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Student Guide

D49489GC20
Edition 2.0
April 2009
D59282

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R12 Oracle Inventory


Management Fundamentals

Copyright 2009, Oracle. All rights reserved.


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Authors
Tyra Crockett, Maneesha Nanda
Technical Contributors and Reviewers
Jennifer Sherman, Susan Flierl, Ronald Delong, David Nelson, Itzik Pripstein
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R12 Overview of Oracle Inventory ................................................................................................................1-1


R12 Overview of Oracle Inventory ...............................................................................................................1-3
Objectives ......................................................................................................................................................1-4
Overview .......................................................................................................................................................1-5
Inventory Capabilities....................................................................................................................................1-6
Receipt to Issue Life Cycle............................................................................................................................1-8
Receiving Inventory ......................................................................................................................................1-9
Transferring Inventory...................................................................................................................................1-12
Issuing Inventory ...........................................................................................................................................1-14
Oracle Inventory Application Integration......................................................................................................1-16
Integration of Oracle Inventory to Financial Applications ............................................................................1-18
Summary........................................................................................................................................................1-19
R12 Defining Inventory Organizations..........................................................................................................2-1
R12 Defining Inventory Organizations..........................................................................................................2-3
Objective........................................................................................................................................................2-4
Inventory Organizations ................................................................................................................................2-5
Inventory Organization Structure ..................................................................................................................2-6
Sample Inventory Organization.....................................................................................................................2-7
Multi-Organization Structure.........................................................................................................................2-8
Setting Up Locations .....................................................................................................................................2-9
Defining Organizations..................................................................................................................................2-10
Inventory Parameters.....................................................................................................................................2-11
Costing Parameters ........................................................................................................................................2-12
Revision, Lot, Serial, and License Plate Number (LPN) Parameters ............................................................2-13
ATP, Pick, Item-Sourcing Parameters...........................................................................................................2-14
Interorganization Parameters .........................................................................................................................2-15
Other Account Parameters.............................................................................................................................2-16
Warehouse Management Parameters.............................................................................................................2-17
What Is a Subinventory?................................................................................................................................2-18
What Is a Subinventory .................................................................................................................................2-19
Defining Subinventories ................................................................................................................................2-20
Locator Control .............................................................................................................................................2-21
Dynamic and Static Locators.........................................................................................................................2-22
Subinventory-Locator Relationship...............................................................................................................2-23
Locator Flexfield Structure............................................................................................................................2-24
Interorganization Shipping Networks............................................................................................................2-25
Shipping Method ...........................................................................................................................................2-27
Additional Set Up Steps ................................................................................................................................2-28
Additional Organizational Setups..................................................................................................................2-29
Copying Inventory Organizations..................................................................................................................2-30
Organization Hierarchy .................................................................................................................................2-32
Organization Reports.....................................................................................................................................2-34
Profile Options...............................................................................................................................................2-36
Implementation Considerations .....................................................................................................................2-37
Summary........................................................................................................................................................2-43
R12 Units of Measure ......................................................................................................................................3-1
R12 Units of Measure....................................................................................................................................3-3
Objectives ......................................................................................................................................................3-4
Units of Measure ...........................................................................................................................................3-5
Uses of Units of Measure ..............................................................................................................................3-6
Unit of Measure Class ...................................................................................................................................3-7
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Table of Contents

R12 Defining and Maintaining Items Fundamentals....................................................................................4-1


R12 Defining and Maintaining Items Fundamentals .....................................................................................4-3
Objective........................................................................................................................................................4-4
What is an Item? ............................................................................................................................................4-5
Steps to Setup, Define, and Maintain Items...................................................................................................4-6
Defining Items ...............................................................................................................................................4-7
Item Master Organization ..............................................................................................................................4-9
Item Master....................................................................................................................................................4-11
Item Attributes...............................................................................................................................................4-12
Item Attribute Groups....................................................................................................................................4-13
Item Status .....................................................................................................................................................4-14
Unit of Measure Attributes ............................................................................................................................4-15
Item Statuses and Attributes ..........................................................................................................................4-17
Status Attributes and Functionality ...............................................................................................................4-18
Status Attribute Interdependencies ................................................................................................................4-21
Item Attribute Relationships..........................................................................................................................4-24
Item Templates ..............................................................................................................................................4-25
Creating Item Templates ...............................................................................................................................4-26
Enabling Attributes in a Template .................................................................................................................4-27
Organization Assignment and Organization Items ........................................................................................4-28
Control Levels ...............................................................................................................................................4-29
Revision Control............................................................................................................................................4-31
Restricting Items to Subinventories...............................................................................................................4-33
Item Relationships .........................................................................................................................................4-34
Categories and Category Sets ........................................................................................................................4-35
Assigning Items to Categories .......................................................................................................................4-36
Item Catalogs.................................................................................................................................................4-37
Deletion Constraints and Deletion Groups ....................................................................................................4-38
Deletion Constraints ......................................................................................................................................4-39
Item Reports ..................................................................................................................................................4-41
Profile Options...............................................................................................................................................4-44
Implementation Considerations .....................................................................................................................4-50
Summary........................................................................................................................................................4-52
R12 Lot and Serial Control.............................................................................................................................5-1
R12 Lot and Serial Control............................................................................................................................5-3
Objective........................................................................................................................................................5-4
Lot Control Overview....................................................................................................................................5-5
Child Lots ......................................................................................................................................................5-6
Setting up Lot Control (Organization Parameters) ........................................................................................5-7
Lot Number Uniqueness ................................................................................................................................5-8
Setting up Lot Control (Item Attributes) .......................................................................................................5-9
Managing Lots...............................................................................................................................................5-11
Expired Lots ..................................................................................................................................................5-13
Disabled Lots.................................................................................................................................................5-14
Lot Number Purging......................................................................................................................................5-15
Cycle Counts Under Lot Control...................................................................................................................5-16
Physical Inventory Under Lot Control...........................................................................................................5-17
Serial Number Overview ...............................................................................................................................5-18
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Unit of Measure Conversions ........................................................................................................................3-8


Lot-Level Unit of Measure Conversions .......................................................................................................3-9
Units of Measure Setup .................................................................................................................................3-10
Unit of Measure Reports................................................................................................................................3-11
Profile Options...............................................................................................................................................3-12
Organization Parameter Setup .......................................................................................................................3-13
Implementation Considerations .....................................................................................................................3-14
Summary........................................................................................................................................................3-15

R12 Transaction Setup....................................................................................................................................6-1


R12 Transaction Setup...................................................................................................................................6-3
Objectives ......................................................................................................................................................6-4
Overview .......................................................................................................................................................6-5
Inventory Transactions ..................................................................................................................................6-6
Move Orders..................................................................................................................................................6-7
Transaction Source Types..............................................................................................................................6-8
Transaction Action ........................................................................................................................................6-10
Transaction Reasons ......................................................................................................................................6-12
Transaction Types..........................................................................................................................................6-13
Predefined Transaction Types .......................................................................................................................6-14
Transaction Managers....................................................................................................................................6-15
Running Transaction Managers.....................................................................................................................6-16
Creating Picking Rules ..................................................................................................................................6-18
Account Aliases.............................................................................................................................................6-20
Accounting Periods........................................................................................................................................6-21
Material Shortage Alerts and Notifications ...................................................................................................6-22
Setting Up Shortage Alerts and Notifications................................................................................................6-24
Setting Up for Move Orders ..........................................................................................................................6-25
Setup Steps for Move Orders.........................................................................................................................6-27
Profile Options...............................................................................................................................................6-29
Implementation Considerations for Shortage Checks....................................................................................6-35
Implementation Considerations for Move Orders .........................................................................................6-36
Summary........................................................................................................................................................6-37
R12 Issue and Transfer Material ...................................................................................................................7-1
R12 Issue and Transfer Material....................................................................................................................7-3
Module Objectives.........................................................................................................................................7-4
Overview of Inventory Transactions .............................................................................................................7-5
Inventory Transactions ..................................................................................................................................7-6
Inventory Transactions Without Documents and Requisitions......................................................................7-7
Inventory Transactions with Documents and Requisitions............................................................................7-8
Control Options and Restrictions...................................................................................................................7-9
Miscellaneous Transactions...........................................................................................................................7-10
Subinventory Transfer ...................................................................................................................................7-11
Inter-organization Direct Shipment ...............................................................................................................7-12
Inter-organization Intransit Shipment............................................................................................................7-13
Managing Receipts ........................................................................................................................................7-15
Express Receipts and Receiving Transactions...............................................................................................7-17
Direct Receipts ..............................................................................................................................................7-18
Standard Receipt............................................................................................................................................7-19
Inspection Receipt .........................................................................................................................................7-20
Move Orders..................................................................................................................................................7-21
Move Orders Process Flow............................................................................................................................7-22
Move Order Requisition Approval Process ...................................................................................................7-23
Benefits of Managed Material Flow in a Facility ..........................................................................................7-25
Move Order Source Types.............................................................................................................................7-27
Move Order Components ..............................................................................................................................7-29
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Generating Serial Numbers............................................................................................................................5-19


Serial Uniqueness ..........................................................................................................................................5-21
Maintaining Serial Numbers..........................................................................................................................5-23
Lot Genealogy ...............................................................................................................................................5-24
Serial Genealogy ...........................................................................................................................................5-25
Lot and Serial Reports ...................................................................................................................................5-26
Profile Options...............................................................................................................................................5-29
Implementation Considerations .....................................................................................................................5-31
Summary........................................................................................................................................................5-33

R12 On-hand and Availability........................................................................................................................8-1


R12 On-hand and Availability.......................................................................................................................8-3
Objectives ......................................................................................................................................................8-4
Overview of On-hand Quantity .....................................................................................................................8-5
Overview of Reservations..............................................................................................................................8-6
Overview of Availability ...............................................................................................................................8-7
Reservation Versus Allocation ......................................................................................................................8-8
Material Workbench ......................................................................................................................................8-9
Display Options .............................................................................................................................................8-10
Viewing Available Items ...............................................................................................................................8-12
Material Workbench Transactions.................................................................................................................8-13
Available to Promise .....................................................................................................................................8-14
What are Supply and Demand? .....................................................................................................................8-15
Uses of ATP in Oracle Inventory ..................................................................................................................8-16
ATP Rules Setup Steps..................................................................................................................................8-17
Defining Computation Options......................................................................................................................8-18
Specifying Supply and Demand Time Fences ...............................................................................................8-20
Specifying Demand Sources..........................................................................................................................8-24
Specifying Supply Sources ............................................................................................................................8-26
Setting Up Item and Bills for ATP Checking ................................................................................................8-27
ATP Checking ...............................................................................................................................................8-28
Reservation Types .........................................................................................................................................8-29
Supply Types .................................................................................................................................................8-30
Demand Types...............................................................................................................................................8-31
Reserving Material ........................................................................................................................................8-32
Reservation Management - Transfer Supply .................................................................................................8-34
Reservation Management - Transfer Demand ...............................................................................................8-35
On-hand and Availability Reports .................................................................................................................8-36
Profile Options...............................................................................................................................................8-37
Implementation Considerations .....................................................................................................................8-39
Summary........................................................................................................................................................8-40
R12 Material Status.........................................................................................................................................9-1
R12 Material Status .......................................................................................................................................9-3
Objectives ......................................................................................................................................................9-4
Material Status...............................................................................................................................................9-5
Material Status Control Levels ......................................................................................................................9-6
Material Status Transactions..........................................................................................................................9-7
Cumulative Effective Status ..........................................................................................................................9-8
Material Status Examples ..............................................................................................................................9-9
Setting Up......................................................................................................................................................9-10
Defining Item Material Status Control ..........................................................................................................9-11
Assigning Material Status Control to Subinventories and Locators ..............................................................9-12
Assigning Planning Statuses..........................................................................................................................9-13
Disabling Material Statuses ...........................................................................................................................9-14
Material Status Reports .................................................................................................................................9-15
Profile Option ................................................................................................................................................9-16
Implementation Considerations .....................................................................................................................9-17
Summary........................................................................................................................................................9-18
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Generate Move Orders...................................................................................................................................7-31


Move Order Allocating..................................................................................................................................7-33
Item Allocation ..............................................................................................................................................7-35
Transact Move Orders ...................................................................................................................................7-36
Mobile Transactions ......................................................................................................................................7-37
Managing Shipments .....................................................................................................................................7-39
Transactions Reports .....................................................................................................................................7-40
Summary........................................................................................................................................................7-45

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R12 Replenishment Fundamentals.................................................................................................................10-1


R12 Replenishment Fundamentals ................................................................................................................10-3
Objectives ......................................................................................................................................................10-4
Overview of Inventory Planning ...................................................................................................................10-5
Order Planning...............................................................................................................................................10-6
How Much to Order.......................................................................................................................................10-7
Replenishment Process for Intra-Org Supply Sources...................................................................................10-8
Replenishment Process for Supplier Supply Sources ....................................................................................10-9
Replenishment Process for Inter-Org Supply Sources...................................................................................10-10
Replenishment Process for Production Supply Sources ................................................................................10-11
Replenishment Methods ................................................................................................................................10-12
Overview of Inventory Forecasting ...............................................................................................................10-13
Forecast Types...............................................................................................................................................10-15
Forecast Setup and Maintenance ...................................................................................................................10-16
Oracle Inventory Replenishment Methods ....................................................................................................10-17
Replenishment Methods Levels.....................................................................................................................10-18
Safety Stock...................................................................................................................................................10-19
Economic Order Quantity..............................................................................................................................10-20
Overview of Reorder-Point Planning ............................................................................................................10-21
Uses of Reorder-Point Planning ....................................................................................................................10-22
Reorder-Point Planning Steps........................................................................................................................10-23
Performing Reorder-Point Planning ..............................................................................................................10-24
Overview of Min-Max Planning....................................................................................................................10-26
Uses of Min-Max Planning............................................................................................................................10-27
Min-Max Planning.........................................................................................................................................10-28
Min-Max Planning: How Much to Order? ....................................................................................................10-29
Min-Max Planning Steps ...............................................................................................................................10-30
Item Planning Attributes................................................................................................................................10-31
Min-Max Planning Setup Procedure..............................................................................................................10-32
Selecting a Planning Level ............................................................................................................................10-33
Entering Planning Attributes .........................................................................................................................10-34
Submitting the Min-Max Planning Requests.................................................................................................10-35
Overview of Replenishment Counting ..........................................................................................................10-37
Uses of Replenishment Counting ..................................................................................................................10-38
Replenishment Planning Steps ......................................................................................................................10-39
Subinventories Window ................................................................................................................................10-41
Item Subinventories Window ........................................................................................................................10-42
Item Subinventories: Order Modifier Tab .....................................................................................................10-43
Replenishment Count Headers ......................................................................................................................10-44
Replenishment Count Lines...........................................................................................................................10-45
Processing Replenishment Counts.................................................................................................................10-47
Mobile Replenishment Count Overview .......................................................................................................10-49
Overview of PAR Counting...........................................................................................................................10-50
Processing PAR Counts.................................................................................................................................10-51
Reorder Quantity for PAR Count ..................................................................................................................10-52
Overview of Kanban Replenishment.............................................................................................................10-54
Kanban Cards ................................................................................................................................................10-56
Kanban Planned Items ...................................................................................................................................10-57
Kanban Cards ................................................................................................................................................10-59
Kanban Supply Status....................................................................................................................................10-61
Kanban Replenishment Sources ....................................................................................................................10-62
Kanban Card Printing ....................................................................................................................................10-63
Planning and Replenishment Reports ............................................................................................................10-64
Profile Options...............................................................................................................................................10-66
Implementation Considerations .....................................................................................................................10-68
Summary........................................................................................................................................................10-72

R12 Table Information....................................................................................................................................12-1


R12 Table Information ..................................................................................................................................12-3
Objective........................................................................................................................................................12-4
Organization Tables.......................................................................................................................................12-5
Subinventories and Locator Tables................................................................................................................12-7
Item Master Tables ........................................................................................................................................12-9
Item Status Tables .........................................................................................................................................12-11
Item Categories Tables ..................................................................................................................................12-13
Item Reservation Tables ................................................................................................................................12-15
Inventory Transaction Tables ........................................................................................................................12-17
Summary........................................................................................................................................................12-19

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R12 Inventory Accuracy Fundamentals ........................................................................................................11-1


R12 Inventory Accuracy Fundamentals ........................................................................................................11-3
Objectives ......................................................................................................................................................11-4
Overview of Inventory Accuracy ..................................................................................................................11-5
ABC Analysis Overview ...............................................................................................................................11-6
Defining an ABC Analysis ............................................................................................................................11-7
Define and Run an ABC Compilation ...........................................................................................................11-8
ABC Compilation Criteria.............................................................................................................................11-9
ABC Valuation Scope ...................................................................................................................................11-11
Defining ABC Groups ...................................................................................................................................11-12
Defining ABC Classes...................................................................................................................................11-13
ABC Item Assignments .................................................................................................................................11-14
Cycle Counting Overview .............................................................................................................................11-16
Defining and Maintaining a Cycle Count ......................................................................................................11-17
Cycle Count Approval Tolerance ..................................................................................................................11-18
Approval Tolerances......................................................................................................................................11-19
Hit/Miss Tolerance ........................................................................................................................................11-21
Measurement Errors ......................................................................................................................................11-22
Cycle Count Items .........................................................................................................................................11-23
Automatic Scheduling ...................................................................................................................................11-25
Manual Scheduling ........................................................................................................................................11-26
Count Requests ..............................................................................................................................................11-27
Entering Cycle Counts...................................................................................................................................11-29
Cycle Count Open Interface ..........................................................................................................................11-30
Count Adjustments and Approvals ................................................................................................................11-31
Automatic Recounts ......................................................................................................................................11-32
Approving Cycle Counts and Adjustments ...................................................................................................11-33
Mobile Inventory Accuracy Overview ..........................................................................................................11-35
Physical Inventory Overview ........................................................................................................................11-36
Why Perform Physical Inventories? ..............................................................................................................11-37
Defining Physical Inventories........................................................................................................................11-38
Physical Inventory Tags ................................................................................................................................11-39
Inventory Snapshots ......................................................................................................................................11-41
Entering Physical Inventory Counts ..............................................................................................................11-43
Voiding Tags .................................................................................................................................................11-45
Approval Tolerances......................................................................................................................................11-46
Physical Inventory Adjustments ....................................................................................................................11-47
Accuracy Reports ..........................................................................................................................................11-48
Profile Options...............................................................................................................................................11-54
Implementation Considerations .....................................................................................................................11-55
Summary........................................................................................................................................................11-58

Preface
Profile
Before You Begin This Course

Working experience with Oracle Applications.

