can receive and deliver your shipment in a single
transaction or they can receive and store their shipment at the receiving dock.
The following charts outline how organization controls affect the ability for one
organization to transfer items to another organization via intransit Inventory.
REVISION CONTROL Off (Shipping On (Shipping

Organisation)
On (Destination Receive any revision Receive only the revision
Organisation) you ship
LOT CONTROL Off (Shipping On (Shipping

Organisation)
On (Destination OK OK
Organisation)
SERIAL NUMBER Off (Shipping On (Shipping

CONTROL Organisation) Organisation)
Organisation)
On (Destination OK OK
Organisation)
Asset Subinventory Expense Subinventory

Asset Item OK
Expense Item OK OK
1.2. Transferring Between Subinventories and Locators

Material can be transferred within the current organisation between subinventories, or
between two locators within the same subinventory. The client can transfer from asset to
expense subinventories, as well as from tracked to non-tracked subinventories.
1.2.1 Entry of Subinventory Transfers

Subinventory transfers are entered in the Subinventory Transfer window. The
following items are entered when transferring items between subinventory and
locators:
1.2.1.1. Header
The date and time of entry for the transaction is entered, along with the
transaction type for the subinventory transfer.
1.2.1.2. Items to be Transferred

Items to be transferred are selected in the Transaction Lines region. The
subinventories from and to which material is transferred are also entered here. If
an item has a restricted list of subinventories, they can only transfer material from
and to subinventories in that list. To transfer material between locators, enter the
same subinventory in the Sub and To Sub fields. Optionally, enter the locators
from and to which to transfer the item. The client must enter a value here if they
established locator control.
In addition, a unit of measure must be entered. This can be the primary unit of
measure (the default) or any valid alternate unit of measure. If the client enters an
alternate unit of measure, Oracle Inventory issues the quantity they specify in this
unit of measure. Oracle Inventory also converts the quantity to the primary unit
of measure so that it can correctly update the on-hand quantity. Based on the unit
of measure specified, the quantity of the inventory item to transfer must be
entered.
1.2.1.3. Lot or Serial Numbers

Enter lot or serial number information in the Lot/Serial region.
1.2.1.4. Quantity
The following fields are reviewed to view quantity available and quantity on
hand values:
 Available: Displays the quantity available to transfer, based on the unit of
measure the client specified. The available quantity is the quantity on hand
less all reservations for the item. This amount could include the amount they
have reserved if they enter a transaction source that has reservations against it.
The available quantity includes reservations against current transaction
source. The available quantity is specific to the revision level, lot number,
From subinventory, and From locator the client specifies for the transfer.
 On hand: Displays the current on-hand quantity for the item, based on the unit
of measure the client specified. The on-hand quantity is specific to the
revision, lot number, From subinventory, and From locator they specify for the
transfer. On-hand includes quantities for pending transactions in the MTL-
MATERIAL-TRANSACTIONS table.
1.3. Move Orders

Move orders are requests for the movement of material within a single organisation. It
allows planners and facility managers to request the movement of material within a
warehouse or facility for purposes like replenishment, material storage relocations, and
quality handling. Move orders can be either manually or automatically generated
depending on the source type used.
The following items are entered when manually entering a move order:
1.3.1. Header
A move order number can either be entered or generated by the system. A
description can be entered but it is not necessary and the Status field displays
Incomplete until the move order is approved. Information in the Header block
defaults to the tabbed regions, however, these fields can be overridden at the move
order line level.
1.3.2. Default
The following need to be either entered or selected:
o Transaction type:
 Account transfer: Transfer items from a subinventory to a destination account.
 Subinventory transfer: Transfer items from one subinventory to another
within the same inventory organization.
 Move order issue: Issues items to a designated location.
 Issue to project: Issues items to a designated project.
o Ship to Location: If the transaction type is move order issue, or issue to project,
the ship to organization can be entered.
 Source Subinventory: The source subinventory.
 Destination Subinventory: The destination subinventory for subinventory
transfers.
o Destination Account: The destination account number for account transfers.
o Date Required: The date the items are required to be transferred.
1.3.3. Item Tab

In the Item tabbed region, the following information needs to be entered or updated:
o Line: The line number.
o LPN: The LPN put away. This field will display if Oracle Warehouse
Management is installed.
o Item: The item number for which a move order will be performed.
o Quantity: The quantity to be moved.
o Rev: Revision control number (if the item is under revision control).
o UOM: The unit of measure.
o Date Required: The date the items are required to be in the destination
subinventory.
1.3.3. Project and Task Tab

If Project Manufacturing is installed the following in the Project and Task tabbed
region can be selected:
o LPN: The LPN put away. This field will display if Oracle Warehouse
Management is installed, and the client is working with a WMS enabled
organization.
o Task: The task associated with this item.
1.3.4. Source Tab

The following can be optionally entered or updated in the Source tabbed region:
o LPN: The LPN put away. This field will display Oracle Warehouse Management
is installed, and the client is working with a WMS enabled organization.
o Subinventory: The source subinventory for this item.
o Locator: The source locator.
o Lot Number: The lot number (if the item is under lot control).
o Serial From: The beginning serial number (if the item is under serial number
control).
o Serial To: The ending serial number (if the item is under serial control).
1.3.5. Destination Tab

If the transaction type is Subinventory Transfer, the following needs to be entered or
updated:
o LPN: The LPN put away. This field will display Oracle Warehouse Management
is installed, and the client is working with a WMS enabled organization.
o Subinventory: The destination subinventory.

If the transaction type is Account Transfer, the following needs to be entered or
updated:
o Account: The destination account.
o Locator: The destination locator.

o None

o None

o None

o Inventory movements, transactions and activities should be controlled and
monitored for accuracy, recorded in the proper period and all required
information should be sent to General Ledger Module. Movement activities
directly affect the inventory balance from each Company, Organisation and Sub-
inventory.
o Inventory balances should be periodically analysed by management for
reasonableness. Current period balance should be compared to different periods
to identify unexpected variations or possible errors when closing the current
accounting period.
o Management also should review the inventory activity to identify slow-moving,
obsolete, scrapped or damaged items (using the Movement statistics report and
Shortages Summary Report).
2. Inventory Counts
Within Oracle, there are 2 methods to verify inventory quantities. Physical inventory counts
and/or cycle counting can be used to verify inventory quantities and values. Accurate
system on–hand quantities are essential for managing supply and demand, maintaining
high service levels, and planning production. The general process flow for Inventory counts
is below, and each count's process is described in detail below.
2.1. Physical Inventory Count

A Physical Inventory Count is the counting of all items in an organization, inventory or
location. The process of setting up and completing a Physical Inventory Counts are
described in detail below.
2.1.1. Defining Physical Inventory