Prerequisites
There are no prerequisites for this course.

How This Course Is Organized


R12 Oracle Inventory Management Fundamentals is an instructor-led course featuring lecture
and hands-on exercises. Online demonstrations and written practice sessions reinforce the
concepts and skills introduced.

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Related Publications
Oracle Publications
Title
Oracle Inventory Users Guide

Part Number
B31547-02

System release bulletins

Installation and users guides

Read-me files

International Oracle Users Group (IOUG) articles

Oracle Magazine

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Additional Publications

Typographic Conventions
Typographic Conventions in Text

Caps and
lowercase
Courier new,
case sensitive
(default is
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Initial cap

Element
Glossary term (if
there is a glossary)
Buttons,
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filenames,
passwords,
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titles in crossreferences
SQL column
names, commands,
functions, schemas,
table names
Menu paths
Key names
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Plus signs

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Italic

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marks

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Example
The algorithm inserts the new key.
Click the Executable button.
Select the Cant Delete Card check box.
Assign a When-Validate-Item trigger to the ORD block.
Open the Master Schedule window.
Code output: debug.set (I, 300);
Directory: bin (DOS), $FMHOME (UNIX)
Filename: Locate the init.ora file.
Password: User tiger as your password.
Pathname: Open c:\my_docs\projects
URL: Go to http://www.oracle.com
User input: Enter 300
Username: Log on as scott
Customer address (but Oracle Payables)
Do not save changes to the database.
For further information, see Oracle7 Server SQL Language
Reference Manual.
Enter user_id@us.oracle.com, where user_id is the
name of the user.
Select Include a reusable module component and click Finish.
This subject is covered in Unit II, Lesson 3, Working with
Objects.

Use the SELECT command to view information stored in the


LAST_NAME
column of the EMP table.
Select File > Save.
Press [Enter].
Press and release keys one at a time:
[Alternate], [F], [D]
Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

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SELECT last_name
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Typographic Conventions in Oracle Application Navigation Paths


This course uses simplified navigation paths, such as the following example, to direct you
through Oracle Applications.
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
This simplified path translates to the following:

1.

(N) From the Navigator window, select Invoice then Entry then Invoice Batches
Summary.

2.

(M) From the menu, select Query then Find.

3.

(B) Click the Approve button.

Notations:
(N) = Navigator
(M) = Menu
(T) = Tab
(B) = Button
(I) = Icon
(H) = Hyperlink
(ST) = Sub Tab
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Lowercase

Typographical Conventions in Oracle Application Help System Paths


This course uses a navigation path convention to represent actions you perform to find
pertinent information in the Oracle Applications Help System.
The following help navigation path, for example
(Help) General Ledger > Journals > Enter Journals

1.

In the navigation frame of the help system window, expand the General Ledger entry.

2.

Under the General Ledger entry, expand Journals.

3.

Under Journals, select Enter Journals.

4.

Review the Enter Journals topic that appears in the document frame of the help system
window.

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represents the following sequence of actions:

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R12 Overview of Oracle


Inventory

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R12 Overview of Oracle Inventory

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Objectives

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Overview
Oracle Inventory treats many different types of things as inventory. Inventory can be:
Finished goods that you sell to customers
Services that you sell to customers
Spare parts for maintenance
Raw materials for manufacturing processes
Inventory you purchase from a supplier on consignment

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Overview

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Inventory Capabilities

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Inventory Capabilities

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Receipt to Issue
Oracle Inventory uses the receipt to issue process to manage your inventory. When inventory
arrives in your warehouse you receive it. After you receive inventory, you can transfer it within
your organization or to another organization. Finally, you can issue material out of Oracle
Inventory.

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Receipt to Issue Life Cycle

Receiving Inventory
There are different ways you can receive material into your organization.
Purchasing
You can use Oracle Purchasing to receive material from outside of your organization. You can
receive:
Purchase order receipts
Internal requisitions
In-transit receipts
Return material authorizations
Unexpected receipts

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Receiving Inventory

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Work in Process
You can use Oracle Work in Process to receive material from the manufacturing floor. You can
receive:
Component returns
Negative component issues
Assembly returns
Inventory
You can use Oracle Inventory to receive material in to your warehouse. You can receive:
Miscellaneous account receipts
Receipt from projects
User-defined receipts
Interorganization transfers

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Receiving Inventory

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Transferring Inventory
Different applications can generate requests to transfer inventory.
Shipping
You can use Oracle Shipping Execution to generate a transfer to move material from a storage
area to a staging to for shipping.
Order Management
You can use Oracle Order Management to generate a transfer to move material from a storage
area to a staging area for shipping.
Work in Process
You can use Oracle Work in Process to generate a transfer to acquire components for a project.

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Transferring Inventory

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Inventory
You can use Oracle Inventory to:
Transfer material between organizations
Transfer material within an organization
Replenish materials
Request transfers

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Issuing Inventory
You can use the following applications to issue material:
Order Management
Oracle Order Management can generate an inventory issue through:
Sales orders
Internal orders
Purchasing
Oracle Purchasing can generate an inventory issue for:
Return to vendor materials
Work in Process
Oracle Work in Process can generate an inventory issue through:
Component issues
Assembly returns

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Issuing Inventory

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Inventory
Oracle Inventory can issue stock through:
User-defined material issues
Interorganization transfers
Cycle count negative issue
Issue requests

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Integration of Oracle Inventory to Manufacturing Applications


Oracle Inventory interacts with the following applications:
Oracle Cost Management receives cost information and transaction rates from Oracle
Inventory. Oracle Inventory integrates to Oracle General ledger via Oracle Cost
Management
Oracle Work in Process provides work in process (WIP) activity and available to promise
(ATP) supply information to Oracle Inventory and receives item and on-hand quantity
information from Oracle Inventory.
Oracle Advanced Supply Chain Planning and Oracle Global Order Promising provide
ATP supply information and receive on-hand quantity and forecast information from
Oracle Inventory.
Oracle Bill of Materials receives item information from Oracle Inventory.
Oracle Engineering provides engineering item information and receives item information
from Oracle Inventory.
Oracle Order Management provides shipping, reservations, and demand information and
receives item, ATP, and on-hand quantity information from Oracle Inventory.
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Oracle Inventory Application Integration

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Oracle Purchasing provides receipt, delivery, ATP supply, and planning supply
information and receives item requisition, and interorganization shipment information
from Oracle Inventory.

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Integration of Oracle Inventory to Financial Applications


Oracle General Ledger provides ledger and currency exchange rates and receiving
accounting summary and detail information via Oracle Cost Management.
Oracle Payables receives Item information from Oracle Inventory.
Oracle Receivables provides intercompany invoice information and receives item
information from Oracle Inventory.
Oracle Assets receives item information from Oracle Inventory.

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Summary

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Chapter 2

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R12 Defining Inventory


Organizations

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Objective

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Inventory Organizations
An inventory organization is a facility where you store and transact items. Before you can use
Oracle Inventory, you must define one or more inventory organizations. Inventory
organizations represent distinct entities in your enterprise and can be one of the following:
A physical entity such as a manufacturing facility, warehouse, or distribution center.
A logical entity such as an item master organization, which you use to define items.
An inventory organization may have the following attributes:
An inventory organization can have its own location, ledger, costing method, workday
calendar, and items.
An inventory organization can share one or more of these characteristics with other
organizations.

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Inventory Organizations

Inventory Organization Structure


An inventory organization, where you store and transact items can have one or more
subinventories. Subinventories are unique physical or logical separations of material inventory,
such as raw material inventory, finished goods inventory, or defective goods inventory. In
Oracle Inventory, all material within an organization is held in a subinventory. You must
define at least one subinventory for every organization. You can track item quantities by
subinventory as well as restrict items to specific subinventories.
The subinventories in an inventory organization may be made up of one or more locators. You
use locators to identify physical areas where you store inventory items. You can track items by
locator and restrict items to a specific locator. Locator control is optional in Oracle Inventory.

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Inventory Organization Structure

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Sample Inventory Organization

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Multi-Organization Structure
Multi-Organization structure enables you to model multiple business units in an enterprise
using a single installation of Oracle applications. In a multi-organization architecture you can
keep data secure and separate from each business unit.
The following are the benefits of multi-organization structure:
You can use a single installation of any Oracle Applications product to support any
number of business units, even if those business units use a different ledger.
Secure access to data so users can access only relevant information.
You can define a organizational model that best suits your business requirements.
In Inventory, you can fulfill any Sales Order or Purchase Order regardless of them being
booked from any Inventory organization. You can also determine if any inter-company
invoicing needs to occur based on if the Sales Order or Purchase Order was booked in a
different Operating Unit other than the one to which the Inventory organization is
assigned.

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Multi-Organization Structure

Setting Up Locations
Define information describing the physical locations of employees and organizations.
Locations are shared between Oracle Inventory, Oracle Purchasing, and Oracle Human
Resource Management Systems. Locations flagged as global locations are available to all
business groups. You can associate each organization with only one location; however,
you can associate more than one organization with the same location.
Physical locations are defined in Oracle Human Resource Management Systems.

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Setting Up Locations

Defining Organizations
Classify the Organization
Choose an organization classification to describe the general purpose of your organization.
Examples of organization classifications are inventory organization, legal company, and
HR organization.
Choose inventory organization as your organization classification to use your organization
for inventory management.
Ledger
Tie each inventory organization to an operating unit. Each operating unit is associated to a
legal entity and a primary ledger.

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Defining Organizations

Inventory Parameters
Organization Features
You must enter organization information such as the organization code, and the item master
organization. The system defaults this field to the current organization. You must change this
for any organization that is not an item master organization. The item master organization
should be the first inventory organization you create.
Note: The Manufacturing Partner Organization functionality is only available in Japan, Taiwan
and Korea.
Products and Features
You can enable specific products on the Inventory Parameters tab. These include Oracle
Warehouse Management, Oracle Process Execution, and Oracle Enterprise Asset Management.
If you have Oracle Warehouse Management installed, then you can enable the Warehouse
Control System.

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Inventory Parameters

Costing Parameters
Standard costing: A costing method where a predetermined standard cost is used for charging
material,resource, overhead, period close, job close, and cost update transactions and valuing
inventory. Any deviation in actual costs from the predetermined standard is recorded as a
variance.
Average costing: A costing method which can be used to cost transactions in both inventory
only and manufacturing (inventory and work in process) environments. As you perform
transactions, the system uses the transaction price or cost and automatically recalculates the
average unit cost of your items.
LIFO costing: Costing method where it is assumed that items that were received most recently
are transacted first.
FIFO costing: Costing method where it is assumed that items that were received earliest are
transacted first.

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Costing Parameters

Revision, Lot, Serial, and LPN Parameters


You determine the starting revision for all items in the organization when you define your
inventory organization. You can also choose to set lot control and serial control parameters at
the organization level. Revision control is discussed in the Defining and Maintaining Items
module. Lot control and serial control is discussed in the Lot and Serial Control module.
LPN Generation Options
If you have Oracle Warehouse Management installed, and you are working with a Warehouse
Management enabled organization, you can define License Plate Number (LPN) Generating
Options. LPNs must be unique across organizations. Setting the parameters on the Revision,
Lot, Serial, And LPN tab enables the system to generate LPNs on demand, or through a
concurrent request. As long as the number is unique, Oracle Warehouse Management also
enables you to generate your own LPNs.

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Revision, Lot, Serial, and License Plate Number (LPN)


Parameters

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ATP, Pick, Item-Sourcing Parameters

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Interorganization Parameters

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Other Account Parameters

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Warehouse Management Parameters


For more information about Oracle Warehouse Management Organization Parameters see the
Oracle Warehouse Management Implementation Guide.

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Warehouse Management Parameters

What Is a Subinventory?
A subinventory is a physical or logical grouping of inventory such as raw material, finished
goods, defective material, or a freezer compartment. A subinventory can be the primary place
where items are physically stocked. You must specify a subinventory for every inventory
transaction.

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What Is a Subinventory?

What Is a Subinventory (continued)


For more information about subinventories, Defining Subinventories, Oracle Inventory Users
Guide.
Note: Types of subinventories other than Storage matter only in WMS. You can't have a
receiving subinventory unless you're using MSCA or WMS e.g. you can receive material on
the dock and can place it in a receiving subinventory (quantity is not reflected in on-hand)
before you transfer it to a putaway location. There can be many receiving subinventories in the
receiving area of a warehouse. Refer to Oracle Warehouse Management User Guide for more
info.

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What Is a Subinventory

Defining Subinventories
You define subinventories by organization. Each subinventory must contain the following
information:
Unique alphanumeric name
Status
Cost Group (if you have Oracle Warehouse Management installed)
Parameters
Lead times
Sourcing information
Account information
For more information about subinventories see Defining Subinventories, Oracle Inventory
Users Guide

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Defining Subinventories

Locator Control
Locators are structures within subinventories. Locators are the third level in the enterprise
structuring scheme of Oracle Inventory. Locators may represent rows, aisles, or bins in
warehouses. You can transact items into and out of locators. You can restrict the life of
locators, establish capacity of a specific locator in weight or units, as well as specify
dimensions which define a locators capacity by volume.
In coordination with locator settings at the subinventory and item level, you must first specify
locator controls at the Organization level:
None: Inventory transactions within this organization do not require locator information.
Prespecified only: Inventory transactions within this organization require a valid,
predefined locator for each item.
Dynamic entry allowed: Inventory transactions within this organization require a locator
for each item. You 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
you define at the subinventory level.

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Locator Control

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Dynamic and Static Locators

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Subinventory-Locator Relationship
You can structure Oracle Inventory in such a way that some of the subinventories and items
have locator control while others do not. If locator control is turned on at the item level, you
must specify a locator when transacting the item into or out of a subinventory. If locator
control is turned on at the subinventory level, you must specify a locator when transacting any
item into or out of that subinventory. Each stock locator you define must belong to a
subinventory, and each subinventory can have multiple stock locators. The possible locator
control types are:
None
Prespecified
Dynamic entry
Item Level
You cannot use the same locator names within any two subinventories within the same
organization.
For more information about setting up locator control see Defining Stock Locators, Oracle
Inventory Users Guide.
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Subinventory-Locator Relationship

Locator Flexfield Structure


Locator flexfield structure is common across all organizations. For Example if you set up Row
1A Rack 1A and Bin 1A in M1 Seattle, you cannot use Aisle 1A Rack 1A and Bay1A structure
in M2 Boston.
For more information see the Oracle Applications Flexfields Guide.

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Locator Flexfield Structure

Interorganization Shipping Networks


An interorganization shipping network describes the relationships and accounting information
between a shipping organization and a destination organization. You must define a shipping
network between two organizations before you can transfer material between organizations.
When you setup a shipping network you must select a transfer type. The choices are intransit or
direct. If you choose intransit, Oracle Inventory moves material to an intermediary state before
it reaches the destination organization, and a receipt transaction is required in the destination
organization once the material arrives in order to retrieve it. If you choose direct, Oracle
Inventory moves the material directly to the destination organization. However, for both, you
can determine default receipt routing and whether internal orders are required to transfer
material.
If you choose intransit as the transfer type you can determine:
Shipping methods
GL accounts to use in transit
Material ownership during transfers

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Interorganization Shipping Networks

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Planning lead-times
Transfer charges
For more information see Interorganization Shipping Network, Oracle Inventory Users Guide.

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Shipping Method
Shipping methods are the way you ship material. When you create a shipping method, you
must enable it before you can use it in a shipping network. If you disable a shipping method
you cannot use it in a shipping network.

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Shipping Method

Additional Set Up Steps


Entering Employees
Employees who perform cycle and physical inventory counts.
Defining Planners
Identify persons responsible for planning items or groups of items.
Defining Freight Carriers
Enables assignment of a general ledger account to one or more carriers to collect costs
associated with their use. You can assign a carrier to each interorganization transfer.

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Additional Set Up Steps

Additional Organizational Setups


Material Shortage Parameters
Define the parameters for the system to determine when unsatisfied demand exceeds available
quantity of incoming supply. This condition can be used by the system to trigger shortage
alerts and notifications.
Organization Access
This controls access to organizations based on the user responsibility assigned to a user by the
system administrator.
When implemented for one user responsibility, it is then required for all other user
responsibilities accessing the same organization.

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Additional Organizational Setups

Copying Inventory Organizations


You can create new inventory organizations or copy an existing organization. You must
establish a model organization to use as a baseline for new organizations. This model
organization must be a transactional organization and not an item master organization. You can
copy only organizations within the same operating unit. The system creates the new
organizations under the same business group to which the model organization belongs, and
assigns the new organizations to the same operating unit, legal entity, and ledger as the model
organization.
When you copy organizations you specify which information to copy from the model
organization. You can choose to copy the following information from the model organization:
Organization definition
Shipping networks
Hierarchy assignments
Bills of material and bills of material parameters
Departments, resources, and routings
Item information
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Copying Inventory Organizations

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When you copy a model organization the system automatically copies the following
information:
Subinventories
Locators
Work in Process parameters
Work in Process accounting classes
Planning parameters
Shipping parameters
Note: The system does not copy organization-specific data including: cost type, cost subelement, Process Manufacturing Enabled, Oracle Warehouse Management enabled, and costsharing entities.
For more information about copying inventory organizations see Copy Inventory Organization
Implementation Guide.

Organization Hierarchy
Organization hierarchies enable you to group together organizations and perform operations
across all organizations within a hierarchy. You can perform the following operations across
all organizations within an organization hierarchy:
Assign items to organizations: You can assign an item to any organization that belongs
to the same master organization within the same hierarchy. You can also assign a range of
items or item categories to a single organization, as well as a range of items or categories
to multiple organizations.
Copy item attributes: You can manage item attributes for many organizations in one
place. You can verify that an item or group of items were set up correctly, copy
organization-level item attributes from one item to other organizations that use the item,
and copy item attributes from one item to another within an organization.
View item information: You can view on-hand quantity information as well as item
where used information for organizations.
Open and close accounting periods: You can open and close accounting periods.
Purge transactions: You can purge transactions.

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Process transactions with the Inventory Transaction Open Interface: You can use the
Inventory Transaction Open Interface to review, submit, or cancel transactions.
Manage bills of materials: You can create common bills of material for organizations as
well as delete items, bills, components, routings, and operations.
Manage engineering change orders: You can automatically implement as well as make
changes to engineering change orders.

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Implementation Considerations
When you set up your organizations you need to determine the organization type. For example,
you need to determine if the organization is a process or a discrete organization and if you are
using Oracle Warehouse Management. You can use Oracle Warehouse Management and
Oracle Process Management in the same organization. You should not however, use Oracle
Asset Management with Oracle Warehouse Management or Oracle Process Execution. If you
plan on using Oracle Warehouse Management you need to determine if you are going to use
the Warehouse Control system. If this organization transacts business with Japan, Taiwan, or
Korea you can enable Chargeable Subcontracting for the organization. You must consider all
of this information before you create items or process transactions.

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Summary

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Chapter 3

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Objectives

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Unit of Measure
You define units of measure for tracking, moving, storing, and counting items.
Primary Unit of Measure
When you define an item you establish a primary unit of measure. The system tracks on-hand
quantity and calculates transactions based on the primary unit of measure.
Secondary Unit of Measure
You can optionally establish a secondary unit of measure (dual unit of measure control) for an
item. Secondary unit of measure can be used for cases where you need to track in two units of
measure and there is no constant conversion between the two unit of measures (UOMs). For
example, chickens can be tracked in pounds and eaches.
If an item is under dual unit of measure control the system tracks on-hand quantity based on
both the primary and secondary units of measure. For example, you can track an item in both
eaches and liters.

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Units of Measure

Uses of Units of Measure


Planning Products
- Forecasting and consumption
- Master scheduling
- Material requirements planning
Work in Process
- Shop floor moves
- Resource transaction
- Completion and return transactions
- Inquiries and reports
Bills of Material and Engineering
- Defining bills of material
- Defining engineering items

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Uses of Units of Measure

Unit of Measure Class


Unit of measure classes represent groups of units of measure with similar characteristics. A
unit of measure class contains a base unit of measure. You use the base unit of measure to
perform conversions between units of measure in the class. For this reason, the base unit of
measure should represent the other units of measure in the class, and be one of the smaller
units. For example, quantity is a unit of measure class and each, dozen, and gross are examples
of units of measure within the class. The unit of measure each is the base unit of measure for
this class.

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Unit of Measure Class

Units of Measure Conversions


A unit of measure conversion is a mathematical relationship between two different units of
measure. For example, 16 ounces = 1 pound, or 2.2 pounds = 1 kilogram. If you want to
transact items in units of measure belonging to classes other than their primary UOM class,
you must define conversions between the base units of measure in different UOM classes.

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Unit of Measure Conversions

Lot-Level Unit of Measure Conversions


Lot specific conversions enable you to perform a specific inter-class conversion for a given lot.
This enables you to establish more granular control over the transactional quantities of a lot.
For example, the standard inter-class conversion for a lot controlled item is one gallon equals
15 pounds; however, when you receive a particular lot of the item, 1 gallon equals 16 pounds.
You can create a lot specific unit of measure for this instance.
You can create lot-specific unit of measure conversions for on-hand lots or lots with a zero
balance. If you create a lot-specific conversion for a lot with on-hand quantities, you can
automatically update the quantities in the system to more accurately reflect the on-hand
quantity.

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Units of Measure Setup

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Unit of Measure Reports

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Organization Parameter Setup


If you set the Auto Create Lot UOM Conversion parameter to Yes or User confirmation, then
the system automatically creates lot-specific unit of measure conversions for items under dual
unit of measure control across the organization. The system bases the conversion on lot
quantities that you receive in the transactional unit of measure, and creates a conversion
between the transactional unit of measure and the secondary unit of measure.

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Organization Parameter Setup

Implementation Considerations
You can use a maximum of five decimal places for an individual unit of measure within
Oracle Inventory.
Note: Inventory transactions and on hand balance supports decimal precision to 5 digits
after the decimal point. Oracle Work in Process supports decimal precision to 6 digits.
Other Oracle Applications support different decimal precision. As a result of the decimal
precision mismatch, transactions another Oracle Application passes may be rounded when
processed by Inventory. If the transaction quantity is rounded to zero, Inventory does not
process the transaction. It is therefore suggested that the base unit of measure for an item
is set up such that transaction quantities in the base unit of measure not require greater
than 5 digits of decimal precision. For example, in some industries such as the gold
jewellery industry, you may need a more granular level of control than 5 decimal places.
You need to carefully determine the base unit of measure for each unit of measure class.
Primary units of measure cannot be changed on items after they are saved.

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Summary

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Chapter 4

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R12 Defining and Maintaining


Items Fundamentals

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R12 Defining and Maintaining Items Fundamentals

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Objective

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What Is an Item?
An item is a part or service you:
Purchase
Sell
Plan
Manufacture
Stock
Distribute
Prototype
Items can also be containers for items as well as components you build into other items.

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What is an Item?

Steps to Define and Maintain Items


The following are the steps for creating and maintaining items:
Define Inventory organization.
Create the item templates.
Use the templates or existing items to define items.
Enter values for additional item attributes.
Assign a status to the item.
Enable the item in organizations.
Update the organizational-level attributes values.
Assign categories to the item (optional)
Assign items to catalog groups (optional)
Define item relationships (optional)
Delete items (optional)

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Steps to Setup, Define, and Maintain Items

Defining Items
Define only the information you need to maintain the item. You cannot define an item at the
organization level. Oracle Inventory automatically switches to the Master Item window when
you define a new item.

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Defining Items

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Defining Items

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Item Master Organization


An item master organization is a logical entity that you use to define items. You use the other
organizations to store and transact inventory. After you define an item in the item master, you
can assign it to any number of other organizations.
There is no functional or technical difference between the item master organization and other
organizations; however, it is recommended that you limit the item master to an item definition
organization.
You should also define one item master organization per implementation. You can use the
same item master for child organizations across different ledgers. Item masters are distinct
entities with no relationship to each other. You cannot associate items in one item master
organization with another item master organization. You cannot copy items across item master
organizations.

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Item Master Organization

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Defining the Item Master Organization


You create the item master organization in the same way that you create other inventory
organizations.
You use the Organization window to create the item master organization
Use the Organization Parameters window to specify the organization as the Item Master.
You assign child organizations to the item master organization.
- Note that the item master uses itself as its item master.

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Item Master
Always define items in the master organization. When you define an item, Oracle
automatically changes your current organization to the master organization. You may enable
your new items in as many child organizations as needed.

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Item Master

Item Attributes
Item attributes are the collection of information about an item.

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Item Attributes

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Item Attribute Groups

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Item Status
You can use statuses to provide default values for certain item attributes to control the
functionality of an item. The Item Status attribute has a defined set of yes or no values for the
status attributes. You apply the values to the status attributes when you choose an item status
code when you define an item. For example, in the beginning of a product development cycle
you set the Item Status attribute to Prototype with all of the status attributes defaulted to yes
except for Customer Orders Enabled. When the item is ready, you change the Item Status
attribute to Active to enable all item functions.
You can assign one or more pending statuses for an item, to be implemented on future dates.
These statuses become effective on their assigned effective dates. You can view the status
history of an item if needed.

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Item Status

Unit of Measure Attributes


You use the units of measure attributes to track your items in the warehouse. The following are
the unit of measure attributes and their definitions:
Primary Unit of Measure: This is the stocking and selling unit of measure. Any
necessary conversions are based on this unit of measure. The primary unit of measure is
the default for invoices and credit memos entered in Oracle Receivables.
Tracking: The system can track the item in either the primary only or the primary and
secondary unit of measure. If the system tracks the item by the primary and secondary unit
of measure this is called dual unit of measure control.
Pricing: This attribute controls if pricing is based on the primary or secondary unit of
measure
Defaulting: This attribute controls the behavior of dual unit of measure controlled items.
- Fixed: The system stores inventory in both the primary and secondary units of
measure. You can enter an item quantity in one unit of measure, and the system
converts the quantity to the secondary unit of measure and displays both quantities
- Default: The system stores inventory in both the primary and secondary units of
measure. You can enter an item quantity in one unit of measure, and the system
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converts the quantity to the second unit of measure and displays both quantities. You
can change the quantity in the secondary unit of measure, without changing the
quantity in the primary unit of measure.
- No Default: The system stores inventory in both the primary and secondary units of
measure. Use this option when the default conversion between the two units of
measure is usually not the same. The system does not automatically display in the
secondary unit of measure when you specify the quantity for the primary unit of
measure. You manually enter the quantity of the secondary unit of measure before
you process a transaction. The secondary quantity can fluctuate from the default
conversion by the factors that you specify in the Deviation + and Deviation attributes.

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Item Statuses and Attributes


You define an item status by selecting the value check boxes for the status attribute. You can
control status attributes and item status at the item level or organization level.

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Status Attributes and Functionality

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Status Attribute Interdependencies

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Status Attribute Interdependencies

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Item Attribute Relationships


Required Attributes
You must enter a value for the attribute based on the settings for other related attributes.
Interdependent Attributes
You can only enter certain values depending on other attribute values.
Updateable Attributes
You can update values under certain conditions.
Control Level Dependencies
You can update the control level of some attributes only under special conditions and with
certain consequences.

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Item Attribute Relationships

Item Templates
Oracle Inventory has several predefined templates that you can use to define and update items
or you can create your own templates.
If you regularly define many items that share the same values for a number of attributes, you
may want to define item templates. You can only use copy once when you define an item. You
can predefine templates with relatively few attributes enabled because you can apply more than
one template to define one item.
Attributes in Templates
You can enable attributes and assign them values in each template that you create. When you
apply a template to an item, Oracle Inventory updates only the attributes that are enabled for
the template. The order in which templates are applied is extremely important.
Further Item Templates Help
For more information about item templates see Item Templates, Oracle Inventory Users
Guide.

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Item Templates

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Creating Item Templates

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Enabling Attributes in a Template

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Organization Assignment and Organization Items


You can enable an item in all child organizations under your master organization or choose
child organizations where you use the item. Oracle Inventory propagates the item to all
organizations in which you want to enable it. You can enter or change organization-controlled
item attributes. For example, you can choose reorder point planning in one organization and
min-max planning in another organization for the same item.

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Organization Assignment and Organization Items

Control Levels
Master-Level Control
An attribute you maintain at the master level has identical values across all organizations that
use the item.
Organization-Level Control
An attribute you maintain at the organization level may have different values for each
organization that uses it.
Attribute Control
Some attributes can be maintained at only the master level or the organizational Level. Units of
measure are controlled at the master level. If you are using multiple organizations, then you
should maintain min-max planning at the organization level.
Technical Note
Master-Level Control
For example, suppose you want to ensure that items defined in two organizations are
transactable at the same time in both organizations. If you make the item not transactable

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Control Levels

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in one organization, you want the same item to become not transactable in the other
organization.
Organization-Level Control
Suppose only one of the two organizations in your Oracle Inventory implementation
performs manufacturing operations, while the other organization is strictly a distribution
warehouse.
For a finished good item used in both organizations, you would want the flexibility to
select the Build in WIP status attribute check box in the manufacturing organization, and
clear the Build in WIP status attribute check box in the distribution organization.

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Revision Control
A revision is a particular version of an item, bill of material, or routing. Use the revision
control to track item quantities by item revision and specify a revision for each material
transaction.
Enable revision control for items you must track version changes or changes that are
significant enough to track but do not affect the function and feature of the item.
You cannot change the revision control item attribute when an item has quantity on hand. If
revision control is controlled at the Master Item level, the check for on-hand quantity is against
the sum of on-hand quantity in all child organizations. If revision control is controlled at the
organizational level, the check for on-hand quantity is against the sum of on-hand quantity in
that organization.
Use letters, numbers, and characters such as A, A1, 2B, and so on to define revision numbers.
Letters are always in upper case and numbers may include decimals. To ensure revisions sort
properly, decimals should always be followed by a number. Revisions are sorted according to

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Revision Control

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ASCII rules, therefore each revision must be greater than the previous revision. For example,
you cannot use revision 10 after revision 9 because, according to ASCII sorting, 10 precedes 9.
For more information about setting up Revision Control, see Defining Item Revisions, Oracle
Inventory Users Guide

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Restricting Items to Subinventories


You can assign items to a given subinventory. Assigning items to a subinventory does not
restrict the subinventory to that list of items. Rather, the items are restricted to that
subinventory. Thus, you can always issue and receive unrestricted items to any subinventory,
but you can only issue and receive restricted items to those particular subinventories. You
activate the list of subinventories for a restricted item when you set the Restrict Subinventories
attribute. You also use the item-subinventory relationship to specify valid subinventories for
zero quantity cycle counts for an item, and to specify items for an ABC analysis performed at
the subinventory level. In these cases you do not have to set the Restrict Subinventories
attribute, only establish the relationship between the item and subinventory.

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Restricting Items to Subinventories

Item Relationships
You can define relationships between items. This allows you to search for items through these
relationships. Except in Oracle Purchasing, these relationships are for inquiry and reporting
purposes only. For example, you can create an item relationship for substitute items or items
for which you can up-sell.

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Item Relationships

Categories and Category Sets


A category is a logical classification of items that have similar characteristics. A category set is
a distinct grouping scheme and consists of categories. You can define an unlimited number of
categories and group subsets of your categories into category sets. A category can belong to
multiple category sets. You can assign a category to a category set either at the time you define
a category set or at the time you assign an item to the category.
Default Category Sets
When you install Oracle Inventory, you must assign a default category set to each of the
following functional areas: Inventory, Purchasing, Order Management, Costing, Engineering,
and Planning. Product Line Accounting is seeded with the Inventory category set. Oracle
Inventory makes the default category set mandatory for all items defined for use by a
functional area. If your item is enabled for a particular functional area you cannot delete the
item's corresponding default category set assignment. Default category sets are required so that
each functional area has at least one category set that contains all items in that functional area.

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Categories and Category Sets

Assigning Items to Categories


When you enable an item in a functional area, the item is assigned to the default (mandatory)
category set and default category of the functional area. You can override the category set's
default category. In addition, you can manually assign your item to an unlimited number of
category sets. You may optionally assign an item to more than one category within a category
set based on the category set definition.

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Assigning Items to Categories

Item Catalogs
To define your catalog, you set up as many distinct item catalog groups as you need to partition
your Item Master. Each group has unique characteristics (called a descriptive element) that
completely describe items belonging to the group. When you assign an item to an item catalog
group, you define values for the descriptive elements that apply to your item. For example, an
item catalog group called mug could have a descriptive element called material. Possible
values for material might be glass or ceramic.
Descriptive Elements
You can define any number of descriptive elements for an item catalog group. You can also
describe whether the descriptive element is required at item definition, and whether the
descriptive element value is included by default in the item catalog description. Descriptive
element values can be concatenated and used to create an item's description. You turn this
feature off or on for each descriptive element in a catalog group. Turn Description Default on
for any element you want included in a concatenated description. You create a concatenated
description when assign an item to an item catalog group.

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Item Catalogs

Deletions Constraints and Deletion Groups


You cannot delete an item if you have on-hand quantity or have performed any type of action
on the item.

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Deletion Constraints and Deletion Groups

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Deletion Constraints

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Deletion Constraints

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Item Reports

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Item Reports

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Item Reports

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Profile Options

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Implementation Considerations
You should set all costing attributes at the organizational level because costing is most
commonly done at organizational level. WIP requires costing at org level to set up WIP
accounting classes. Costing of individual items is specific to individual organizations because
of location and other considerations.
Costing Method
Costing method is chosen and set at the inventory organization level. Within a ledger (set of
books), an enterprise can have multiple cost methods specified at each organization level. For
example, a company may have one average cost org and one standard cost org. Available
costing methods are as follows:
Standard
Average
FIFO
LIFO

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Implementation Considerations

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Implementation Considerations

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Summary

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Chapter 5

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R12 Lot and Serial Control

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R12 Lot and Serial Control

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Objective

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Lot Control Overview


A lot can represent a quantity of an item that shares the same specifications, one or more
receipts from the same vendor, or whatever you choose. You can divide each lot into child lots
that can reflect whatever characteristics you choose for items within the lot. For example, you
may divide a lot of items from a supplier into child lots to reflect differences in quality
specifications. When you allocate stock for production, you can allocate specific lots to a
production batch based on the potency, age, or other item characteristics. Oracle Inventory
provides complete lot number support for inventory transactions. You can enable lot control
for specific items in your inventory. For items under lot control, you assign lot numbers to each
receipt, and thereafter reference the same lots each time you perform material transactions.
This enables you to have tight control over lot controlled items in your inventory.
All of the material produced in a manufacturing batch may be assigned a lot number. For
example, you can create a manufacturing batch of penicillin and assign it parent lot number
A100. You can then use parent lot A100 to create child lot A100_01 to make pills, child lot
A100_02 to create emulsion, and child lot A100_03 to create capsules. Each child lot has the
same ingredients as the original parent lot A100, but they are in a different format.

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Lot Control Overview

Child Lots
A child lot is a subdivision of a lot that you can use if you produce a lot over a period of time,
but still want to group the material as a single lot. Using a child lot maintains the integrity of
the lot, but enables you to consume it in manageable pieces. When you process transactions for
material under child lot control, you enter the child lot as the lot number. The system also
maintains a genealogy relationship between the parent lot and the child lot.

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Child Lots

Setting up Lot Control


Organization Parameters
You use the Organization Parameters window to specify whether lot numbers should be unique
for an item. If you do not establish lot number uniqueness, you can assign the same lot number
to multiple items in the same organization and across organizations. If you control lot number
uniqueness at the item level, you can assign a specific lot number only to one item in the same
organization and across organizations. When you perform transactions, Oracle Inventory
checks the lot number uniqueness control to generate lot number defaults.
You use the Organization Parameters window to specify how to generate lot number defaults.
You can generate sequential lot numbers based on an alphanumeric prefix that you specify
when you define an item. Oracle Inventory can also generate lot number defaults for the entire
organization. In this case, you must define a lot number prefix at the Organization level in the
Organization Parameters window.
If you do not want Oracle Inventory to automatically generate lot number defaults for you, you
can enter your own lot numbers when you receive items. You can always override lot number
defaults. For more information See Defining Organization Parameters, Oracle Inventory User's
Guide.
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Setting up Lot Control (Organization Parameters)

Lot Number Uniqueness


You use the Organization Parameters window to specify whether lot numbers should be unique
for an item. If you do not establish lot number uniqueness, you can assign the same lot number
to multiple items in the same organization and across organizations. If you set lot number
uniqueness to Across Items, you can assign a specific lot number only to a single item. When
you perform transactions, Oracle Inventory checks the lot number uniqueness control to
generate lot number defaults.