An unlimited number of Physical Inventories Counts can be defined. Multiple
physical inventories can be defined to count selected portions of inventory, or the
total inventory can be counted. To define a Physical Inventory Count, the following
must be created within the Defined Physical Inventory form.
2.1.1.1. Approval Required

For each defined Physical Inventory Count, approval of counting variances can be
always required, only required when the variance is outside of defined tolerances, or
never required.
2.1.1.2. Approval Tolerances

If approval is required for adjustments out of tolerance, approval tolerances must be
defined. Values can be either:
 Qty: Positive and Negative limits (expressed as a percentage) can be defined
for the difference between the system-tracked on-hand quantity and the actual
tag count quantity.
 Value: Positive and Negative limits can be defined for the total value of a
physical inventory adjustment.
2.1.1.3. Physical Inventory Scope

Determines whether the physical inventory count is for all subinventories or for one
or more specific subinventories.
2.1.1.4. Allow Dynamic Tags

Determines whether manually created tags can be dynamically entered. If disabled,
all tags must generated before use.
2.1.1.5. Snapshot
Before tags can be generated for a physical inventory a snapshot of all system on-
hand quantities for your items must be taken. This concurrent process saves all
current item on-hand quantities and costs. Oracle Inventory uses this information as
the basis for all physical inventory adjustments.
2.1.2. Generate Tags

Physical inventory tags are used to record the physical counts of inventory items.
Physical inventory tags represent actual hard copy tags that some companies use to
count inventory items. A tag contains the count for a group of a given item. Although
only one item can be noted on a tag, multiple tags can reference the same item, with
each tag referring to a unique physical location for an item.
2.1.3. Enter Counts

After physically counting the inventory items, the item quantity must be entered for
each tag. Once the quantities have been entered and saved, Oracle Inventory
determines whether any adjustments need to be approved.
2.1.4. Approve Adjustments

After the tag counts are entered, Oracle automatically compares the item's entered
tag count quantity to the snapshot's item quantity. Based upon the approval
configurations defined within the inventory count, any variances can be subject to
approval. Any variance that requires approval is listed in the Approve Physical
Adjustments window. From this form, each item's adjustments can be viewed,
rejected, or approved.
2.1.5. Processing Adjustments

After all tag counts are entered and all adjustments are approved, a process can be
submitted that automatically creates the physical inventory adjustments. The Process
Physical Inventory Adjustments concurrent program creates a material transaction
adjusting the item quantity and a journal entry debiting or crediting the adjustment
account specified within the inventory. Once this program is run for the physical
inventory, Oracle Inventory does not allow new tag generation does not allow any
other changes to that physical inventory.
2.2. Cycle Counts

Cycle counting is the periodic counting of individual items throughout the course of the
year to ensure the accuracy of inventory quantities and values. A cycle count can be defined
at either the organisation or sub-inventory level, and an unlimited number of cycle counts
can be defined and maintained in Oracle Inventory.
2.2.1. Defining Cycle Counts

A combination of parameters constitutes a cycle count header, identified by the cycle
count name. An unlimited number of cycle counts can be entered and maintained in
Oracle Inventory. For example, separate cycle counts can be defined representing
different sets of subinventories or high theft risk items in a warehouse. A number of
variables can be defined for each cycle count, as outlined below.
2.2.1.1. Potential Scope and Controls

Configuration Setting
Name
Count Controls  Inactive On: Determines the date in which the cycle count is no longer
active.
 Late Days: Number of workdays that can pass after the date the count
request was generated, before a scheduled count becomes a late count.
 Starting Sequence: The sequence number is used as the starting number in
the next count request generator. The count sequence number uniquely
identifies a particular count and is used in ordering the cycle count
listing.
 Unscheduled Entries: If enabled, items not scheduled to be counted can be
added to the cycle count.
 Display System Quantity: If enabled, the system on-hand quantities are
displayed during count entry.
Automatic Determines whether Inventory automatically assigns a status of Recount to

Recount out-of-tolerance counts and includes them in the next cycle count listing. If
enabled, the Maximum field value must be defined. This value is the
maximum number of times Inventory can generate an automatic recount
request. Once this number is reached the adjustment must be approved or
rejected
Count Determines if all subinventories or only specific subinventories are
Subinventories included in the cycle count. If only selected subinventories are to be
counted, they must be defined.
2.2.1.2. Serial and Schedule

Name
Serial Control These options determine whether to exclude serialized items from the cycle count.
Option-Count  Not Allowed
 One Per Request: Creates one count request for each serial number
 Multiple Per Request: Create multiple serial details in a count request
If either One Per Request or Multiple Per Request is selected, the

remaining Serial Control fields must be completed.
Serial Control  Quantity and Serial Numbers: Serial number and quantity are required
Option-Detail and are validated when entering adjustments.
 Quantity Only: Serial number entry is optional if the count quantity
matches the system quantity, regardless of whether the serial numbers
match. If serial numbers are not entered, the count is marked as
completed, and no adjustments are performed. If serial numbers are
entered, both quantity and serial numbers are validated when
determining whether adjustments are required.
Serial Control  Adjust if Possible: If a discrepancy exists between the count quantity
Option- and system quantity or if the entered serial numbers do not correspond
Adjustment to the serial numbers already in the specified location, then the system
will attempt to make adjustments if the adjustment variance and value
are within tolerances. These adjustments consist of receipts and issues
of the appropriate serial numbers to and from the specified location
and are applicable only to instances in which new serial numbers or
shipped serial numbers are counted.
 Review All Adjustments: No automatic adjustments are attempted.
Serial Control Indicates whether an adjustment is attempted when a count includes a

Option- serial number already assigned to the same item elsewhere in the system.
Discrepancy
Auto Schedule- Indicates whether to schedule cycle counts Daily, Weekly, or By period.
Frequency
Inventory uses this information, along with the count frequency of each
cycle count class, when performing automatic cycle count scheduling. The
value entered here dictates the window of time within which counts can
be entered against a schedule bucket.
Auto Schedule- If enabled, the application will automatically generate requests to count
Count Zero items with an on-hand quantity of zero.
Quantity
Auto Schedule- Inventory displays the last date this cycle count was automatically
Last Date scheduled.
Name
Auto Schedule- Inventory displays the first workday for the next schedule interval when
Next Date this cycle count is scheduled. You can enter a later date in this field if you
want to override the automatic schedule and skip one or more intervals.
If your schedule interval is Weekly or By period, the date you enter must
be the first workday of the period for which you want to generate
schedule requests.
2.2.1.3. Adjustments and ABC