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Lot Number Uniqueness

Setting up Lot Control


Item Attributes
You can establish lot control for an item when you define it. You can select either No control
or Full control. If you choose Full Control, then you must assign lot numbers when you receive
the item into inventory. Thereafter, when you transact the item, you must provide a lot number
that you specified when you received the item.
You can update lot control options for an item if it has zero on hand quantity. In addition, you
cannot change lot control when open internal orders or inter-org intransit shipments exist. A lot
number is a combination of an alphanumeric prefix and a numeric suffix. When you define an
item, you can specify the starting lot prefix and the starting lot number. Oracle Inventory uses
this information to generate defaults during transaction entry.
Shelf Life Days
Shelf life is the amount of time that an item can reside in inventory before it expires. When
defining items under lot control, you can choose no control, a certain number of item shelf life
days from the date that you receive the item, or a user-defined expiration date for each lot. The
system does not consider the expired lot as on-hand supply when it performs min-max, reorder

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point, or MRP planning calculations. You also cannot reserve an expired lot. See Oracle
Inventory User's Guide Inventory Attribute Group control.
Grade Control
A grade is a rating that you assign to an item lot for quality control purposes. Grades are
usually based on criteria such as color, size, or quality of the lot. For example, the grade of a
lot of paint could be excellent, average, or poor. A grade is a characteristic of an item lot, and
never a lot location.

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Managing Lots
Assigning Lot Numbers
You must assign lot numbers when you receive items under lot control. You can also add
quantities to existing lot numbers and split an inventory receipt into several lots, if necessary.
Oracle Inventory uses the default lot number generation method that you entered in the
Organization Parameters window to determine lot numbers so the Lot Prefix and Starting
Number can be generated from either an Organization or Item-specific Prefix, based on the
Organization Parameters setting. Alternatively, if the setting is *User-Defined*, then the
Operator must 'manually' ENTER or SCAN the Lot Number.
If the item is under user-defined expiration date Lot Expiration (shelf life) Control, you must
specify the expiration date for the lot.
You can either use the lot master to generate new lot numbers or assign lot numbers when you
perform transactions. When you create the lot, the system determines the lot origination type. If
you create the lot on the lot master, the origination type is lot master. If you generate the lot
while performing a transaction, the origination type is Inventory. See Item Lots and Assigning
Lots Within Transactions, Oracle Inventory Users Guide for more information.

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Managing Lots

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Maintaining Lot Information


You can update the expiration date of lots for items under lot expiration (shelflife) control.
You can view all lots that you created in your current organization and the supplier lot
information that is associated with the lots.

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Expired Lots
You can assign lot control shelf life days, or enter a lot expiration date to determine when a lot
expires. The expiration date controls the availability of the lot for transacting and planning
purposes. An expired lot:
Is not considered as on-hand supply when you are performing min-max, reorder point, or
MRP planning calculations.
Cannot be reserved for a date beyond the expiration date.
Can be transacted and is included in on-hand quantities.
Is included in all inquiries and reports, including inventory valuation reports
Is included in a cycle count and count entry and adjustments are allowed
Is included in a physical inventory and tag entry and adjustments are allowed
Lot Expiration Action
A lot expiration action is the action that you perform on a lot when it expires. You can assign a
default lot expiration to an item on the Item Master or when you generate a lot. To associate a
lot expiration action with a lot, you must define shelf life days for the item.

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Expired Lots

Disabled Lots
Disabling a lot only prevents it from appearing in a list of values when you are performing
receipt transactions. If you type in the lot number, it is valid and accepted even though it was
not in the list of values. Disabling is used only for tailoring this specific instance of the list of
values for lot numbers. A disabled lot:
Is included in available to transact, available to promise, and available to reserve
calculations
Is included as on-hand supply when you are performing min-max, reorder point or MRP
planning calculations
Is included as on-hand in all inquiries and reports, including inventory valuation report
Can be transacted with Inventory functions and the Transaction Open Interface
Can be reserved

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Disabled Lots

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Lot Number Purging

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Cycle Counts Under Lot Control

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Physical Inventory Under Lot Control

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Serial Numbers Overview


A serial number is an alphanumeric piece of information you assign to an individual unit of an
item. You use serial numbers to track individual item units. Serial number control is a system
technique for enforcing the use of serial numbers during a material transaction. You can use
serial numbers to track items over which you want to maintain very tight control. One serial
number is assigned to each unit of an item.
For more information on setting up serial number control, refer to the online help:
(Help) Oracle Manufacturing Applications > Oracle Inventory > Items > Lot and Serial
Number Control > Setting Up Serial Number Control

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Serial Number Overview

Serial Number Generation


How you set up serial number control at the master item level determines serial number
generation. If you specify No Control as the serial number control type, then the system does
not enforce serial number control. If you specify Predefined as the serial number control type,
then you must predefine serial numbers for that item. If you select At inventory receipt or At
sales order issue, then you can optionally predefine serial numbers for the item.
Oracle Inventory uses the starting serial number prefix and the starting serial number you
specify in the Item window to load the number of predefined serial numbers you request. You
can load as many serial numbers as you want for any item under serial number control.
The process of generating serial numbers is done through a concurrent report. This process
does not assign numbers to units in inventory, it simply reserves specific serial numbers for an
item for later use.
For more information on setting up serial number control, refer to the online help:
(Help) Oracle Manufacturing Applications > Oracle Inventory > Items > Lot and Serial
Number Control > Setting Up Serial Number Control

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Generating Serial Numbers

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Note: Prefix and Starting Number can be Organization or Item-specific and is determined at
the Serial Control Generation Setting on the Organization Parameters. Alternatively, they can
also be User-Defined. If the Setting is *User-Defined* then the Operator must 'manually'
ENTER or SCAN the Serial Number. The system will not generate the Serial number.

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Serial Uniqueness
You use the Organization Parameters window to choose a type of serial number uniqueness for
your organization. You can choose to enforce uniqueness Within inventory items, Within an
organization, or Across organizations. The three levels for serial uniqueness are cumulative,
and the definitions are as follows:
Within Inventory Items: Once you assign a serial number to a particular item you cannot
assign the same serial number to the same item regardless of the organization. For
example if you assign serial number SN100 to item A, you cannot assign serial number
SN100 to any other instance of item A in any organization. This also includes CTO items
derived from base model A. However you could receive item B with serial number SN100
in any organization.
Within an Organization: In addition to the Within Inventory Items restrictions, the same
serial number cannot exist twice within the same organization. For example, if you assign
SN100 to item A, you cannot receive item B with the serial number SN100 in the same
organization. You can, however, receive item B with the serial number SN100 in any
other organization.

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Serial Uniqueness

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Across Organizations: In addition to the Within an Organization restrictions, you cannot


assign the same serial number to any other item regardless of the organization. For
example if you assign SN100 to item A you cannot receive item B with the serial number
SN100 in any organization. In this example SN101 and SN100 belong to different
organizations. If you assign Across Organizations uniqueness to any organization it
restricts the serial generation in all other organizations. If one organization dictates Across
Organizations, all other organizations must do so.

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Maintaining Serial Numbers

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Lot Genealogy
Lot genealogy tracks the relationship between lots and provides lot traceability that results
from inventory transactions. This includes all lot splits, merges, and translations. Lot
genealogy also enables you to view where a particular lot is used. For example, one of your
suppliers informs you that they supplied you with contaminated sugar, which needs to be
recalled, and you used this sugar as an ingredient in the production of orange juice. You can
use lot genealogy to find each lot of orange juice that contain the contaminated lots of sugar.
You can use lot genealogy to view the work order details for a WIP job, material and pending
transactions, and quality results for both WIP jobs and process batches. Oracle Process
Manufacturing does not support serial numbers or serial genealogy.

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Lot Genealogy

Serial Genealogy
Serial genealogy tracks the transaction and multilevel composition history of any serialcontrolled item from receipt to customer sale. The composition genealogy is captured through
material transactions in Oracle Work in Process and Oracle Process Manufacturing. The serial
genealogy appears in a graphical display, and you can trace an assembly down through all of
its components or from the component to an assembly. This genealogy tracing enables you to
expedite problem isolation and improve customer response times. Serial genealogy also helps
you to track and regulate supplier performance and quality.
You can view the transaction history of the serial across all organizations within an operating
unit and view the current organization where the serial resides. When issuing serialized
components to serial controlled assemblies, you must associate the component serial number
with the assembly serial number. If the component has a supply type of Push, the association
occurs at WIP Issue. If the component has a supply type of Operation Pull, the association
occurs at WIP Move. If the component has a supply type of Assembly Pull, the association
occurs at WIP Completion. If the item is under lot control, then you can also view the lot
genealogy for the same item. When you view the genealogy of the item, the system lists the
item number, followed by the lot number, and finally the serial number.

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Serial Genealogy

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Lot and Serial Reports

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Lot and Serial Reports

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Lot and Serial Reports

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Profile Options

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Profile Options

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Implementation Considerations

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Implementation Considerations

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Summary

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Chapter 6

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R12 Transaction Setup

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R12 Transaction Setup

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Objectives

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Transactions
A transaction is an item movement into, within, or out of inventory. A transaction changes the
quantity, location, planning responsibility, or cost of an item. Oracle Inventory supports a
number of predefined and user-defined transaction types. Every material movement has a
corresponding set of accounting transactions that Oracle Inventory automatically generates. All
transactions validate the various controls (revision, locator, lot, dual unit of measure, and serial
number) you enable for your items.
For more information about transaction see Overview of Inventory Transactions, Oracle
Inventory Users Guide.

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Overview

Inventory Transactions
Inventory transactions enable you to:
Receive items into your organization.
Issue items out of your organization.
Transfer items from one subinventory in your organization to another subinventory in the
same organization
Transfer items between organizations

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Inventory Transactions

Move Orders
Move orders are requests for the movement of material within a single organization. They
formalize the process to request the movement of material within a warehouse or facility for
purposes like replenishment, material storage relocations, and quality handling. Move orders
are generated manually or automatically depending on the source type. To request a material
transfer between organizations requires an internal requisition.
Move Order Requisitions
A move order requisition is a manually generated request for a move order. It is available for
subinventory transfers and account transfers. Once a requisition has been approved, it becomes
a move order. These requests can optionally go through a workflow-based approval process
before becoming move orders. For more information about move order requisitions see
Generating Move Order Requisitions, Oracle Inventory Users Guide.

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Move Orders

Transaction Source Type


Oracle Inventory uses a transaction source type with a transaction action to uniquely identify
the type of transaction performed. You can define additional source types. Predefined
transaction types are as follows:
Purchase Order
Account Alias
Account
Move Order
Internal Order
Standard Cost Update
Internal Requisition
Sales Order
Cycle Count
Periodic Cost Update
Physical Inventory
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Transaction Source Types

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RMA (Return Material Authorization)


Inventory
Job or Schedule
External Requisition
Layer Cost Update
Project Contract
When you perform a transaction, you specify a transaction type and a source. For example, for
a PO receipt transaction, the transaction source type is Purchase Order and the actual PO
number is the source.

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Transaction Action
You use transaction actions with a source type. A transaction action identifies a transaction
type. Oracle Inventory provides the following transaction actions:
Issue from stores
Subinventory transfer
Direct organization transfer
Cycle count adjustment
Physical inventory adjustment
Intransit receipt
Intransit shipment
Cost update
Receipt into stores
Delivery adjustments
WIP scrap
Assembly completion
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Transaction Action

Assembly return
Negative component issue
Negative component return
Staging Transfer
Ownership Transfer
Logical Issue
Logical Delivery Adjustment
Retroactive Price Adjustment
Logical Receipt
Delivery Adjustment
Lot Split
Lot Merge
Lot Translate
Lot Update Quantity
Logical Expense Requisition Receipt
Planning Transfer
Ownership Transfer
Logical Intercompany Sales
Logical Intercompany Receipt
Logical Intercompany Receipt Return
Logical Intercompany Sales Return
Container Pack
Container Unpack
Container Split
Cost Group Transfer
Logical Intransit Receipt
Logical Intransit Shipment
Retroactive Price Update
Container Transaction
COGS Recognition
Residual Quantity Issue
Residual Quantity Return

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Transaction Reasons

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Transaction Types
A transaction type is the combination of a transaction source type and a transaction action. It 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. A number of transaction types are predefined in
Oracle Inventory. You can also create custom transaction types.
You use the Transaction Types window to define additional transaction types to customize
transaction entry. A user-defined transaction type is a combination of a user-defined
transaction source type and a predefined transaction action. For example, if you frequently
donate items to charity, you might want to define a transaction source type called charity and a
transaction type called Issue to Charity. In this case, the transaction action would be Issue from
Stores. You would then use the Miscellaneous Transactions window to actually issue an item
to charity, using the Issue to Charity transaction type. You would also specify the actual charity
to which you are issuing, such as Goodwill, and the expense account that specifies the source
Goodwill. For more information about transaction types see Transaction Types, Oracle
Inventory Users Guide.

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Transaction Types

Predefined Transaction Types


Oracle predefines transaction types in the system. The table in the slide contains a few
examples of predefined transaction types. For more information on Predefined Transaction
types see Transaction Types, Oracle Inventory Users Guide.

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Predefined Transaction Types

Transaction Managers
(N) > Setup > Transactions > Interface Managers.

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Transaction Managers

Running Transaction Managers


Cost Transaction Manager
The material cost transaction manager costs material transactions in Oracle Inventory and
Oracle Work in Process in the background.
Lot Move Transaction Manager
The resource cost transaction manager processes resource transactions in Oracle Work in
Process and resource transactions you import from barcode readers, payroll systems, time
cards, routing sheets, and custom data entry forms using the Open Resource Transaction
Interface.
Material Transaction Manager
The material transaction manager immediately executes a material transaction after you save
your changes in a transaction window. By starting the transaction manager, you can determine
how to execute transactions: immediately through immediate concurrent request submissions,
or through periodic concurrent request submissions. You define this transaction mode for
individual transaction windows in the Personal Profile Values window.

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Running Transaction Managers

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Move Transaction Manager


The move transaction manager processes move transactions in Oracle Work in Process and
move transactions you import from devices such as portable bar code readers or your custom
data entry forms using the Open Move Transaction Interface.

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Creating Picking Rules


You can create picking rules that enable you determine which material to pick and the order in
which material is picked for sales orders, process manufacturing batches, or work in process
jobs. Oracle Inventory reviews the picking criteria order and the options for each criterion. You
can create rules based on the following restrictions:
Lot shelf life days
Single lot - controls whether the system can allocate multiple lots for a particular demand
Partial lot controls whether the system can allocate quantities of a lot less than the total
lot quantity available
Customer specification matching to require quality specification matching
You can also create sort criteria which determines which material is picked first:
Lot
Revision
Subinventory
Locator

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Creating Picking Rules

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After you create a rule you assign it in the rules workbench. The rule that you created on the
Inventory Picking Rules page appears on the Rules Workbench. The system automatically
assigns a sequence number and return type to the rule. You can modify the sequence number,
but you cannot modify the return type. The return type is a strategy, rule, or value.
You can assign your rule to any combination of criteria the Rules Workbench displays. For
example, if you create a picking rule that allocates material by lot number in ascending order
followed by locator in ascending order, you can assign it to an item in the Rules Workbench.
This means for picking, the system allocates the lowest lot number of the item in the lowest
locator number where the item resides.

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Aliases
An account alias is an easily recognized name or label representing a general ledger account
number. You can view, report, and reserve against an account alias. During a transaction, you
can use the account alias instead of an account number to refer to the account.
You must create an inventory account alias for each GL account if you wish to use an alias for
that GL account in inventory transactions. Oracle Inventory does not honor GL account aliases.

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Account Aliases

Accounting Periods
Oracle Inventory uses accounting periods to group material and work in process transactions
for accounting purposes. An accounting period must be open for you to complete a transaction;
that is, the transaction date you enter must fall within the beginning and ending dates you
define for the period.
Closing Accounting Periods
You can close the earliest accounting period with a status of Open or Error. An automatic
general ledger transfer is processed when you close an accounting period.

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Accounting Periods

Material Shortage Alerts and Notifications


A material shortage occurs whenever outstanding demand exceeds the available quantity for
incoming supply. During a receipt transaction, Oracle Inventory checks to see if the material
received is needed elsewhere in the organization. If a shortage exists, the system notifies you
either by a realtime material shortage alert or a workflowbased notification. Set up shortage
parameters to enable the system to send material shortage alerts and notifications. For more
information see Defining Shortage Parameters, Oracle Inventory Users Guide.
The following receipt transaction windows can generate shortage alerts and notifications.
Receipts
Receiving Transactions
Miscellaneous Transactions
WIP Material Transactions
WIP Completions
WorkOrderless Completions - This occurs only if you have used workflow notification
for the transaction.

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Material Shortage Alerts and Notifications

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Shortage Alerts
The shortage alert appears in the window during the transaction with the option to go to the
View Potential Shortages form, showing where the shortage exists. Alerts are automatic once
they are set up. Notifications are optional and can be sent to a prespecified list of individuals.
Sources of Demand
When generating shortage alerts and notifications, the system considers one or more of the
following to be sources of demand:
WIP jobs
WIP schedules
Sales order lines that have been pick released and detailed but for which adequate quantity
was not sourced
Supply Types
The system considers the transaction types you select as supply for the unsatisfied demand.
Shortage alerts and notifications are triggered for system or user defined transaction types with
transaction actions of:
Receipt into stores
Intransit receipt
Direct organization transfer
Assembly completion
Negative component issue

Setting Up Shortage Alerts and Notifications


Define the shortage parameters the system will use to detect material shortages.
Define the transaction types that will trigger shortage alerts and notifications.
Define which items in the system will trigger a shortage alert or notification when they are
in demand.
Define the individuals to be notified.

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Setting Up Shortage Alerts and Notifications

Setting Up Move Orders


Subinventory Source Type
For Oracle Inventory to automatically create move orders when using minmax planning or
replenishment counting, you must define the subinventory source type at one of the following
levels:
Subinventory
Item
To automatically create move orders when using the kanban system, you must define the
subinventory source type at the pull sequence level.
Approval Process Parameters
Approval is required only for requisition move orders. Other move orders created by shipping
or replenishment processes are approved automatically. To require planner approval, you
define two parameters at the organization level:
Move Order Timeout Period
Move Order Timeout Action

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Setting Up for Move Orders

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You can also specify individuals to be notified if a shortage occurs. To bypass the approval
process and automatically approve move order requisitions, enter 0 days for the Move Order
Timeout Period and select Automatically Approve for the Move Order Timeout Action. The
approval process is also not enabled for organization items without an assigned planner.
Item Transaction Defaults
You can define the item transaction defaults to automatically populate the destination locator
on the move order line from an organization item.
(N) > Setup > Transactions > Item Transaction Defaults.
Move Order Time-Out
Use move order time-out if you want to require approvals for the move orders in your
organization.
Time-out Period
The length of time, in days, you will let your move orders sit in a pending-approval queuing
status.
The following rules apply when you set up time-outs:
After one time-out period, a reminder is sent to the approver.
After two time-out periods, the move order time-out action is performed.
The time-out action is either approved or rejected.
If the time-out period is 0, all move orders are automatically approved.
If the time-out period is left blank, the setting defaults to 0.

Setup Steps for Move Orders


Set Up Planner
Define a planner for the item in the General Planning tabbed region of the Items window.
Designate a Planner
You designate a planner in the Master Item window when you define an item. If you do not
designate a planner, the move order is automatically approved.
Notification List
When you approve or reject the move order, the system sends a courtesy e-mail to the
Engineering Change Order (ECO) approval list (which is used here as a notification list). It is
attached to the move order source and destination subinventory. You do not need to have
Oracle Engineering to use this feature.
Define Picking Rules
Move orders use the standard picking rules of Oracle Inventory to source material. In a WMS
organization, move orders use Oracle Warehouse Management picking rules.

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Setup Steps for Move Orders

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Locator Defaults
If a subinventory or item is locator controlled, when you create the move order receipts,
specify a destination locator. If you do not specify a destination locator, the allocating process
uses the item transaction default.
For more information see:
(Help) Oracle Manufacturing Applications > Oracle Inventory > Transactions > Overview of
Move Orders > Setting Up Move Orders

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Profile Options

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Implementation Considerations
Answer the following questions to determine which of the following demand sources should be
considered potential shortages.
Which inventory organizations should be checked for shortages?
Which type and statuses of WIP jobs/schedules should be checked for shortages?
Answer the following questions to determine the individuals and the method for delivering
shortage messages.
Should workflow alerts and notifications be generated when actual shortages exist?
Who should be notified?
How frequently should notifications be sent?

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Implementation Considerations for Shortage Checks

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Implementation Considerations for Move Orders

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Summary

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Chapter 7

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Module Objectives

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Transactions
A transaction is an item movement into, within, or out of inventory. A transaction changes the
quantity, location, planning responsibility, and cost of an item.
Oracle Inventory supports a number of predefined and user-defined transaction types. Every
material movement has a corresponding set of accounting transactions that Oracle Inventory
automatically generates. All transactions validate the various controls (revision, locator, lot
number, serial number and secondary unit of measure) you enable for items.
See Overview of Inventory Transactions, Oracle Inventory Users Guide for more information.

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Overview of Inventory Transactions

Inventory Transactions
You can perform the following inventory transactions:
Receive items into your organization from a general ledger account number.
Issue items from your organization to a general ledger account number.
Transfer items from a subinventory in your organization to another subinventory in the
same organization.
Transfer items directly between organizations.
Transfer items between organizations by way of intransit.
Reserve items for a specific account or temporarily prevent the release of items onto the
shop floor.

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Inventory Transactions

Inventory Transactions Without Documents and Requisitions


You can perform Inter-organization transfers without using an internal requisition or
internal sales order.
You can use miscellaneous receipts to receive material without a purchase order number.
Use miscellaneous issues to issue material without approvals or a document number.
Use subinventory transfers to transfer the location of material without a document number.

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Inventory Transactions Without Documents and Requisitions

Inventory Transactions with Documents and Requisitions


You can use internal requisitions and internal sales orders as an approval mechanism and to
provide a document to track when you transport material between warehouses or transfer
material across inventory organizations.
Within a single warehouse or inventory organization:
Use move orders with a Move Order Issue transaction type to approve a transaction and to
provide a document to track the issue of the material. Previously, sales orders with
approvals in the order cycle were used to issue the material and track the movement.
Use move orders with a Subinventory Transfer transaction type to approve a transfer and
to provide a document to track the transfer of the material.

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Inventory Transactions with Documents and Requisitions

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Control Options and Restrictions

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Miscellaneous Transactions
Miscellaneous Transactions enable you to issue material to individuals or projects that are not
in inventory, receiving, or work in process. These could include a research and development
group or an accounting department. You can also make manual adjustments to the general
ledger by receiving material from one account to inventory, and then issuing that material from
inventory to another account.
For more information see Performing Miscellaneous Transactions Oracle Inventory Users
Guide
Miscellaneous Transactions Applications
With miscellaneous transactions you can:
Load items when you implement Oracle Inventory
Scrap items by issuing them to scrap accounts
Issue items to individuals, departments, or projects
Receive items that were acquired without purchase orders
Enter adjustments and corrections to system quantities due to theft, vandalism, loss, shelflife expiration, or inaccurate record keeping
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Miscellaneous Transactions

Subinventory Transfer
Some of the uses of subinventory transfers are:
Transferring between asset and expense subinventories
- Transferring between tracked and non-tracked subinventories

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Subinventory Transfer

Inter-organization Direct Shipment


The validity of a transfer transaction depends on the controls you have defined in both the
shipping and destination organizations for the items you want to transfer. For example, you can
transfer item A from organization X to organization Y, even though item A is under lot control
only in organization X (you can specify the lot numbers for item A in organization X during
the transfer transaction). You cannot however, transfer item B from organization X to
organization Y if item B is under lot control only in organization Y (you cannot specify lot
numbers for item B in the destination organization because you are performing a direct
transfer)
For more information see Direct Inter-organization Transfers, Oracle Inventory Users Guide
Unit of Measure Conversions
When you transfer items under dual UOM control between organization, the system honors the
UOM conversion of the destination organization. Consequently, the system could potentially
recalculate the secondary quantity for the item if the conversions differ between the shipping
organization and the destination organization. The system always processes transaction
quantities in the primary UOM. You must define UOM conversions in both the shipping and
destination organization before the system can process the transaction.
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Inter-organization Direct Shipment

Inter-organization Intranist Shipment


You usually transfer material to intransit inventory when transportation time is significant.
When you perform the transfer transaction, you do not need to specify the delivery location.
You only need to enter the subinventory you are shipping from, a shipment number, the freight
information, and, depending on the inter-organization transfer charge that applies between the
organizations, a percentage of the transaction value or a discrete amount that Oracle Inventory
uses to compute transfer charges.
If the FOB point is set to Receipt in the Shipping Networks window, the destination
organization owns the shipment when they receive it. If it is set to Shipment the destination
organization owns the shipment when the shipping organization ships it, and while it is
intransit.
While your shipment is intransit, you can update shipping information such as the freight
carrier or arrival date in the Maintain Shipments window.
At the time of shipment, you must define your receiving parameters for the destination
organization. You can receive and deliver your shipment in a single transaction or you can
receive and store your shipment at the receiving dock.

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Inter-organization Intransit Shipment

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The validity of a transfer transaction depends on the controls you have defined in both the
shipping and destination organizations for the items you want to transfer. For example, you can
transfer item A from organization X to organization Y, even though item A is under lot control
only in organization X (you can specify the lot numbers for item A in organization X during
the transfer transaction). You can also transfer item B from organization X to organization Y if
item B is under lot control only in organization Y (you can specify lot numbers for item B in
the destination organization when you perform the receiving transaction).
Unit of Measure Conversions
When you transfer items under dual UOM control between organization, the system honors the
UOM conversion of the destination organization. Consequently, the system could potentially
recalculate the secondary quantity for the item if the conversions differ between the shipping
organization and the destination organization. The system always processes transaction
quantities in the primary UOM.You must define UOM conversions in both the shipping and
destination organization before the system can process the transaction.

Managing Receipts
You can receive both internally and externally sourced shipments and deliver material directly
to inventory, the shop floor, and You can deliver to inventory, shop floor, and expense
destinations. You can also can satisfy the following receiving business needs:
Increased receiving process control
Streamlined receiving throughput
Increased transaction visibility and traceability
A common process for all receipt types
Entering Receipt Information
To process receipts, you select the items to receive and enter the receipt quantities. If you
change the unit of measure, the system adjusts receipt quantity to reflect the new unit of
measure. You can override this value if you are recording a partial receipt or are receiving
more than the expected quantity.
The quantity received on the corresponding purchase order or return material authorization
(RMA) is updated to reflect the received quantity.

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Managing Receipts

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Substitutions
You can receive predefined substitute items when you allow suppliers to ship alternatives to
the items that you order. For example, you assign different internal item numbers to mountain
bikes of the same model number but different color. You have an agreement with your
mountain bike supplier that allows him to ship white bikes in place of blue bikes.
Specifying Substitute Receipt Details
You can select a substitute item in the Lines region based on the following restrictions:
You must allow substitute receipts for the shipments you receive.
You have defined substitutes for the items you receive.
When you query in the list of values for the item, the system displays all valid substitutes for
the item you want to receive. All subsequent receipt processing is identical to other standard
and direct receipts.
Supplying Handling of Substitute Items
When you receive a substitute item, the system removes the purchase order supply for the
original item.
If you perform a standard receipt, the system creates receiving supply for the new item.
If you perform a direct receipt, the system increments on-hand balances for the new item.

Express Receipts and Receiving Transactions


The express function is a quick method of entering receipts and receiving transactions. You can
use an express receipt when the physical receipt quantity equals the expected quantity. You
can:
Create a new receipt or add to an existing receipt for the supplier who shipped the items
you want to transact.
Specify the supplier for new receipts.
Click Express to select either the final destination or the default receiving location.
Omit individual shipments that you do not want to process by selecting the Omit action in
the Receipt Lines region.
Any receipts that cannot be transacted with an express receipt will remain in the Receipt
Line region after you save your work.
In order to enable the Express button, the system must be able to derive the supplier either by
specifying the supplier or a PO number.

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Express Receipts and Receiving Transactions

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Direct Receipts

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Standard Receipt

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Inspection Receipt

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Move Orders
Move orders are requests for the movement of material within a single organization. They
formalize the process to request the movement of material within a warehouse or facility for
purposes like replenishment, material storage relocations, and quality handling.
Move orders are generated manually or automatically depending on the source type used.
Move orders are restricted to transactions within an organization. Transfers between
organizations require an internal requisition.
Move Order Requisitions
A manually generated request, available for subinventory and account transfers.
These requests can optionally go through a workflow based approval process before they
become move orders that are ready to be sourced and transacted.

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Move Orders

Move Order Requisition Process Flow


Move orders can be created manually or automatically. Oracle Order Management
automatically creates them to support the staging of Picking Waves.
Move Orders can be one of the following three types:
Requisition Move Order: To relocate material or adjust perpetual inventory records
Inventory Replenishment Move Orders: To refill depleted inventory locations
Pick Release Move Orders: To replenish forward pick locations
Move orders will be manually or automatically generated, depending on the source of the
transaction.
Move orders must be assigned detailed source and destination locations, or used to identify
shortages for further action. This process is called Allocating, and must occur for all move
orders.
If the material could not be fully sourced because of a lack of available quantity, the Move
Order is in backorder and the unsourced balance can be re-released at a later time.
Move instructions can now be issued for available quantities either through printing of a paper
pick slip or transmission to a mobile device through Move Order APIs.
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Move Orders Process Flow

Move Order Approvals


If approvals are required on Move Order requisitions, Oracle Inventory manages the approval
process through Oracle Workflow.
When the requisition is created, the workflow approval process sends a notification to the item
planner that a move order requisition line is awaiting approval.
Timeout Period is an organization-level attribute that determines the number of days the order
can wait for an approval action. After one timeout period, if the order is still not approved or
rejected, a reminder notice is sent to the item planner. After another timeout period the order is
automatically approved or rejected depending on the move order timeout action you determine
at the organization level.
The Move Order Timeout Period and Timeout Action are both inventory organization
parameters. These inventory parameters do not override any periods set up by Oracle
Workflow.
The Item Planner is an item attribute. If no planner is specified for the item, the requisition line
is automatically approved.
If no approvals are required in your organization, set the Timeout Period to 0 and the timeout
action to Approve Automatically.
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Once the order line is approved, notices are sent to a notification list that is attached to the
source and destination subinventories to let the subinventory planners know that material will
be moved to or from their areas.
Note: Replenishment and pick wave move orders are pre-approved.

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Benefits of Managed Material Flow


Oracle Inventory uses move orders to distinguish the user roles that should manage inventory
levels from those who carry out actual transactions. The following are the benefits of managed
material flow through move orders:
Quick Response: You can now request a transaction and forward the request on to a
picker for actual transaction execution. The request is tracked in Oracle Inventory to
minimize inaccurate information transfer. When required, replenishment mechanisms
automatically generate move orders without the intervention of an item planner for simple
cases where the material is drawn from within the facility. This results in faster inventory
replenishment with minimal human intervention.
Warehouse Visibility: Move orders use inventory picking rules to determine where to
source material for a subinventory or Move Order Issue. This ensures that the same
mechanisms created to rotate material properly for deliveries is used to rotate material
within the facility. It also uses the material visibility in Oracle Inventory to automatically
suggest source locations, lots, and so on.

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Tracking: Move orders can be transacted through Application Program Interfaces (APIs).
APIs enable you to use mobile devices to transact, giving you better material visibility and
accuracy. Move orders can also be created to cross-dock material to staging locations.

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Move Order Source Types


Oracle Inventory provides three types of move orders:
Move Order Requisitions
Replenishment Move Orders
Pick Wave Move Orders
The move order type refers to the entity that created the move order. For all move orders, the
final result is one of the two supported transactions: subinventory or move order issue.
Move Order Requisition
The requisition is a manually generated request for a move order. You can generate requests
for subinventory transfers or move order issues. The requisition can optionally go through an
Oracle Workflow approval process before it becomes a move order. If no approval process is
used, the requisition becomes a move order immediately.
Replenishment Move Order
These move orders are generated automatically. For example, kanban cards can create a
replenishment move order where the pull sequence calls for a subinventory transfer
(intra-organization kanbans), or by min-max planned items where the items replenishment
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Move Order Source Types

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source (set at the item-subinventory level) is another subinventory. In this case, the min-max or
replenishment count report automatically generates a move order. Replenishment move orders
are pre-approved and ready to be transacted.
The type of move order generated depends on the replenishment source:
If the replenishment source is a supplier, then a move order requisition is created.
If the replenishment source is another inventory organization, then an internal requisition
is created.
If the replenishment source is a subinventory then a replenishment move order is created.
Note that the source subinventory must be set up at the item subinventory level. For the
min-max report to generate a move order, the report must be generated at the subinventory
level.
For kanban to generate a move order, the pull sequence source type must be set to Intra-org.
Pick Wave Move Order
The pick release process generates move orders to bring the material from its source location in
stores to a staging location, which you define as a subinventory in Oracle Inventory. This
transaction is a subinventory transfer.
These move orders are generated automatically by the Oracle Shipping Execution pick release
process.
These orders are pre-approved and ready to transact. Pick slips and other shipping and
inventory reports will also be available with Oracle.
WIP Issue Move Orders
An optional process in Oracle WIP allows you to run pick release for the components of a
range of jobs or schedules. This process creates move orders to either directly issue the
material to WIP, or to move the material to the backflush locator. These orders are
automatically approved, the picking rules are used to allocated material for the job, and pick
slips can be printed for warehouse users.

Move Order Components


Move Order Header
The move order header contains the move order source type. This refers to the entity that
created the move order. An order could be a pick wave for sales order picks, a replenishment
type move order, a requisition for subinventory transfer, and so on. The move order header also
contains the default source and destination if available, the order number, and the requested
date.
Move Order Lines
Move order lines are the requests on a move order. They contain the item, requested quantity,
the completed quantity (if the move order has been partially fulfilled), and a source and
destination, if known. The move order lines also include any project and task references, if the
organization is project-manufacturing enabled. You can also enter specific serial or lot
numbers on the move order lines.
Move Order Line Details
The line details are the inventory transactions that will occur to fulfill a particular request line
(move order line). If the material is locator-, lot-, or serial-controlled, this information is filled

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Move Order Components

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in at the line detail level. These details are automatically filled in by Oracle Inventory using the
inventory picking rules and the item-transaction defaults for destination locators or you can
manually fill in the details. You can edit these details prior to transaction.