Name
Approval- For each defined cycle count, approval of counting variances can be:
Required  Always required
 If out of Tolerance
 Never
Tolerance If approval is required for adjustments out of tolerance, approval
Quantity tolerances must be defined. Values can be either:
Variance and  Qty: Positive and Negative limits (expressed as a percentage) can be
Adjustment defined for the difference between the system-tracked on-hand quantity
Value and the actual tag count quantity.
 Value: Positive and Negative limits can be defined for the total value of
an inventory adjustment.
Tolerance- Defines percentage variances of count quantity to on-hand quantity

Hit/Miss beyond which Inventory considers a count entry a miss for hit/miss
Analysis reporting.
ABC This value is the ABC group name on which to base the cycle count item
Initialization- initialization or update.
Group
ABC Choose one of the following options:
Initialization-  None: Do not change to the list of cycle count items.
Option  (Re)initialize: Use the ABC group you specified to load all items and
their ABC assignments into the list of items to include in your cycle
count. If you already had items defined for your cycle count, this action
deletes existing information and reloads the items from the ABC group.
 Update: Use the ABC group you specified to insert new cycle count
items.
ABC If the update option is chosen, this value must be enabled or disabled. If
Initialization- enabled, if an item's ABC class assignment in the ABC group specified is
Update Classes different from the cycle count class this item is assigned, Inventory
Name
updates the cycle count class for the item with the ABC assignment in the
specified ABC group.
ABC If enabled, the application will delete unused item assignments that are
Initialization- no longer referenced in the specified ABC group.
Delete Unused
Items
2.2.1.4. Item
The Cycle Count Items window is used to add items to a cycle count. This form can
be used to schedule, generate count requests for, and count only those items that are
included in this list. In addition, approval variance quantities can be defined for
individual items.
2.2.1.5. Classes
The Cycle Count Classes window is used to add classes to a cycle count. This form
can be used to schedule, generate count requests for, and count only those classes
that are included in this list. In addition, approval variance values, quantities, and
hit/miss values can be defined for individual classes.
2.2.2. Scheduling Cycle Counts

Oracle Inventory allows for 2 methods to schedule cycle counts, as outlined below.
2.2.2.1. Automatic Scheduling

Oracle Inventory uses the number of items in each cycle count class, the count
frequency of each class, and the workday calendar of the organization to determine
how many and which items to be counted during the scheduling frequency. In order
for Inventory to perform automatic scheduling the following must be defined:
 Set the Cycle Count Enabled item attribute to Yes for the items to be included
in the cycle count.
 Enable automatic scheduling when cycle counts are defined.
 Request the schedule using the Generate Automatic Schedule Requests
window.
Each time the auto scheduler runs, it schedules counts only for the schedule interval
defined for the cycle count header. For example, if the schedule interval is weeks,
Inventory schedules all items that need to be counted on all of the workdays in the
current week. If the schedule interval is days, then Inventory only schedules those
items that are due for counting on the current date.
2.2.2.2. Manual Scheduling

Manually scheduled counts can be used in addition to, or instead of those generated
with automatic scheduling. Request counts can be created for specific subinventories,
locators, and items, and set the count for any inventory date.
For example, a request can be entered to count item A wherever it can be found in
subinventory X. Or a request can be entered to count all item quantities in
subinventory Y, locator B–100. Since manually scheduled counts have no impact on
automatically scheduled counts, some items may be counted more frequently than
initially planned.
2.2.3. Generate Count Requests

After counts have been scheduled, a process must be submitted to generate count
requests. This process takes the output of the automatic scheduler and the manual
schedule entries, and generates a count request for each item number, revision, lot
number, subinventory, and locator combination for which on-hand quantities exist.
Oracle Inventory assigns a unique sequence number to each count request that can be
used for reporting, querying, and rapid count entry. Because the count requests are
derived from the state of on-hand balances at the time the Generate Cycle Count
Requests process is run, this should not be run until just prior to the actual count.
2.2.4. Enter Counts

After physically counting the cycle count items, the item quantity must be entered for
each item. These counts can be entered via the Cycle Count entry form. In addition,
counts can be also be uploaded via the Oracle Open Interface program, and updated
via the form shown below.
Once the quantities have been entered and saved, Oracle Inventory determines
whether any adjustments need to be approved.
2.2.5. Automatic Recounts

If the Automatic Recount option is enabled for the Cycle Count, Oracle Inventory
automatically submits recount requests for items that are outside the limits of the
defined approval tolerances. Inventory submits recounts as many times as necessary,
limited by the maximum automatic recounts specified for the cycle count. After the
maximum number of recounts is reached, Inventory holds the count for approval.
Any count request with the Recount status automatically appears on the next cycle
count listing. Recounts can also be manually requested during the adjustment
approval process. recounts when you are approving adjustments.
2.2.6. Approve Adjustments

After the cycle counts are entered, Oracle automatically compares the item's entered
count quantity to the count request item quantity. Based upon the approval
configurations defined within the cycle count, any variances can be subject to
approval. Any variance that requires approval is listed in the Approve Cycle Count
Adjustments window. From this form, each item's adjustments can be viewed,
rejected, submitted for recount, or approved.
2.2.7. Processing Adjustments

After all tag counts are entered and all adjustments are approved, a process can be
submitted that automatically creates the physical inventory adjustments. The Process
Physical Inventory Adjustments concurrent program creates a material transaction
adjusting the item quantity and a journal entry debiting or crediting the adjustment
account specified within the inventory. Once this program is run for the physical
inventory, Oracle Inventory does not allow new tag generation does not allow any
other changes to that physical inventory.

o Pending transactions and the Transactions Open Interface should be cleared
before taking a snapshot.
o Oracle Inventory does not stop inventory processing during a physical inventory.
Therefore procedures should be in place to ensure that no transaction activities
occur until after all counts and adjustments have been performed.

o Oracle Inventory posts no physical inventory adjustments if any adjustments are
still pending approval. All of the adjustments should be approved or rejected
before they can be processed.
o If the client does not have any tolerances defined for an item, it uses the tolerances
defined for that item's cycle count class. If there are not any defined for the class,
it uses the tolerances at the cycle count header level. If there are no tolerances
defined for the header, Inventory assumes that there is no limit to the approval
tolerance.
o The approval process for serialised items differs from that for non-serialised
items. Serial numbers that are misplaced (at a different location or for a different
item) cannot be adjusted.

o If the approval option is set to “Never”, adjustments are processed with no regard
to whether tags have been generated or whether counts were actually entered for
all tags. For any tag that has no count entered, Oracle Inventory assumes a count
of zero and performs adjustment transactions accordingly. Clients should exercise
caution when setting this option to “Never” in order to ensure approval is
required before adjustments are posted.
o Default adjustment accounts (set when defining cycle count) can be overridden
when entering cycle count entries and when approving adjustments.