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Generating Move Order Requisitions


You use the Move Orders window to create move order requisitions by specifying item,
quantity, source, destination, locations, and other order information. For each move order, an
order number is required. A number is defaulted for you if you leave the field without entering
a value.
In the Default region, you can set up values that default to the lines. Default fields are not
required. You can set up a default transaction type of either Subinventory Transfer or Move
Order Issue. A Move Order Issue is the same as an account issue. You can specify the Move
Order Issue for accounts and account aliases. You can define a default source subinventory,
destination subinventory or account, for Move Order Issues, as well as the requested delivery
date (date required) for the material.
The lines are the actual material requests for the move order. In the Item tabbed region, you
can specify the item, revision, and quantity, and you can update the delivery date for that item.
A move order requisition manually requests subinventory transfers or Move Order Issues.
These requests can optionally go through an approval process before they become move orders
that are ready to be sourced and transacted. The approval process does not include dollar
amount constraints.
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Generate Move Orders

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Defining Project and Task Information


If the organization is a project manufacturing-enabled organization, you specify the project and
task in the Project and Task tabbed region.
Defining Source Information
You use the Source tabbed region to specify the subinventory from which to draw the material.
This field defaults from the header-level default block but can be overridden if necessary. You
can also specify the locator, lot, and serial numbers if known to use for the transactions. Only
the subinventory field is required. If you do not know from where the items should come, the
On Hand button takes you to an on-hand inquiry window for that item to locate the material
within your organization.
Defining Destination Information
You use the Destination tabbed region to specify the subinventory or account for Move Order
Issues that the material should be delivered. This field defaults from the header-level default
block but can be overridden if necessary. You can also specify the destination locator for
subinventory transfer move orders if known.
Defining Control Information
You use the Control tabbed region to request a subinventory transfer or Move Order Issue at
the line level by selecting a transaction type. This field defaults from the header-level default
block but can be overridden if necessary. You can optionally specify a reason and reference
code on the inventory transactions.
(Help) Oracle Manufacturing Applications > Oracle Inventory >Transactions > Overview of
Move Orders
.. / Generating Move Order Requisitions
../ Generating Replenishment Move Orders

Allocating Move Orders


Allocating is the process in Oracle Inventory that uses picking rules and item transaction
defaults to suggest move order line details to fulfill a move order line. The line details are the
inventory transactions that must be fulfilled to complete the move order allocation. You can
consider the allocating process as a sourcing process. Allocating occurs when you click the
Allocate button in the Transact Move Orders window.
Suggesting Sources
Oracle Inventory uses the picking rules you set up at the organization or organization-item
level to suggest source locators, revisions, and lots to source the material in order to fulfill a
move order allocation.
You can optionally use the Select Available Inventory Window to manually select material.
This window displays available inventory that meets the demand the move order requires. It
displays only material that satisfies the picking rules that are in effect, and presents the material
in order of the sort criteria on the picking rules. You can then manually select the material to
allocate against the move order, and the system creates the allocations.
You can modify or delete existing allocations, as well as create new allocations. If you choose
to create new allocations, the system checks whether the new allocation criteria drives the lot
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Move Order Allocating

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balances negative or whether the lot is indivisible. The system honors lot-specific conversions,
process manufacturing quality matches, material status, and preferred grade if you set the
profile option INV: Target Preferred Grade to Yes. The information that appears on this page is
available according to the picking rules you define, and sorted in the order defined on the
allocation rules.
Suggesting a Destination
The picking rules only suggest source locations. If the destination subinventory is locatorcontrolled and no locator is specified on the move order line, Oracle Inventory generates a
suggestion based on the item subinventory locator default you set up for move orders. You can
set up a default locator for each item that you want to move around the warehouse on a move
order. This is not the same default type that you would use for receiving or shipping.
You have two choices in transacting the move orders to transfer the material to the destination
location:
Automatic Pick Confirmation: The move order is transacted instantly after the order is
allocated without any further human intervention. On-hand inquiries will show the
material in staging. You can then perform ship confirmation.
Manual Pick Confirmation: You can confirm the pick of the move order allocation. You
can also update any picking details such as the source locations, lots or serials and to
report shortages or inventory inaccuracies and allow the system to generate more pick
suggestions. Reporting inventory inaccuracies enables you to request a cycle count in the
inventory area where the material was not found if so desired.
Oracle Shipping
Oracle Shipping provides two choices for when and how you can fill in the line details. These
choices are made by setting up an organization parameter but can be overridden at pick release.
Auto allocate: The allocating process is done at pick release instantly after the move
order is created. No more human intervention is needed and the pick slip can be printed
automatically.
Pick release only creates move orders but does not fill in the line details. You must
navigate to the move order form after pick release and click on the Allocate button. This
option allows warehouse managers to determine when to release the pick to the floor and
might be a better solution for implementations running a global order entry with
distributed warehouse management and/or shipping. In these cases, orders can be released
to regional warehouses from the central order management location in advance and
individual warehouses can schedule picks closer to actual ship time.

Allocating Items
Reservation
A reservation is a link between a supply source and a demand source. A reservation creates a
permanent data link between a supply source and a demand source, and represents a guaranteed
allotment of material to a specified demand source.
Pending Transaction
A pending transaction is a transaction that Oracle Inventory expects to occur shortly, but
confirmation of the transaction has not yet been recorded. This is a material pick that has not
yet been completed. Move order line details are an example of the pending transaction. A pick
slip may have already been printed, but the picker has not yet indicated that they have
deposited the material in the destination location.
Neither reserved material nor a pending transaction quantity is included in any availability
calculation for the source location.
You should not allocate a move order line too soon in the business process, because the
allocating process for a move order creates pending transactions and removes that quantity
from an availability picture. Allocating should not be done until you are ready to print the pick
slip and move the material.
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Item Allocation

Transacting Move Order Lines


Use the Transact Move Order Line Allocations window to view, allocate, transact move order
allocations, view the move order line details, and transact move order allocations. Transacting
move orders will post all movement activity immediately for the selected move order line and
its related details. You can save and exit the move order line details without transacting if you
need to print a pick slip report. This enables you to transact each detail line before or after
picking the material.
For more information see Allocating Transacting Move Orders, Oracle Inventory Users
Guide.

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Transact Move Orders

Mobile Transactions
Oracle Mobile Materials Management enables you to use mobile devices to perform receiving,
inventory, and shipping transactions. You can:
Record inspections, deliveries, and material movements during receiving transactions.
Create transactions for material including kanban movement, cycle counting, and
intraorganization replenishment.
Perform pick confirm and ship confirm transactions.
Print labels
Inquire on item and kanban transactions
Subinventory transfer
Transact move order
Inter-Organization Transfer
Perform move orders
Transfer inventory between organizations
Transfer material between subinventories
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Mobile Transactions

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For more information see Mobile Materials Management, Oracle Mobile Supply Chain
Applications Users Guide.

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Managing Shipments
You can review and update intransit shipments between inventory organizations.
Shipment Visibility: You can access all incoming and outgoing shipments associated
with the current organization.
Shipment Header: You can update information pertaining to the shipment header such as
Ship-to Location and Number of Containers. If you change the Expected Receipt Date,
Oracle Purchasing updates Shipment Supply to reflect the new due date.
Shipment Lines: You can update information pertaining to the shipment lines such as
Expected Receipt Date, Receipt Routing, Packing Slip, and Note to Receiver. The receipt
routing that you specify in Maintain Shipments overrides routings specified at the item,
organization, or system levels.

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Managing Shipments

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Transactions Reports

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Transactions Reports

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Transactions Reports

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Transactions Reports

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Summary

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Chapter 8

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R12 On-hand and Availability

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R12 On-hand and Availability

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Objectives

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Overview of On-hand Quantity


On-hand quantity is the physical quantity that resides in your subinventory. For example, the
Bulk subinventory has 15 items that reside in it. Therefore, the on-hand quantity for the Bulk
subinventory is 15.

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Overview of On-hand Quantity

Overview of Reservations
A reservation is a link between a supply source and a demand source. A reservation creates a
permanent data link between a supply source and a demand source, and represents a guaranteed
allotment of material to a specified demand source. Item reservations prevent the allocation of
material you previously set aside for a sales order, account, account alias, inventory allotment,
user-defined source, process batch components or, Oracle Complex Maintenance and Repair
Overhaul work order components. You can also create reservations for different types of
supplies such as on-hand inventory, purchase orders, internal requisitions, discrete jobs, shop
floor jobs, and process manufacturing batches. In addition, you can create reservations for
advanced shipment notices (ASNs) and material in receiving for Oracle Warehouse
Management enabled organizations.

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Overview of Reservations

Overview of Availability
To Planning functions, avail = supply - demand for a particular time period
To Inventory, avail = on hand-res-pending transactions
Note
Availability to Inventory is not the same as availability to Planning- Planning looks at
inbound supply in addition to on hand quantity and deducts other demand. Inventory only
looks at what is on hand and subtracts what is committed to other uses (i.e reserved or
about to be moved or issued out the door)
Availability to Inventory depends on what you want to use the material for. For example,
if you have material that is in a non-reserved subinventory, that quantity will not be
available to reserve but it may be available to transact (for miscellaneous issues etc).

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Overview of Availability

Reservation Versus Allocation


For Oracle Inventory, a reservation is a guarantee of inventory. These can be made at a variety
of levels. For example, you can reserve five mountain bikes in the FGI subinventory. You can
create a reservation any time you book an order or schedule a job. Reservations do not have to
be for on-hand inventory. You can reserve purchase orders, wip jobs, process manufacturing
batches, and so on.
An allocation is a transaction suggestion generated by the allocation process (essentially a
pending pick). It honors the reservations made, if any, and the picking rules specified.
Allocations are detailed down to the subinventory, locator, and if applicable, lot level.
Allocations are the result of the pick release process. Allocations are only created against onhand inventory.
Both allocations and reservations deduct from available inventory but in different ways. There
are checks in place to ensure that the system does not double deduct when you have a reserved
sales order that has also been allocated but not picked.

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Reservation Versus Allocation

Material Workbench
The Material Workbench enables you to view material in receiving, on-hand quantities, and
inbound material. You can also view material across organizations. In addition, you can create
and save queries, create move orders, and request cycle counts, as well as change material
statuses.
You can view item quantity across organizations. You can view only material in organizations
to which you have access. If you do not enter an organization, you must enter an item.

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Material Workbench

Display Options
The viewing option that you select dictates the information the Material Workbench displays.
The viewing options are:
Location: Location information includes the subinventory and associated locators. You
can also view subinventory quantities, including packed and unpacked quantities. This is
the only view by option that you can use if the material location type is Inbound.
Item: Item information includes the organization, item number, UOM, available quantity,
lot, and serial number. You can use this option only if the material location type is Onhand.
Cost Group: Cost Group information that is assigned to the item. You can use this option
only if the material location type is On-hand.
Status: Status information that includes the statuses assigned to subinventories, locators,
lots, and serials. You can use this option only if the material location type is On-hand.
LPN: If you are in an Oracle Warehouse Management enabled organization, you can view
LPN information for the item. You can use this option if the material location type is Onhand, Receiving, or both.

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Serial: Serial information lists the serial numbers that are generated for an organization
and the items that are associated with the serial numbers. You can use this option only if
the material location type is On-hand.
Lot: The system lists the lot numbers that are generated for an organization and the items
that are associated with the lot numbers. You can use this option only if the material
location type is On-hand.
Grade: The system lists the grade and the items that have a particular lot grade. You can
use this option only if the material location type is On-hand.

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Viewing Available Items


You can use the Material Workbench to view item availability. The system can calculate item
availability for a given item at the subinventory, locator, lot, serial, or revision level. You can
view items that are available to reserve as well as available to transact. The system shows the
information in both the primary and secondary quantities if applicable.

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Viewing Available Items

Material Workbench Transactions


You can use the material workbench to perform the following transactions:
Status Update: Enables you to change material status information.
Cost Group Transfer: Enables you to transfer the item to another cost group.
Grade Update: Enables you to update a lot grade.
You can use the material workbench to perform the following requests:
Mass Move: Moves the selected items to a new subinventory.
Mass Issue: Enables you to mass issue an item.
Cycle Counting: Enables you to initiate a cycle count for the selected subinventory.

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Material Workbench Transactions

Available to Promise
Available to Promise (ATP) represents the quantity available for sale at any given period. The
basic formula for ATP is ATP quantity = on-hand quantity + supply - demand shortage.
Oracle Inventory enables you to define different rules that govern what is considered supply
and demand. Available to promise process looks at existing supply and demand to determine
availability. For example, you have 100 units on hand on Monday, and 100 units of purchase
orders coming on Tuesday and new orders that you plan to release to execution for 100 units
on Wednesday. Consequently, the available to promise on Monday is 100, Tuesday is 200, and
Wednesday is 300.
Capable to promise
The capable to promise computations will try and create new supplies to compute availability.
If there is a demand for 200 units on Monday, then the system determines whether to move the
availability date to Tuesday when the Purchase orders and on-hand make it 200 units or see if
there is enough capacity and upstream materials (components) to make, procure, or transfer
100 additional units to make the availability for Monday.

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Available to Promise

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What are Supply and Demand?

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Uses of ATP in Inventory


You can view the earliest available data for a specific quantity of an item or a group of
items and the available quantity of an item for a specific date.
You can view the supply, demand, and ATP item quantities for the periods that fall
between the current date and the end of the ATP horizon.

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Uses of ATP in Oracle Inventory

Defining an ATP Rule


Navigation Path
Inventory Responsibility (N) Setup > Rules > Available to Promise
You can use the following equation to calculate the ATP quantity for each supply period.
Period ATP = (period supply) (period demand)

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ATP Rules Setup Steps

ATP Computation Options


When you define ATP rules, you must specify computation options. Computation options
govern how to calculate the ATP quantity in each period. You can use computation options
individually or in combination.
Backward Consumption of Shortage
You can calculate ATP information by using the surplus quantity of an item from prior ATP
periods to cover a period shortage. If the period ATP is negative, you can go backward through
the supply periods, one at a time, and subtract the shortage from the available quantity. You
can keep going backward until the shortage disappears or you run out of periods.
Forward Consumption of Shortage
You can calculate ATP information by using a surplus quantity of an item from future ATP
periods to cover an earlier period shortage. If the period ATP is negative, then you can go
forward through the supply periods, one at a time, and subtract the shortage from the available
quantity. You can keep going forward until the shortage disappears or you run out of periods.

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Defining Computation Options

Determining ATP using Accumulation Options


You can use the Accumulate Available option to calculate ATP by carrying over the available
quantity of an item from one ATP period to the next.
Note: This option assumes backward consumption of shortage.
Entering an Accumulation Window
Accumulation window is the number of days by which to limit the accumulation of available
supply. The accumulation window is measured in workdays based on the organization calendar
and exception set.
The accumulation window option prevents the commitment of near-term supply to orders that
have requirement dates far into the future. The accumulation window applies to only the
following two computation options:
Accumulate Available
Backward Consumption

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Defining Computation Options

Specifying Supply and Demand Time Fences


A time fence is the total lead time required to purchase or manufacture an item. You can define
item time fence options to provide timing information for the ATP calculation.
The ATP calculation algorithm uses the following time fences:
Past-due-supply time fence
Past-due-demand time fence
Infinite-supply time fence
Entering Past Due Supply and Demand Days
Past-Due-Supply Days
The ATP process does not consider any supply scheduled before the past-due-supply time
fence date. The ATP process considers all supply from the beginning of the past-due-supply
time fence date to the current date as supply for the current date.
Past-due-supply time fence date = (current date) (past-due-supply days)

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Specifying Supply and Demand Time Fences

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Past-Due-Demand Days
The ATP process does not consider any demand scheduled before the past-due-demand time
fence date. The ATP process considers all demand from the beginning of the past-due-demand
time fence date to the current date as demand for the current date.
Past-due-demand time fence = (current date) (past-due-demand days)

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Selecting an Infinite-Supply Option


The infinite-supply time fence date is the end of the ATP horizon. Oracle Inventory does not
consider supply sources scheduled on or after this date in ATP calculations. The infinite-supply
option represents the total time beyond which the ATP process assumes that infinite supply is
available to cover any scheduled demand.
You can select one of the following infinite-supply options:
Cumulative manufacturing lead time: The manufacturing lead time of an assembly plus
the largest adjusted cumulative manufacturing lead time of its components.
Cumulative total lead time: The total lead time of an assembly plus the largest adjusted
cumulative total lead time of its components.
Total lead time: The sum of the preprocessing, processing, and postprocessing lead times
of an item.
User-defined time fence: A lead time that you specify for the item.

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Specifying Supply and Demand Time Fences

Specifying a Supply Period


Oracle Inventory designates a period as beginning on a scheduled supply date and ending on
the day before the next scheduled supply date. A supply period can cover several days or be a
minimum of one day.
If supply occurs on a nonworkday, the ATP calculation considers that supply as belonging to
the next workday. If multiple supply events occur on the same day, the ATP process considers
the total supply.

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Specifying Supply and Demand Time Fences

ATP Demand
ATP demand is the sum of all demand quantities in the supply period. If demand occurs on a
nonworkday, the ATP calculation considers that demand as belonging to the previous workday.
ATP by Demand Class Check Box
If you select the ATP by Demand Class check box, the ATP calculation considers only supply
and demand for a particular demand class. The demand class feature enables you to forecast,
plan, and promise based on subdivisions of your demand. For example, a demand class might
represent a large customer or a group of related customers.
If you select ATP by Demand Class, Oracle Inventory considers only the following sources of
supply:
Discrete MPS
Repetitive MPS
Discrete WIP
Repetitive WIP
Nonstandard WIP

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Specifying Demand Sources

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Including User-defined Demand Sources


In addition to Oracles predefined sources, you can use your own demand sources. To use your
own demand sources, you must populate the user-defined demand interface table with your
external demand information.

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Using the Available On-Hand Quantity as the Supply Source


You can choose to include available on-hand quantity as a source of supply. However, you
should not typically use available on-hand quantity as supply in make-to-order and assembleto-order environments.
Including User-Defined Supply as a Supply Source
In addition to Oracles predefined supply sources, you can use your own supply source.
However, you must populate the user-defined supply interface table with your external supply
information.

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Specifying Supply Sources

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Setting Up Item and Bills for ATP Checking

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Enabling ATP Checking When Placing a Demand


If you enable the Check ATP attribute, the item must pass an ATP test before you can place a
demand for it in Oracle Order Management. When you place a demand for the item in Oracle
Order Management, the ATP process checks to see if there is sufficient quantity.
If you decide not to enable the Check ATP attribute, then you can place a demand for the item
even if there is not sufficient stock to satisfy the demand. You should not enable the Check
ATP attribute for items that are noncritical, rarely out of stock, on a short manufacturing cycle,
or replenishable on short notice.
Specifying an Item ATP Rule
Oracle Inventory uses the ATP rule that you assigned to check ATP when you place a demand
for the item in Oracle Order Management. If you do not specify an ATP rule for the item, the
ATP process uses the organization-level default ATP rule that you enter in the Organization
Parameters window.

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ATP Checking

Reservation Types
For on-hand inventory supply, there are two types of reservations, high level reservations, and
low level reservations. High level reservations contain information about the item and the
organization. Low level reservations contain more detailed information about the item such as
revision, lot, subinventory, serial, and locator. You use the Item Reservations window to
create, view, update, transfer, and delete reservation requests.

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Reservation Types

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Supply Types

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User-Defined Demand
You can create your own demand types based on transaction source types. For example, you
can create a demand type for consigned material that you receive from a supplier. For more
information about creating transaction source types see Defining and Updating Transaction
Source Types, Oracle Inventory Users Guide.