o Approval options / tolerances should be set to appropriately limit the amount of
differences that can be posted without management approval. These could be
different depending on the type of goods: for example expensive electronic goods
(0% tolerance) vs. newspapers/magazines. In the first case the “Approval
Required” option should be set to “Always”. For low value or high volume
goods, management could decide to use higher tolerance levels (e.g. 5%).
o Furthermore the Physical Inventory Missing Tag Listing should be reviewed as
part of physical inventory procedures before adjustments are processed.
o Inventory at all locations should be subject to periodic physical counts to ensure
inventory balances are complete and accurate.
3. Open Interfaces
Open interfaces are a functionality provided by Oracle Inventory to import inventory
movements and cycle counts can be from external systems into Oracle Inventory.
Transactions can be viewed, edited, and corrected for the current organization, or for
multiple organizations in a given organization hierarchy, received through the transaction
open interface. Using the folder or single row windows, the client can choose how to view
the information appropriate for a particular transaction. The client can also resubmit
transactions for processing.

o None

o None

o None

o None
4. Period End Procedures

The period close process for Oracle Inventory enables summarising of costs related to
inventory and manufacturing for a given accounting period. These costs are then
transferred to the General Ledger for posting.
Oracle inventory provides the following features related to period end procedures:
Reconcile the inventory and work in process costs and values.
Transfer inventory and manufacturing costs to the General Ledger.
Transfer summary or detail accounting information to the general ledger.
Independently open and close periods for each inventory organisation.
Perform interim transfers to the General Ledger without closing the period.
Maintain the same set of periods and fiscal calendar as for the General Ledger.
4.1. Procedures
The following steps could be considered in performing period-end processing for Oracle
Inventory:
a) Complete All Transactions for the Period Being Closed
b) Check Inventory and Work in Process Transaction Interfaces
c) Check Oracle Order Management Transaction Processes
d) Review Inventory Transactions
e) Balance the Perpetual Inventory
f) Validate the Work in Process Inventory
g) Transfer Summary or Detail Transactions
h) Close the current Oracle Payables and Oracle Purchasing Periods
i) Close the Current Inventory Period
j) Open the Next Inventory Period
k) Run Standard Period-End Reports (Optional)
Client may have a checklist that contains the majority of these steps as relevant to their
business. These may include:
4.1.1. Complete All Transactions for the Period Being Closed

Ensure that all issues, receipts, and adjustments have been entered and verify that no
hard copy records exist or are awaiting data entry, e.g. packing slips in receiving.
This may include verifying with Revenue & Receivables and Purchase to Payables
that all shipments and goods receipts are complete for the period.
4.1.2. Check Inventory and Work in Process Transaction Interfaces

This configuration verifies that there are no background or concurrent programs
unprocessed (Transactions Interface, Internal Transactions, and Demand Interface)
and to fix any rejected transactions.
The interface managers which need to be run are as follows:
 Material Transaction Manager
 Material Cost Transaction
 Move Transaction Manager

 Resource Cost Transaction Manager
 Check the Reservation Managers window
 Demand Reservation Manager
Note: These may be run as part of a scheduled request.
4.1.3. Check Oracle Order Management Transaction Processes

This configuration ensures all sales order (Pick Release) issues through Oracle Order
Management have been completed and transferred successfully to Oracle Inventory.
If orders have not been released, they do not have to be completed.
4.1.4. Review Inventory Transactions

Before closing a period, review all of the transactions for the period that have a high
dollar value and/or a high transaction quantity. Verify that the correct accounts have
been charged. Correcting incorrect account charges before closing the period is easier
than writing manual journal entries to resolve them later.
Prior to closing the inventory period, the client should verify which transactions are
still pending. Transactions with the following status should be resolved:
o Resolution Required: displays the number of unprocessed material transactions,
uncosted material transactions, and pending WIP costing transactions existing in
this period. These must be resolved before the period is closed.
o Resolution Recommended: Displays the number of pending receiving
transactions, pending material transactions, and pending shop floor move
transactions existing in this period. The accounting period can be closed;
however, after it is closed these transactions cannot be processed.
4.1.5. Balance the Perpetual Inventory

Check that the perpetual inventory value up to the end of the period being closed
matches the value reported in the General Ledger. This balancing is usually effected
automatically, but one of the following three sources may create a problem:
o Other inventory journal entries: Journal entries from products other than Oracle
Inventory, that update the inventory accounts.
o Charges to improper accounts: For example, material issued from a sub-inventory
to a miscellaneous account, but one of the sub-inventory accounts was used as
that miscellaneous account.
o Transactions after period end reports: This occurs when the period-end inventory
valuation reports are submitted before all transactions for the period have been
completed. Use the Historical Inventory Balance Report to obtain period
valuation information before the extra transactions.
o The following reports can be run to help with these reviews:
 Inventory Value Report: Use the Inventory Value Report to show quantity,
valuation, and detailed item information for the sub-inventories specified.
 Period Close Value Summary Report: Use the Period Close Value Summary to see
summary balances for sub-inventories. If this report is run for a closed
accounting period, the report displays the sub-inventory values at the end of
that period. If this report is run for an open period, the report displays the sub-
inventory value at the point in time when the report is run. By running the
Inventory Value Report, or the Elemental Inventory Value Report, more sub-
inventory balance detail can be viewed.
 Material Account Distribution Detail Report: Use the Material Account
Distribution Detail Report to view the accounts charged for inventory
transactions. Review inventory transaction values transferred to the general
ledger by GL batch.
 Material Account Distribution Summary Report: Use the Material Account
Distribution Summary report to review inventory accounting activity.
 Material Account Distribution Detail Report: Can be used to identify unusual
accounts or amounts.
 Material Account Distribution Summary Report : Can be used to verify inventory
account activity against inventory valuation increases or decreases for the
accounting period. Finally, use this report to reconcile an account across
several periods.
4.1.6. Validate the Work in Process Inventory

If Oracle Work in Process is installed, check the work in process inventory balances
against transactions with the WIP Account Distribution Report, by summary or
detail.
The WIP Account Distribution Report details account information for work in
process cost transactions, including resource, overhead and outside processing
charges, cost updates, and period close and job close variances. The system groups
the client's transactions by job or schedule, by transaction type, and orders the client's
transactions by earliest transaction date. Detailed account information for specific
accounts, general ledger batches, or both can be listed in order to help reconcile the
general ledger.
The Material Account Distribution reports lists material cost transactions such as
issues, completions, and scrap.
4.1.7. Transfer to GL
If time permits, it is recommended to run the Transfer transactions to GL process up
to the period end date before closing the period. Closing a period automatically
executes the general ledger transfer, but the process can be run without closing the
period, using the General Ledger Transfer window. Since a period, once closed,
cannot be reopened, running this process prior to closing the period facilitates
proofing of the interfaces transactions and any adjustments to the period can be
made via new inventory transactions as required.
When more than one period is open, the transfer selects transactions from the first
open period up to the entered transfer date, and passes the correct accounting date
and financial information into the general ledger interface.
When transferring detail entries, the accounting date in the GL_Interface table is
populated with the period end date of the accounting period. When summary entries
are with two periods open, and a transfer date is entered in the second period, the
transfer process assigns the period one end date for all the summarised transactions
in period one, and assigns the entered transfer date for the summarised transactions
in period two.
View the General Ledger Transfer History to ensure that all transactions have been
successfully transferred to the General Ledger. Navigate to the General Ledger
Transfer window and search for all transfers with a status of Error.
The Journal Import Execution report should also be reviewed as part of the transfer
to GL. This may be performed by the GL group (refer to General Ledger Practice
Aid for additional details)
4.1.8. Close the current Oracle Payables and Oracle Purchasing Periods
Complete all steps required to close Oracle Payables and Oracle Purchasing. Oracle
Payables is closed prior to Oracle Purchasing to enable running of purchase accruals
to accrue expenses on un-invoiced receipts. If Oracle Purchasing or Oracle Inventory
are closed, a receipt cannot be entered for that period. However, as a manual
procedure, Oracle Purchasing should be closed before Oracle Inventory.
4.1.9. Close the Current Inventory Period

Closing the inventory period using the Inventory Accounting Periods window
automatically transfers summary transactions to the general ledger interface table.
The earliest accounting period with a status of Open or Error.
This process needs to be performed for each Inventory Organisation defined. The
period close performs the following:
o Closes the open period for Oracle Inventory and Oracle Work in Process.
o Creates summary or detail inventory accounting entries in the GL interface.
o Creates summary or detail work in process accounting entries in the GL interface.
o Calculates period-end sub-inventory balances.
For each sub-inventory, the period close period adds the net transaction value for the
current period to the previous period’s ending value. This creates the period-end
value for the current period. The period-end values by sub-inventory can be viewed
via the Period Close Enquiry form, or reported with the Period Close Summary
Report.
The period close process automatically transfers all job costs and variances by general
ledger account. Discrete jobs and certain non-standard jobs are closed separately. Job
close performs the necessary accounting for each job, including variance calculations.
For expense non-standard jobs, the period close process writes off any remaining
balances and transfers any period costs to the general ledger.
4.1.10. Open the Next Inventory Period

Open the next inventory period using the Inventory Accounting Periods window.
This process needs to be completed for each Inventory Organisation defined.
4.1.11. Run Standard Period-End Reports (Optional)

o Inventory Value Report
o Reconcile Oracle Inventory with the General Ledger.

o Period end procedures should be in place to ensure that all Inventory postings are
accounted for in the correct period.
o Where more than one open period is determined, procedures should ensure they
close within a few days after month end (2-5 days).
o For period-end adjustment purposes, it may be appropriate to hold more than one
period open per inventory organisation at the same time, although at other times,
having only one period open at a time ensures that transactions are correctly
dated and posted to the correct accounting period.

o Closing an inventory period permanently closes the period and no further
transactions can be charged to that period.
o The Transfer transactions to GL Process must be run for each Inventory
Organisation. If this step was by-passed, and the period was closed, a GL Transfer
would automatically be initiated, but no adjustments to that period could then be
entered, since transactions cannot be posted to a closed period, and a closed
period cannot be re-opened.
o Purchasing and receivables periods should be closed before Inventory period.

o None

o None
G. Inventory Security
1. Organisation Security
Clients can specify which organizations a responsibility can access by mapping
responsibilities to organizations. Once this mapping is set up, a user logging into an Oracle
Manufacturing product is restricted to the organizations mapped to the responsibility
chosen. The Change Organization window is restricted as well.
Until an organization is assigned to a responsibility in this window, all responsibilities have

access to all organizations. Once clients restricted any responsibility to an organization, they
must then explicitly define the organizations which all responsibilities can access.
This feature does not restrict access once the user is in the application. Users with access to
functions that cross multiple organizations (such as ATP, Inter-organization Transfers, Item
Search, Multi-organization Quantity Report, and so on) can still specify any valid
organization when running these functions.
System managers determine which responsibilities a user can access when they establish
system security. Refer to the System Administration Practice Aid for more information on
user assignments.
Users are able to easily inquire about, plan for and receive expected shipments against
purchase orders or requisitions or RMAs originating in multiple operating units without
needing to close windows and change responsibilities.

o None

o None

o None

o None
2. Miscellaneous Transaction Form

2.1. Uses of Miscellaneous Transactions
Issue material to or receive material from general ledger accounts in the current organisation.
This allows issuing material to groups that are not inventory, receiving, or working in process
such as a research and development group or an accounting department.
Perform manual adjustments to the general ledger by receiving material from one account to
inventory, and then issuing that material from inventory to another account.
Perform user-defined transaction types and sources to further classify and name the
transactions. Use this feature to issue items to individuals, departments, or projects; or to issue
damaged items to expense accounts such as scrap.
Receipt items that were acquired by means other than a purchase order from a supplier. Also
this feature can be used to load all item on-hand quantities when the client starts implementing
Oracle Inventory. If enabled, shortage alerts for the miscellaneous transaction type being
performed can be set. Also, a miscellaneous transaction can trigger a shortage notification to be
sent to various pre-defined individuals.

o With a miscellaneous transaction, materials can be issued or received from
general ledger accounts in the current organisation. This allows issuing material
to groups that are not inventory, receiving, or working in process such as a
research and development group or an accounting department inventory to
another account.

o Access to Miscellaneous Transaction function should be restricted and monitored
by management, in order to make sure that deliverables are physically received
and transferred according to client requirements and avoid Inventory
misstatement.
o Material Workbench lets users see material across organizations categorized into
three buckets: Inbound, Receiving, On-hand.
o Professional Buyer Work Centre: buyers can view and manage documents like
requisitions, purchase orders etc. across the entire operating unit they service.
Similarly in Oracle Inventory, visibility to Purchase Orders, Advanced Shipment
Notices, and Internal Orders across operating units through one form greatly
increases the information available and facilitates better decision-making.

o Deliverables can be physically received using the Miscellaneous Transaction
function “Receipt items that were acquired by means other than a purchase order
from a supplier”. Also, manual adjustments to the general ledger by receiving
material from one account to inventory can be made.