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Demand Types

Reserving Material
You can create reservations as high-leveled or as detailed as you would like. You can reserve
material at the subinventory, locator, and if applicable lot and serial level.
You can reserve specific serial number, or reserve multiple serials. You can only enter a serial
for the supply type Inventory using the Reservations window. If you enter a serial number in
the serial column, and the item is uniquely identified in the system, then the quantity and
reserved serial quantity fields default to one, and all other applicable fields such as item, lot,
and LPN default as well. If the item is not uniquely identified, then you must enter the item
number. Once you enter the item number the rest of the information populates automatically. If
you reserve multiple serials, then the column Reserved Serial Quantity displays the amount of
serials you reserved. Though this value can differ from the quantity column, it cannot exceed
the quantity column.

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Reserving Material

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Changes to Supply
If you make changes to supply sources, then the system behaves as follows for the different
supply types:
Purchase Requisition: If you reduce the quantity of, or cancel a purchase requisition that
is reserved against a demand, then the system reduces or the cancels corresponding
reservation.
Purchase Order: If you reduce the quantity of, or cancel a purchase order, that is
reserved against a demand, then the system modifies or cancels the corresponding
reservation. Any other changes to the purchase order that affect the expected quantity also
trigger changes to the associated reservation. Such changes include, changing the
organization, or item, or closing the order line.
Internal Requisition: You cannot modify an approved internal requisition. You can
however, modify the associated internal sales order. When you modify an internal sales
order, the system updates the supply data. If you modify the quantity of an internal sales
order, then the system also modifies corresponding reservations against the internal
requisition.
Advance Shipment Notice: If you cancel a reserved ASN then the reservations engine
checks to see if a reservation against the PO existed before the system transferred it to the
ASN. If a previous reservation exists, then the system transfers the reservation back to the
PO. If a previous reservation against the PO does not exist, then the system cancels any
reservations associated with the ASN.
Process Production Batches and Shop Floor Jobs: If you make a change to a process
production batch or a shop floor job, then the system updates the corresponding
reservations.
Changes to Demand
If you make changes such as canceling or reducing the quantity of a sales order, then Oracle
Order Management modifies corresponding reservations.
If you reserve components for a work order against inventory or a purchase order, and you
modify the demand source, then the system modifies the corresponding reservations.

Reservation Management - Transfer Supply


You can transfer the supply from an existing reservation from one supply source to another
supply source. For example, you can can transfer the reservation from one lot to another or
from on-hand inventory to a purchase order.

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Reservation Management - Transfer Supply

Reservation Management - Transfer Demand


You can transfer the demand from an existing reservation from one demand source to another
demand source. For example, you can transfer the inventory reserved from one sales order to
another (more important) sales order.

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Reservation Management - Transfer Demand

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On-hand and Availability Reports

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Profile Options

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Profile Options

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Implementation Considerations

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Summary

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Chapter 9

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R12 Material Status

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R12 Material Status

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Objectives

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Explaining Material Status


Material Status control restricts the movement and usage of portions of on-hand inventory.
Using material status control enables you to control whether you can pick or ship an internal
order or sales order, or issue material for a work order. You can also specify whether material
needs to be quarantined until you inspect it. In addition, you can determine whether products
with a particular status can be reserved, included in available to promise calculations, or netted
in production planning. You assign material statuses at four levels: subinventory, locator, lot,
and serial.
Item status drives the item attributes by allowing you to keep an item from being built in
Oracle Work In Process, ordered, procured etc. Material status is a granular control over each
inventory transaction that applies to specific material within your warehouse or manufacturing
facility.

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Material Status

Material Status Control Levels


You can assign subinventory and locator a material status in the subinventory and locator
windows. You can also assign a material status to a lot or serial (you must first enable the item
attributes Lot Status Enabled, and Serial Status enabled on the item in the Item Master). You
can also optionally assign a default lot or serial status to an item on the Item Master. When you
receive the item, the system automatically assigns the default lot or serial status to the item.
The lot or serial status remains the same through all inventory transactions including
organization transfers. If necessary, you can change the material status at receipt, use the
material workbench, or mobile status update page to modify the material status. For more
information about setting up lot and serial statuses see Inventory Attribute Group, Oracle
Inventory Users Guide.
When a material status is assigned to a subinventory or locator, the material is not assigned the
material status of the subinventory or locator; rather, it takes on the behavior indicated by the
material status at the subinventory or locator level.

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Material Status Control Levels

Material Status Transactions


A material status is a combination of transactions and planning actions that you choose to
disallow in a particular circumstance. Disallowed transactions and planning actions are
cumulative. When you set up transaction types, you determine whether some transactions can
be restricted by material status. The transactions for which you enable status control in the
Transactions Types window appear in the Material Status Definition window. If you do not
enable status control for a transaction type, then the transaction type is always allowed.
You can also assign the planning attributes Allow Reservations, Include in ATP, and Nettable
to the material statuses that you create. When you transact an item, the system checks all of the
material statuses. If the system finds a status that disallows the transaction, whether at the
serial, lot, locator, or subinventory level, then the transaction fails.

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Material Status Transactions

Cumulative Effective Status


A cumulative effective status is the combination of all disallowed transactions. Disallowed
transactions and planning actions are cumulative.
When you transact an item, the system checks all of the material statuses. If the system finds a
status that disallows the transaction, whether at the serial, lot, locator, or subinventory level,
then the transaction fails.
For example, if you have a locator whose status disallows WIP Issue and that locator is in a
subinventory whose status disallows Sales Order Issue, neither of those transactions will be
allowed for material that is in the locator.

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Cumulative Effective Status

Material Status Examples


This example describes four typical material statuses and the actions to allow or disallow:
Active: This is a typical default for your warehouse. It does not disallow any transaction
types.
Hold: You might use this status for material that needs to be inspected or whose quality
is suspect. You could not perform certain transactions for material in this status until you
change it to a different status.
Immature: This status is useful for material that needs to age in the warehouse before
being picked or shipped for a sales order. You may want to allow internal orders to move
the material around your distribution chain, but picking and shipping this material for
orders to customers should be prevented.
Almost Mature: This material has a very short aging process, or is nearly mature. By
assigning material this particular status, you enable that material to be picked and staged,
but prevent the material from being shipped. As soon as material is completely matured,
it can be assigned a status of Active and shipped immediately.

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Material Status Examples

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Setting Up

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Defining Item Material Status Control


When you define a material status, you can select the Lot or Serial check boxes so the system
can assign a default material status to a serial or lot controlled item at receipt. The receiving
operator can accept the default status that the system suggests, or he or she can assign another
status. You determine the default material status during item definition. Assigning a material
status to an item under lot or serial control is optional.
Any material status defined and enabled for lots can be set as the default material status of a
lot, and similarly, any material status defined and enabled for serials can be set as the default
material status of a serial number. The system uses the default material statuses to determine
which material status should appear on the receipt.

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Defining Item Material Status Control

Assigning Material Status Control to Subinventories and Locators


When you define material statuses, you can select the Subinventory and the Locator check
boxes so you can assign material statuses to subinventories and locators when you define them.
Subinventories are assigned a material status in the Subinventories window. You also assign a
default locator status for all locators within the subinventory. This default locator status is used
in two situations:
1. When locator control is set to prespecified (all locators in the subinventory must be
defined before they can be used), the default status is used to default the locator status.
However, this status can be changed for each locator as it is defined.
2. When locator control is set to dynamic (locators need not be defined in advance, but will
be created on the fly as users define new locators), the default locator status will be used
for these newly defined locators.

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Assigning Material Status Control to Subinventories and Locators

Assigning Planning Statuses


When you define material statuses, you can choose to enable reservations, ATP, and nettable
control. If you choose to enable reservations for the material status, then you can view material
associated with this status in the Item Reservations window. You can create a reservation
against the material, and the system includes it in the available to reserve calculations. For
more information see Item Reservations, Oracle Inventory Users Guide.
If you choose to enable ATP for the material status, then the system includes material assigned
to this status in ATP calculations.
If you choose to Nettable, then the MRP planning process considers the requirements of the job
or schedule in its netting calculations.
Note: You cannot apply a status that is non-reservable, non-nettable, or non-ATPable to
serials.

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Assigning Planning Statuses

Disabling Material Statuses


You can disable material statuses you no longer use. If a material status is assigned to any lot,
serial, subinventory, or locator, then you cannot disable it. You can use the Material
Workbench query, all entities with a particular material status, and then update the material
status of those entities. You can disable the material status once you reassign all of the entities
to different material statuses.

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Disabling Material Statuses

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Material Status Reports

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Implementation Considerations

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Summary

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Chapter 10

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R12 Replenishment
Fundamentals

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R12 Replenishment Fundamentals

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Overview of Oracle Inventory


Inventory planning involves answering two questions:
When should you place a new order?
How much should you order?
Using the Oracle Inventory application, you can set up the following types of inventory
replenishment plans:
Min-max planning
Reorder-point planning
Kanban replenishment planning
Replenishment counting (for non-quantity tracked subinventories)
After you select the replenishment method that you want to use, Oracle Inventory concurrent
programs populate the requisition interface.
Oracle Inventory planning interfaces with Oracle Purchasing, and indirectly with Oracle Order
Management.

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Overview of Inventory Planning

Replenishment Considerations
Before you replenish your inventory, you should consider the following:
Order time
Order size
Planning method
When to Order
Typically, you should order when the on-hand quantity plus incoming supply minus demand is
less than the specified minimum inventory level. On-hand quantity refers to what you currently
have in stock. Supply represents on-hand stock plus inventory coming into the organization.
Demand represents the need for a particular item.

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Order Planning

How Much to Order


Ideally, you should order a quantity that balances the cost of placing an order with the cost of
managing inventory while covering expected demand. After you determine the amount to
order, you can create a requisition to replenish inventory from another organization or a
supplier.
Note: Suppliers may have minimum order quantities.

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How Much to Order

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Replenishment Process for Intra-Org Supply Sources

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Replenishment Process for Supplier Supply Sources

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Replenishment Process for Inter-Org Supply Sources

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Replenishment Process for Production Supply Sources

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Replenishment Methods

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Overview of Inventory Forecasting


A forecast is an estimate of future demand on inventory items. A forecast contains information
on the original and current forecast quantities (before and after consumption), the confidence
factor, and any specific customer information. You can assign any number of inventory items
to the forecast and use the same item in multiple forecasts. For each inventory item, you can
specify any number of forecast entries.
Oracle Inventory generates forecasts based on historical transaction activity. When creating a
forecast, you can select the type of transactions that you want to use. You can also specify how
far into the future that you want to forecast demand. After you complete a forecast, you can use
it to determine reorder-point planning. You can also load forecasts into the master schedule,
which is a component of the Oracle Material Requirements Planning (MRP) application. If you
do not have Oracle Planning installed, you can create forecasts only for reorder point demand
planning.
If you have only Oracle Inventory, forecasts are used for the entry of the annual demand for
reorder point.

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Forecast Sets
Forecast sets consist of one or more forecasts. Sets group complimenting forecasts into a
meaningful whole. For example, a forecast set could contain separate forecasts by region.
Forecast Rule
Forecast rules define the bucket type, forecast method, and the sources of demand.
Note: You can manually create forecasts using Oracle Inventory or Oracle MRP. There are no
constraints for manually created forecasts. Manually created forecasts can be based on
transaction activity other than historical data. For more information see Defining a Forecast
Rule and Generate a Forecast, Oracle Inventory Users Guide.

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Forecast Types
Forecast generation uses mathematical algorithms to calculate a prediction of future demand.
You can calculate estimated future demand for items using historical data and focus or
statistical forecasting techniques. You can create multiple forecasts and group complementing
forecasts into forecast sets. Oracle Inventory supports the following forecast types:
Focus
Statistical
Focus forecasting enables you to simulate various methods of calculating demand so you can
select the best forecasting model. Statistical forecasting enables you to use detailed history and
applies weighted factors to exponentially smooth the data. Statistical forecasting also enables
you to apply exponentially weighted trend and seasonality factors to predict demand.
You typically use focus forecasting to produce single period forecasts, whereas you can use
Statistical forecasting to forecast any number of periods into the future.

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Forecast Types

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Forecast Setup and Maintenance

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Oracle Inventory Replenishment Methods


You can use Oracle Inventory to set up specific replenishment methods to help you decide the
size, timing, and amount to order. Oracle Inventory supports the following replenishment
methods:
Reorder-Point-planning
Min-Max planning
Kanban replenishment
Replenishment counting
For more information see Overview Inventory of Planning and Replenishment, Oracle
Inventory Users Guide.

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Oracle Inventory Replenishment Methods

Oracle Inventory Replenishment Methods (continued)


Based on the replenishment method you select, you can perform replenishment planning at the
organization or subinventory level. The table in the slide summarizes the levels at which you
can perform a specific replenishment method.
Note that kanban replenishment is performed at the locator level. Also Periodic Automatic
Replenishment (PAR) which is a type of Replenishment Counting is also done at the locator
level.

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Replenishment Methods Levels

Note
To manually assign: (N) Planning > Safety Stocks
To have the system calculate: (N) Planning > Safety Stock Update

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Safety Stock

Economic Order Quantity


The economic order quantity (EOQ) is a type of fixed order quantity that determines the
amount of an item to be purchased or manufactured at one time. The intent is to minimize the
combined costs of acquiring and managing inventory.

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Economic Order Quantity

Reorder-Point Planning Overview


You can use reorder-point planning to order a quantity when the quantity falls to a
predetermined reorder-point. Ideally it is best to reorder at some point before inventory levels
fall into the safety zone. Safety stock typically provides a buffer from which to fill orders
between reorder-points. At the end of the lead time, the on-hand quantity should equal the
safety stock.
The essential feature of reorder-point planning is that it projects what the stock level will be
based on forecast demand and no visibility of sales orders at the end of the items lead time.
This projection is then used to decide whether or not the reorder-point has been reached. The
system calculates the reorder-point by adding expected demand during lead time to safety
stock.
You perform reorder-point planning for the entire organization. You can use reorder-point
planning for items under independent demand. That is, demand for items (or materials) that are
independent of the demand for other items (or materials). When you define an item, you can
specify reorder-point planning as the inventory planning method. You should use reorder point
planning only if demand and leads times are stable.
For more information see Reorder Point Planning, Oracle Inventory Users Guide.
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Overview of Reorder-Point Planning

Uses of Reorder-Point Planning


You can perform reorder-point planning for the entire organization.
You can use reorder-point planning for items under independent demand.
You can specify reorder-point planning as the inventory planning method when you define
an item.
You can use reorder-point planning for items that you do not need to control very tightly
and that are not very expensive to carry in inventory.
You can use reorder-point planning to decide when to order new quantity before using
safety stock.

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Uses of Reorder-Point Planning

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Reorder-Point Planning Steps

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Providing a Forecast
The reorder-point planning program uses information from the forecast to calculate the
Economic Order Quantity (EOQ) and the reorder-point quantity. The following equations show
each of these calculations:
EOQ = SQRT {[2 (annual demand) (order cost)] / (annual carrying costs)}
Reorder point = safety stock + [(lead time) (average demand)]
Providing On-Order Quantity Information
Oracle uses on-order quantity information to determine when to reorder an item. You should
reorder when the following is true:
(quantity on hand + quantity on-order) < reorder point
Oracle uses the following sources to calculate on-order quantities:
Purchase orders
Requisitions (internal and supplier)
In-transit shipments owned by the organization
Oracle Inventory uses purchase orders, requisitions, and in-transit shipments that are scheduled
to be delivered before the supply cutoff date.
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Performing Reorder-Point Planning

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Viewing Planning Information


You can view planning information before creating replenishment orders. If you want to create
replenishment orders automatically, then you must request requisitions.
Creating Requisitions
Oracle creates requisitions for all items that meet the following condition:
(quantity on hand + quantity on order) < reorder point
Oracle creates either purchase requisitions (if the source is a supplier) or internal requisitions
(if the source is an Inventory Organization). The reorder quantity is the EOQ constrained by
the following attributes:
Fixed-lot size multiplier
Minimum order quantity
Maximum order quantity
Reorder Submission
You can submit the planning process for all items under reorder-point planning or submit the
planning process for just those items that are below their reorder-point quantities.

Min-Max Planning Overview


Min-max planning is a method of inventory planning that determines how much to order based
on user-defined minimum and maximum inventory levels. In contrast to reorder-point
planning, min-max planning is not based on demand projections and does not consider lead
time. With Oracle Inventory, you can perform min-max planning at the both the organization
and the subinventory levels. To perform organization-level min-max planning for an item, you
must specify organization-level minimum and maximum quantities. Min-max planning is
typically used to control low value inventory items that do not need great control. To perform
subinventory-level min-max planning for an item, you must specify subinventory-level
minimum and maximum quantities.
For more information see Min-Max Planning, Oracle Inventory Users Guide.

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Overview of Min-Max Planning

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Uses of Min-Max Planning

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Min-Max Planning
Recall that Min-max planning is a method of that determines when and how much to order
based on user-defined minimum and maximum inventory levels.
Note: To perform organization-level Min-max planning for an item, you must specify
organization-level minimum and maximum quantities.
Deciding When to Order with Min-max Planning
You should order when the following is true:
(on-hand quantity demand) + (quantity on order) < minimum quantity
Quantity on order is the sum of purchase order quantities, requisition quantities, and in- transit
shipments. It also includes WIP jobs as supply at the organization level. Quantity on order
represents supplies that you have not yet received in your organization.

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Min-Max Planning

Note
You can constrain the order quantity by specifying the following order modifiers for an item:
Fixed-lot multiplier
Minimum order quantity
Maximum order quantity

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Min-Max Planning: How Much to Order?

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Min-Max Planning Steps

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Item Planning Attributes

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Min-Max Planning Setup Procedure

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Selecting a Planning Level

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Entering Item Planning Attributes


After you select a planning level enter the appropriate planning attributes.

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Entering Planning Attributes

Submitting the Min-Max Planning Requests


In addition to setting up planning attributes, min-max planning involves submitting a
concurrent process that generates the min-max planning report. You can also perform
exception reporting with the min-max planning reporting feature. When you submit the minmax planning request, you must specify a number of parameters including parameters that
address the following:
Nettable subinventories
Demand quantities
On-order quantity information
Requisitions and WIP unrealized jobs
Exception reporting
You can submit the planning process for all items under min-max planning. You can also
submit the planning process for just those items under their minimum quantities and submit the
planning process for just those items over the maximum quantities.