o None
H. Restricted Access/Segregation of Duties

When conducting an Oracle restricted access / segregation of duties review, there are three
main access considerations:
 Application Setups
 Standing Data
 Segregation of Duties
1. Application Setups
Application Setups are defined as configurations that change the behaviour of the
application. Examples of potential Application Setups within the Inventory process include:
 Inventory Module
 Organisations
 Subinventories
 Items
 Costing
These setups are generally only configured upon installation, upgrades, or major business
events. Changes in business process setups could cause system failure and/or data
inconsistencies. Therefore, access to these setups should be restricted to the IT department
or similar technical role.
In addition, because of the potential impact on key financial controls associated with these
setups, any changes to these should be implemented via the client’s stated change
management process & controls. Please note that the definition of what constitutes
application setups will vary from client to client, and practitioners should discuss these
concepts with clients prior to commencing any Oracle work.
2. Standing Data
Standing Data are defined as either setups that affect the processing of transactions or is
used in the processing of transactions that could have a financial statement impact.
Examples of potential Standing Data within the Inventory Cycle include:
 Item Master
 Item Entry
 Item Costs
 ABC Analysis
These setups are generally configured upon installation, upgrades, or major business events.
However, they may also need to be changed periodically to reflect ongoing changes to the
business environment. Changes in standing data could cause financial processing
difficulties and/or changes to standard transaction accounting procedures. Therefore,
access to these setups should be limited to a select few business process or IT owners who
do not have transactional access.
Changes to Standing data setups should be approved prior to implementation due to their
potential impact on key financial controls and/or processes. Please note that the definition
of what constitutes standing data will vary from client to client, and practitioners should
discuss these concepts with clients prior to commencing any Oracle work.
3. Segregation of Duties
Segregation of Duties is defined as segregating access to two or more sensitive functions
that, when combined, could present a risk of material misstatement, management override,
fraud or theft.
3.1. Designing SoD

Segregation of Duties and Restricted access design could be complex and is dependent upon
each client's environment. Clients should acknowledge the inherent accounting and unique
business risks that require certain activities to be performed by different individuals. In
either circumstance, the rules and related documentation developed should be associated
with the client's significant financial risks.
Segregation of Duties and Restricted access design could include a balance between
separating all conflicting activities and mitigating all segregation of duties violations. This
decision making process should include formal elements of SoD analysis. When designing
SoD principles, the following should be kept in mind:
 Envision the “ideal” environment, regardless of head count. However, risk and
likelihood should be considered.
 Smaller areas / business units may not be able to implement proper SoD rules due to
resource constraints.
 All high-risk financial systems should be considered, not just Oracle.
 When SoD is impossible, mitigating / compensating controls should be identified
Generally, the following SoD principles should be adhered to:

 Users with transactional access are restricted from standing data and application setup.
 Cross module (currency, ledger) and/or hidden access (process tab) should typically not
exist
 Users should not be able to create and approve their own transactions.
 Custody of assets is separate from accounting transactions.
 IT support should not violate the SoD rules. Support procedures should be developed
that will allow for the effective remediation of technical issues while giving the business
process owners a stable, controlled, monitored accounting environment.
3.2. Documentation of Rules

Management should have a formal set of documents identifying the relevant segregation of
duties and restricted access risks and conflicts that could exist for each in scope business
cycle. This set of documentation should then include the relevant segregation of duties and
restricted access controls that the client implemented to mitigate these risks. These controls
could include a balance between segregation of duties, restricted access and/or other
business mitigating controls.
Ideally, the client has developed a matrix of business processes (including Oracle
functionality) that identifies the SoD and restricted access rules for a business process. An
example of this matrix is identified below. The X's in the matrix identify the SoD conflict
between the x and y axis of the matrix. The H's identify the agreed-upon sensitive business
transactions that should also be tested with regards to restricted access.
3.3. SoD Monitoring

Once rules are established, the client can then determine the more effective cost of the
control to mitigate the segregation of duties risk or to rely on the separation of conflicting
activities. Small environments could leverage a manual approach to SoD management.
Large environments will almost always require technology to manage SoD effectively.
Typically SoD management is driven and managed by the technology group. Unless the
business process owners sponsor and drive the project, SoD management is often much less
effective.
3.3.1. Manual Monitoring

If the client chooses to sustain SoD on paper, then the following may be used:
o Access Authorisation: Testing the authorisation sign-off form is a common test for
IT general control reviews. In this, evidence that existing user access was
compared to requested access should be documented. Access authorisation makes
an assumption that management understands the risk of granting the additional
access and the functions associated with each responsibility
o SoD Maintenance: If the client's responsibility design is good, then the client
might have a higher-level SoD matrix based on Oracle responsibilities. This
responsibility-level SoD matrix would help management more quickly identify
potential SoD issues before granting additional access.
3.3.2. Automated Monitoring

If the client chooses technology to help sustain their SoD environment, then the client
should maintain testing over the design and implementation of the solution and
document their daily use of the solution. On-going maintenance of the technology
solution should follow the client's formal change management process and controls.

o The challenge to our clients is that they either do not have the necessary time and
staffing resources to identify and document the segregation of duties rules
applicable to the company or they underestimate the commitment required.
o Not only should specific SoD issues be addressed, but clients should look to
identify the root cause of these issues.
o RBAC (Role Based Access Control, described further in the system administration
practice aid) is currently only applicable for self-service applications (iTime,
iExpense, iProcurement, etc).
o Each client's Segregation of Duties principles must be considered in light of the
client's specific business processes and risks.

o None

o The majority of Oracle seeded responsibilities contain SoD conflicts.
o Clients tend to build their responsibilities based on functionality and often simply
make copies of the default Oracle responsibilities, with minor modifications. It's
highly likely that these revised responsibilities have SoD conflicts…oftentimes
unbeknownst to clients.

o For general guidance on Access and Segregation of Duties control considerations
in the context of a financial audit or an audit of internal controls over financial
reporting, refer to PwC Audit 4164 and 4164.01.
o For a suggested list of detailed SOD principles and their associated risks, refer to
PwC GATE. GATE's standard reports contain baseline, generic rules that are
industry agnostic and should be tailored/customized for each client's
environment.
o PwC should recognise how the client manages SoD and make adjustments to the
testing strategy accordingly.
o In complex environments such as Oracle EBS, practitioners should consider going
beyond the access approval form and consider the overarching process
management uses when deciding to approve access.
o Processes Tab Access: "AZN" menus are those menus that are associated with the
Process Navigator Tab. When testing for segregation of duties, the reports
generated from the tool will identify the menus associated with the issue.
o Without understanding the menu being used and the implications with the
"AZN" menu, the segregation of duties analysis will appear to contain many false
positives. Practitioners should be aware of the AZN menu and help the client
understand where the excessive or conflicting access exists.
o As many concurrent processes have the similar financial impact as the direct
entry of transactions (AutoInvoice, Automatic Journal Posting, Revenue
Recognition), they should be included in SOD analysis; where those transactions
are deemed to be relevant to the scope of procedures.
o PwC should also expect false positives in the SoD analysis. False positives are
results in the SoD analysis that indicate where issues exist when they do not or
are simply less pervasive.
o PwC should confirm the legitimacy of the SoD rules and test results prior to
raising issues with the client.
o Currently, GATE scripts cannot be used with clients who have RBAC installed.
I. Key Inventory Reports

Report Name Description
Physical Inventory Item Use the Physical Inventory Item Accuracy Report to report
Accuracy Report on physical inventory adjustments
Global Transaction Purge Use the Global Transaction Purge Report to purge
inventory transactions across multiple organizations set
up in a hierarchy.
Open Period Status Control Use the Open Period Status Control program to open a
period across multiple organization and periods.
Close Period Status Control Use the Close Period Status Control program to close a
period across multiple organizations and periods.
Item Sub-inventory Report This report lists items assigned to sub-inventories. You can
also use this report to:
- Review items restricted to sub-inventories
- Identify items min-max planned at the sub-inventory
level
- Review the default requisition information used by the
replenishment processor for items assigned to sub-
inventories.
Item Organization Use the Item Organization Assignment program to assign

Assignment Report an item, range of items, category set, or range of categories
to multiple organizations belonging to the same Item
Master Organization. This aids in the management of item
setup and maintenance and is useful for companies that
have a large number of inventory organizations utilizing
the same item master.
PAR Replenishment Count This report addresses requirements that relate to the
Worksheet health care industry. This report is similar to the Item
Replenishment Count Report, but it addition captures
information that is specific to hospitals. This report
captures the time and date when you captured the count.
It also captures the locator information, item and item
description, count type, UOM, PAR level, count quantity,
supply quantity, Reorder Expense Quantity Account,
Source Type, Source Organization, and Source Sub-
inventory When you run this report, it reflects the changes
made to the setup of the replenishment count header and
lines.
Min-Max Planning Report This report shows planning information for all items, or
items with on-hand balances either below or above their
assigned minimum or maximum on-hand quantities. You

also have the option to generate internal or purchase
requisitions for Buy items and WIP unreleased jobs for all
items for which the on-hand quantity plus the on-order
quantity is less than the min-max minimum amount.
Lot Inventory Report This reports provides an overview of item lots, quantities,
and lot statuses in all or the selected subinventories and
locators within the organization. This aids the
management in retrieving information regarding details of
the lot inventory.
Material Status Definition This report provides an overview of each material status
Report and how it is used. This can help management identify
enabled transactions for all material in each subinventory
and also determines whether reservations are allowed for
the subinventory, whether the material in the
subinventory is included in ATP, or whether the material
is nettable.
Lot Master Report This report provides an overview of the information set up
in the lot master. This report can be run for a specific item,
or all items in the organization.
Grade Change History This report provides a view to all of the grade changes
made during a given time period for a particular item
within an organization.
Item Cross-References Listing User can use the Item Cross References Listing to report
cross-references that associate with each item.
For example, it shows the relationships between new item
numbers and other entities such as old item numbers by
defining cross-reference types. Using these cross-reference
types, one can define cross-references to store additional
information about inventory items.
Move Order Pick Slip Report Use the Move Order Pick Slip Report to print move order
pick slips. You can run this report before or after you
commit the move order transaction.
Create Deferred Logical The Create Deferred Logical Transactions concurrent

Transactions request enables you to defer the creation of logical
transactions for a pure shipment across multiple operating
units.

J. Key Terms
A number of terms that are used within the Oracle Inventory module are listed below with an
associated definition.
Term Description
Accounting Flex The code used to identify a general ledger account in an Oracle Financials
field application. Each Accounting flex field value corresponds to a summary
or rollup account within the chart of accounts.
Action Set A sequence of alert actions that are enabled for a particular alert. A
sequence number to each action can be assigned.
An action set to specify the order in which the actions are performed can
be included.
Adjustment Determines when Inventory does not make a cycle count adjustment.
Tolerance Inventory does not make an adjustment if the physical count differs from
the on–hand inventory quantity by less than the specified tolerance. An
adjustment tolerance can be defined when define an item is defined.
Alert A mechanism that checks the database for a specific exception condition.
An alert is characterised by the SQL SELECT statement it contains. A SQL
SELECT statement tells the application what database exception to
identify as well as what output to produce for that exception.
Alert Action An action the client wants the alert to perform. An alert action can
depend on the output from the alert. An action can include sending an
electronic mail message to a mail ID, running an Oracle Applications
program, running a program or script from the operating system, or
running a SQL script to modify information in the database. It is possible
to have more than one action for an alert, and an action can incorporate
the output of the alert.
ATP Available-To-Promise is an ability of Oracle to determine manufacturing
/ delivery dates from the estimated time it will take to manufacture. This
is driven from customer requests for an item.
Audit Trail Audit Trail tracks which rows in a database table(s) were updated at what
time and which user was logged in using the form(s). Several updates can
be tracked, establishing a trail of audit data that documents the database
table changes.
Backflush Backflush is the process of performing costing in a Just in Time
environment, by flushing costs out of the system and charging them
directly to the Finished Goods inventory account.
Bill of Material A list of component items associated with a parent item and information
about how each item relates to the parent item. Oracle Manufacturing
supports standard, model, option class, and planning bills. The item
information on a bill depends on the item type and bill type. The most
common type of bill is a standard bill of material.
BOM item type An item classification that determines the items that can be used as
components in a bill of material. BOM Item types include standard,
model, option class, and planning items.
Term Description
Buyer Person responsible for placing item resupply orders with suppliers and
negotiating supplier contracts.
Category Code used to group items with similar characteristics, such as plastics,
metals, or glass items.
Cost Type A set of costs for items, activities, resources, outside processing, and
overheads. The client may have unlimited cost types for each
organisation, but only one is used to record cost transactions. The Frozen
Standard cost type is used for standard costing; the Average Costs type is
used for Average costing. Others could be defined for simulation or
temporary purposes.
Cost Variance The difference between the actual and expected cost. Oracle
Manufacturing and Payables supports the following cost variances:
invoice price, resource rate, and standard cost variances.
Destination An inventory organisation that received item shipments from a given
Organisation organisation.
End Item Any item that can be ordered or sold.
Finished Good Any item subject to a customer order or forecast.
Fixed Lot Size An item attribute the planning process uses to modify the size of planned
Multiplier order quantities or repetitive daily rates for the item. For discretely
planned items, when net requirements fall short of the fixed lot size
multiplier quantity, the planning process suggests a single order for the
fixed lot size multiplier quantity.
Fixed Order An item attribute the planning process uses to modify the size of planned
Quantity order quantities or repetitive daily rates for the item. When net
requirements fall short of the fixed order quantity, the planning process
suggests the fixed order quantity. When an item. A forecast for an item
has a forecast date and an associated quantity.
General Ledger The process of creating a postable batch for the general ledger from
transfer summarised inventory/work in process activity for a given period. Using
Journal Import in General Ledger, a postable batch in the general ledger
can be created. After running Journal Import, the journal can be posted
using the General Ledger posting process.
Internal orders Orders that are performed between organisations within the same entity
/ group of companies. Records are maintained to identify these, but
typically on consolidation they will net off (purchase order in Company A
nets off against Sales orders in Company B for these sales orders).
Inventory The set of controls, default options, and default account numbers that
Parameters determine how Inventory functions.
Item Attribute To maintain item attributes at the item master attribute level or the
control level organisation specific level by defining item attribute control consistent
with the company policies. For example, if the company determines serial
number control at headquarters regardless of where items are used, serial
Term Description
number attribute control at the item master level can be defined and
maintained. If each organisation maintains serial number control locally,
they maintain those attributes at the organisation specific level
Item Attributes Specific characteristics of an item, such as order cost, item status, revision
control, COGS account, etc.
Item Master This is the list of all items in an organisation.
Item Master Level An item attribute the client controls at the item master level as opposed to
Attributes controlling at the organisation level.
Lot A specific batch of an item identified by a number.

Material Transfer between, issue from, receipt to, or adjustment to an inventory
Transaction organisation, sub inventory, or locator. Receipt of completed assemblies
into inventory from a job or repetitive schedule. Issue of component items
from inventory to work in process.
Organisation– An item attribute the client controls at the organisation level.
Specific level
Attribute
Perpetual Describes the inventory process whereby an organisation maintains
Accounting inventory and cost of good sold records on a per transaction basis.
Inventory transactions are accounted for as each sales order or purchase
order is fulfilled.
Periodic Describes the inventory process whereby stock counts are taken on a
Accounting periodic basis to determine the cost of goods sold, and inventory values.
Picking Rule A user–defined set of criteria to define the priorities Order Management
uses when picking items out of finished goods inventory to ship to a
customer. Picking rules are defined in Oracle Inventory.
Planned Purchase A type of purchase order issued before actual delivery of goods and
Order services for specific dates and locations are ordered. The client normally
enters a planned purchase order to specify items the client wants to order
and when the client wants delivery of the items. Later a shipment release
against the planned purchase order can be entered when the client
actually want to order the items.
Quantity Variance A limit that can be defined for the difference between the on–hand
Tolerance quantity and the actual cycle count quantity. A positive and negative
quantity variance tolerances as percentages of the on–hand quantity can
be expressed.
RMA Permission for a customer to return items. Receivables allow the client to
authorise the return of sales orders as well as sales made by other dealers
or suppliers, as long as the items are part of the item master and price list.
Serial number A number assigned to each unit of an item and used to track the item.
Serial Number A manufacturing technique for enforcing use of serial numbers during a
Control material transaction.
Term Description
Serialised Unit The unique combination of a serial number and an inventory item.
Set of Books A financial reporting entity that partitions General Ledger information
and uses a particular chart of accounts, functional currency, and
accounting calendar. This concept is the same whether or not the Multi–
organisation support feature is implemented. In R12, this is now a
Ledger. See the Oracle R12 RL Practice aid for more information on this
new concept.
Standard Item Any item that can have a bill or be a component on a bill except planning
items, option classes, or models. Standard items include purchased items,
subassemblies, and finished products.
Standard Purchase A type of purchase order issues when delivery of goods or services for
Order specific dates and locations for the company are ordered. Each standard
purchase order line can have multiple shipments and the quantity of each
shipment across multiple accounts can be distributed.
Work in process An item in various phases of production in a manufacturing plant. This
includes raw material awaiting processing up to final assemblies ready to
be received into inventory.
Work day calendar A calendar that identifies available workdays for one or more set.

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Oracle Inventory Training Manual OracleApps88

INVENTORY OVERVIEW ....................................................................................................... 2

BUSINESS SETUPS OVERVIEW ............................................................................................ 4

STANDING DATA OVERVIEW .......................................................................................... 46

TRANSACTIONS OVERVIEW ............................................................................................. 76

INVENTORY SECURITY...................................................................................................... 103

RESTRICTED ACCESS/SEGREGATION OF DUTIES .................................................. 107

KEY INVENTORY REPORTS .............................................................................................. 112

KEY TERMS ............................................................................................................................. 115

D. Business Setups Overview

1.1.1. Item Catalogs

1.1.2. Item Categories

1.1.3. Sales Orders

1.1.4. Stock Locators

1.1.5. System Items

1.2. Units of Measure

1.4. Freight Carriers

1.5. Inventory Transaction Types

1.5.1. Transaction Sources

1.5.2. Transaction Actions

1.5.3. Transaction Reasons

1.5.4. Shortage Messages

1.6. Inventory-Related Profile Options

INV: Indicates the currency conversion for inter-company Inventory predefines

INV: RC Indicates the status of Subinventory Replenishment Inventory predefines

INV: Enables the client to create only one move order

INV: Always This option appends AP Invoice number with shipping

1.7. Control Considerations

1.7.1. Business Process Variables

1.7.2. Control Dependencies

1.7.3. Control Limitations

1.7.4. Testing Notes

1.7.5. Multi-Org Access Control

1.7.6. Dual Unit of Measure Control

1.7.7. Material Status Control

2.1. Inventory Organizations

2.2. Costing Organizations

2.3. Accounting Organization

2.4 Organisation Parameters

2.4.1. Inventory Parameters

Inventory Setting Comments

Capacity The Inventory's total maximum load weight,

2.4.2. Costing Info

 AVERAGE: This type of costing is for

Project Cost If the Project Cost Collection Enabled check

Rates Cost When the Costing Method is Average, the

Costing Setting Comments

2.4.3. Revision, Lot, Serial

Lot Control - One of the 3 values must be selected:

Revision/Lot/Serial Setting Comments

Lot Control - Zero Indicates whether to add zeroes to right-

Serial Control - One of the 2 values must be selected:

Revision/Lot/Serial Setting Comments

Genealogy In order to support increased product

Enhanced Lot In order to support both lot and serial

Support for In this feature, the item attribute will

2.4.4. ATP, Pick, Item-Sourcing Parameters

ATP, Pick, Item- Setting Comments

A picking order of 1 means

Picking Defaults If the configuration is enabled, pick In WMS (Warehouse

ATP, Pick, Item- Setting Comments

2.4.5. Inter-Org Information

Inter- Default inter-organisation cost accounts For average cost