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Submitting the Min-Max Planning Requests

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Using Nettable Subinventories


Oracle Inventory enables you to use on-hand quantities that exist in either nettable or nonnettable subinventories, or both.
Displaying Demand Quantity
Oracle Inventory displays the sum of all unfulfilled demand created before the cutoff date. The
system calculates demand quantity by using information from the following sources:
Sales orders
Internal orders
You can include WIP job component requirements as a source of demand as well. You can net
unfulfilled demand against on-hand quantity and also include inventory reservations in netting
on-hand quantity against demand.
Viewing Planning Information
You can view planning information before creating replenishment orders. To automatically
create replenishment orders, you must request requisitions.
Creating Requisitions and WIP Unrealized Jobs
If you request a restock, Oracle Inventory creates requisitions and WIP unreleased jobs for all
items that meet the following condition:
(on-hand quantity) + (quantity on order) < minimum quantity
Oracle Inventory creates purchase requisitions (if the source is a supplier) and internal
requisitions (if the source is an Inventory Organization) for all Buy items, and WIP unreleased
jobs for all Make items. The order quantity is constrained by the following attributes:
Fixed-lot size multiplier
Minimum order quantity
Maximum order quantity

Replenishment Counting
Replenishment counting enables you to perform counts for non-tracked subinventories and
then direct Oracle Inventory to check these counts against the minimum quantities that you
specified.
A non-tracked subinventory is an expense subinventory for which Oracle Inventory does not
maintain on-hand quantity information. When you move valued material to a non-tracked
subinventory, Oracle Inventory automatically charges the appropriate expense account and
discards that quantity. Non-tracked subinventories typically store items of low value, such as
office stationery. You can also use replenishment counting if you do your own planning. In this
case you may order either a specific quantity or the maximum quantity specified in the MinMax values. Non-tracked subinventories might include hospital storerooms, where there is no
opportunity to record accurate and timely issue-transaction information.
For more information see Overview of Replenishment Counting, Oracle Inventory Users
Guide.

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Overview of Replenishment Counting

Uses of Replenishment Counting


Recall that replenishment counting is a method of ordering items for subinventories. You can
perform counts for the non-tracked subinventories and then have Oracle Inventory check these
counts against the minimum quantities that you have specified. Oracle Inventory creates
requisitions that are based on the sourcing options that you specify for each item.

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Uses of Replenishment Counting

Replenishment Planning Steps


The following are the steps involved in performing a replenishment count:
1. Specify the requisition approval status using the profile options.
2. Use the Subinventories window to create the subinventories for which you want to
perform replenishment counts.
3. Assign items to the subinventories using the Item Subinventories window.
4. Define sourcing information for the subinventories. You can define sourcing information
at various levels, for example you can define sourcing information at the itemsubinventory level or at the subinventory level.
5. Enter the replenishment count header information using the Replenishment Count
Headers window.
6. Enter the replenishment counts using the Replenishment Count Lines window.
7. Process and report the count information for the system to generate requisitions based on
the sourcing information. For example, if sourcing is from another subinventory then the
system automatically generates a move order.

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Note
Use the INV: Replenishment Count Requisition Approval profile option to specify the
requisition approval status.
Use the INV: Replenishment Count Line Failure profile option to specify whether the
system should stop or continue processing in case a replenishment count fails.

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Subinventories Window

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Specifying Min-Max Planning


To enter replenishment counts for an item, you must specify subinventory-level min-max
planning for the item.
Entering Subinventory-Level Min-Max Minimum and Maximum Quantities
You can use the min-max method to replenish subinventories. In one replenishment count
entry method, you can order the min-max maximum quantity.
In another replenishment count entry method designed only for non-tracked subinventories,
you can enter an on-hand quantity, after which Oracle Inventory performs min-max
calculations.
Navigation Path
Inventory Responsibility (N) Setup > Organizations > Subinventories (B) Item/Subinventory.

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Item Subinventories Window

Entering Order Modifiers


Fixed-Lot-Size Multiplier
When you perform replenishment counting, Oracle Inventory calculates order quantities that
are multiples of the fixed-lot-size multiplier.
Minimum Order Quantity
When you perform replenishment counting, Oracle Inventory calculates order quantities that
are greater than the minimum order quantity.
Maximum Order Quantity
When you perform subinventory replenishment, Oracle Inventory calculates order quantities
that are less than the maximum order quantity.
Navigation Path
Inventory Responsibility (N) Setup > Organizations > Subinventories > (T) Order Modifiers.

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Item Subinventories: Order Modifier Tab

Entering Replenishment Count Header Information


In the Replenishment Count Headers window, you enter a name and subinventory for which
you want to perform replenishment counting.
Navigation Path
Use the following navigation path to access the Replenishment Count Headers window:
Inventory Responsibility (N) Counting > Replenishments Counts > Counts (B) New.

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Replenishment Count Headers

Entering Replenishment Count Lines


You must enter replenishment count header information to enter replenishment count lines for
items that are associated with the subinventory that you specify.
For any count type, the reorder quantities are constrained by fixed-lot-size multiple quantities,
maximum order quantities, and minimum order quantities. Oracle Inventory uses the sourcing
options defined for that item and subinventory combination.
On-hand Quantity
This method is only for non-tracked subinventories. The item for which you select this method
must be a min-max planned item. You can count the contents of the subinventory and then
enter the on-hand quantity. Oracle Inventory uses the quantity that you enter to perform minmax comparisons and to generate requisitions.
Order Maximum
The item for which you select this method must be a min-max planned item. Oracle Inventory
generates a requisition for the min-max maximum quantity specific to that item and
subinventory combination. You cannot enter a quantity if you select this option.

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Replenishment Count Lines

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Order Quantity
The item for which you select this method can be planned using any replenishment planning
method. With the Order Quantity count type, Oracle Inventory generates a requisition for the
quantity that you enter.
Navigation Path
Use the following navigation path to access the Replenishment Count Lines window:
Inventory Responsibility(N) Counting > Replenishment Counts > Counts (B) Lines.

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Entering Counts Using External Devices


You can use external data collection devices, such as bar code readers to enter replenishment
counts. You can run the replenishment validator and processor after entering counts directly
into the replenishment open interface.
Replenishment Validator and Processor
The replenishment validator reads the count records that exist in the interface table. The
interface table stores the counts that you enter with an external device. Oracle Inventory
validates the items, subinventories, and counts, and then writes the records to the count tables.
The replenishment count processor performs the calculations that are necessary to determine
whether Oracle Inventory should create requisitions. Oracle Inventory creates internal or
purchase requisitions according to each items default sourcing options. Run the replenishment
validator program before submitting the replenishment processor.
Purging Replenishment Counts
If you want to purge replenishment counts, use the Purge Replenishment Counts window.

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Processing Replenishment Counts

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Navigation Paths
Inventory Responsibility(N) Counting > Replenishment Counts > Process Interface.
Inventory Responsibility (N) Counting > Replenishment Counts > Purge.

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Mobile Device Replenishment Count


Oracle Mobile Materials Management provides windows to perform mobile replenishments.

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Mobile Replenishment Count Overview

Periodic Automatic Replenishment (PAR) Counting


PAR counting is replenishment counting done at the locator level in a subinventory.

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Overview of PAR Counting

PAR Counts
Periodic Automated Replenishment (PAR) counting is a replenishment method that enables
you to perform replenishment count at a locator level. For example, in Oracle Inventory you
can model a hospital storeroom as a subinventory and the shelves and trolleys in the storeroom
as locators. You can define PAR levels for each item stored in these locators. You can
replenish these items every time they go below the PAR level.
In general, the steps for PAR are the same as that of replenishment counting. For a list of these
steps, see Replenishment Planning Steps earlier in this lesson. The following steps are specific
to PAR:
Enable PAR level planning for the subinventories.
Define locators for the subinventories.
Enter the PAR level when you define the item subinventory relationship.
Note: If you have enabled PAR level planning for a subinventory, you cannot perform minmax planning for that subinventory. The PAR level acts as both the minimum and maximum
quantity levels for subinventories that have PAR level planning enabled.

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Processing PAR Counts

PAR Count Reorder Quantity


The reorder quantity when you process a PAR count depends on the following factors:
PAR Level
Quantity
Count Type
The table in the slide explains how the reorder quantity differs based on these factors. The
system generates the appropriate replenishment document based on the item sourcing for the
subinventory. For example, if sourcing is from another organization, the system automatically
generates an internal order.
If you choose on-hand quantity as the count type, then the quantity denotes the on-hand
quantity available in the locator. The system compares this quantity that you enter with the
PAR level to calculate the reorder quantity. This option is only for non-tracked subinventories.
If you choose order PAR then the reorder quantity is same as the PAR level. This is similar to
the order maximum option available when you perform a replenishment count. You cannot
enter the quantity if you choose order par.

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Reorder Quantity for PAR Count

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Choose order quantity to generate a replenishment requisition for the quantity that you want to
order. In this case, the quantity denotes the order quantity.
Note: If you have not specified the PAR level, then you can only choose order quantity as the
count type.

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Kanban Replenishment
Kanban is a means of supporting pull-based replenishment in manufacturing systems. A
kanban system is a self-regulating pull system that leads to shorter lead times and reduced
inventory. Kanban systems are typically applied to items with relatively constant demand and
medium-to-high production volume.
Kanbans represent replenishment signals that are manual and highly visible, such as a colorcode card that moves with the material, a light that goes on when replenishment is required, or
an empty bin that is moved to the supply location to trigger replenishment.
Kanban systems typically provide support for external devices, such as bar code readers to read
kanban cards and trigger a replenishment signal.
Kanban System Features
Kanban systems include the following characteristics:
Close cooperation between the users and the supply channel
Short re-supply lead times
Relatively small quantities reordered at a time
Relative frequent ordering
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Overview of Kanban Replenishment

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For more information see: (Help) Oracle Inventory > Inventory Planning and Replenishment >
Overview of Kanban Replenishment.

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Kanban Replenishment
Recall that a kanban system is a self-regulating pull system that leads to shorter lead times and
reduced inventory. Kanban systems are typically applied to items with relatively constant
demand and medium-to-high production volume.

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Kanban Cards

Kanban Planned Items


To define a kanban planned item, you must set the Release Time Fence attribute in the
MPS/MRP Planning attribute group to the Kanban Item (Do Not Release) option in the Master
Items window. Use the following navigation path to access the MPS/MRP Planning attribute.
You can define pull sequences only for kanban planned items.
Navigation Path
Inventory Responsibility (N) Items > Master Items > (T) MPS/MRP Planning.
Defining Pull Sequence Sources
For every kanban planned item, you must define a pull sequence, which is a series of kanban
locations that model the replenishment network on the shop floor. For example, a kanban
location can be a subinventory locator. The replenishment source for a kanban location can be
another kanban location, a production line, or an external source. You can use locators even if
locator control is turned off at the organization and item levels.
Kanbans can be sourced from an external supplier or an internal organization. A suppliersource-type kanban triggers a purchase request to the supplier, while an inter-org- source-type
kanban results in an inter-organization transfer.

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Kanban Planned Items

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Navigation Path
Inventory Responsibility(N) Kanban > Pull Sequences > (T) Source.

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Kanban Cards
Kanban cards are created for an item, subinventory, and locator (optional). They are uniquely
identified by a kanban number. For cards generated from a kanban pull sequence, the number
is automatically generated. For manually defined cards, both replenishable and
nonreplenishable, you can enter an unused kanban number or let the system create the number.
You cannot override the quantity for generated cards, but you can add additional cards or
delete existing cards from the pull sequence to control the inventory in the replenishment
chain.
A supply source defaults from the sourcing rules if a sourcing rule is available for the item and
kanban location. Only the primary supplier, based on the split percentage and ranking, is used.
You can manually override the quantity and supply source on a pull sequence only before the
cards are printed. Changes to the pull sequence are not reflected until the old cards are deleted
and new ones are created. Updates to the sourcing rules apply only to cards created after the
update.

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Kanban Cards

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Kanban Card Status


Kanban cards are generated with a default card status of Active. When you define a card
manually, you can initially give it either Active or Hold status.You can terminate use of a card
by changing the card status to Canceled, but you cannot reverse this change. Only canceled
cards can be deleted.
Navigation Path
Inventory Responsibility(N) Kanban > Pull Sequences (T) Kanban.

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Kanban Supply Status


You can set all of the supply status codes manually. You can also set all of the supply statuses
automatically except for In-Transit. All cards are generated with a status of New. You can
switch this status to Empty to trigger a kanban replenishment signal. During initial setup, you
can switch the status to Full if you are starting out with a full bin. When you are defining a card
manually, you create a card with at status of Empty, Full or New.

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Kanban Supply Status

Kanban Sources of Replenishment


You can create kanban cards with the following source types:
Inter-Org: Replenished by another organization.
Intra-Org: Replenished from another subinventory in the same organization.
Production: Replenished by a production line.
Supplier: Replenished by an external supplier.
Flow Schedules: Replenished by flow.
User Defined: You can define a replenishment source.

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Kanban Replenishment Sources

Kanban Card Printing


You can print kanban cards for a replenishment plan or a replenishment chain when you
generate the cards. You can also print cards individually if the card information is complete.
You can print duplicate cards only if the original is lost or voided. You are given a warning
message when you print duplicate cards.

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Kanban Card Printing

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Planning and Replenishment Reports

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Planning and Replenishment Reports

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Profile Options

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Min-Max Order Type and Order Source


An item can be a make item or a buy item. This characteristic of an item and the source
type that you specify for the item determine the type of replenishment order created for that
item. For organization level min-max planning, you can specify the source type in the General
Planning tab of the Organization Item window.
For subinventory level min-max planning, you can specify the source type in the Sourcing tab
of the Item Subinventories window. If this is left blank, the report checks to see if a source type
is specified either at the Subinventory level, the Organization Item level, or in the Organization
Parameters window.
If the item is a Buy item and the source type is set to Inventory, min-max creates requisitions.
If the source type is Supplier, it creates purchase orders, and if the source type is Subinventory,
it creates move orders. Note that source type Subinventory is not valid for organization level
planning (it is not a valid option on the Organization Parameters window; if used on the
Organization Item window for an item that is planned at the organization level, it will not
restock the item). Items must also be transactable in order for min-max to create purchase
orders, requisitions or move orders (Transactable check box on Inventory tab of Organization
Item window checked).
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Implementation Considerations

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Purchasable Item Considerations


The following conditions must be satisfied before min-max can insert records into the PO
interface table:
For requisitions (source type Inventory), internal orders must be enabled for the item. That
is, the Internal Orders Enabled check box in the Order Management tab of the
Organization Item window must be selected.
For purchase orders (source type Supplier), the item is purchasable. That is, the
Purchasable check box in Purchasing tab must be selected.
An Inventory AP Accrual account is defined for the organization.
An Invoice Price Variance account is defined for the organization.
For Min-Max Report to create Purchase / Internal requisitions successfully, Encumbrance
Account should be specified at Item or Org level, if the Use Requisition Encumbrance
check box is selected in the Financial Options window under Encumbrance tab. For
subinventory level planning, Encumbrance Account should be specified at the itemsubinventory, subinventory, organization-item or organization level. For organization
level planning, min-max will only look at the organization-item or organization level to
find the encumbrance account. If the Use Requisition Encumbrance check box is not
selected, it is optional to specify Encumbrance Account in the Organization Items window
or Organization Parameters window.
A charge account is defined. If the Inventory Asset Value check box in the Costing tab of
Organization Item window is checked, then the material account is used. For organization
level planning, the material account is specified in the Valuation Accounts section of the
Costing Information tab of the Organization Parameters window. For subinventory level
planning, the material account is specified in the Subinventories window. If the Inventory
Asset Value check box is not selected, the expense account is used for organization level
planning. The expense account is defined on the Purchasing tab of the Organization Item
window, or in the Valuation Accounts section of the Costing Information tab of the
Organization Parameters window; for subinventory level planning, Oracle Inventory
checks the expense account defined at the subinventory level before looking at the orgitem or org level expense account.
Additional considerations for Creation of WIP Jobs
For make items, min-max inserts a record into the WIP interface table
wip_job_schedule_interface for creating a WIP Job or Schedule for manufacturing this item.
WIP work orders cannot be generated for subinventory level min-max planning if a Make
item is min-max planned at the subinventory level, the report flips the flag and treats it as a
Buy item instead. Also, the item must have the Build in WIP and Pick components enabled.
Make Item Considerations
The following considerations should be considered when using min-max on make type items.
Discrete MPS
Set the item type to Make.
Make certain that under the general planning tab the sourcing is set to null and cleared out.
Make certain to run the min-max planning with restock = yes. Whether or not WIP
demand and supply are included in the calculations is specified in the report parameters.

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It is possible to verify that an entry has been made into the table
WIP_JOB_SCHEDULES_INTERFACE.
Run the associated Mass load Concurrent Program (WIP > Discrete > Import Jobs and
Schedules) to ensure that the WIP interface tables have been picked up and processed.

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Replenishment Method Selection


Consider the following information when determining the replenishment method to use:
Supply sources
Document created during replenishment
Demand Sources: Although not listed in the table, demand sources might include the
following:
- Sales orders
- Forecasts

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Implementation Considerations

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Summary

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Chapter 11

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R12 Inventory Accuracy


Fundamentals

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R12 Inventory Accuracy Fundamentals

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Objectives

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Overview of Inventory Accuracy

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ABC Analysis
An ABC analysis determines the relative value of a group of inventory items based on criteria
you define. ABC refers to the rankings you assign your items as a result of this analysis, where
A items are ranked higher than B items, and so on.
You use the ABC analysis you compile to drive cycle counts. You count items of high value
(A items) very frequently, items of lower (B items) value less frequently, and items of lowest
(C items) value very infrequently.

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ABC Analysis Overview

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Defining an ABC Analysis

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Define and Run an ABC Compilation


An ABC Compile is a ranking of your items based upon selected criteria. You can define and
compile an ABC analysis for your entire organization or for a specific subinventory within
your organization.
You choose the compilation criterion, the scope of your analysis, the cost type to use in
determining item values and any additional information that may be conditionally necessary
based on your compilation criterion.

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Define and Run an ABC Compilation

ABC Compilation Criteria


For each distinct compile, you can choose one criterion (such as current on-hand value or MRP
demand usage value) to value and rank each item included in the ABC compile. The criterion
that you choose defines what the rank of a particular item will be in the ABC Compile.
For example, if you use current on-hand quantity as your compile criterion, then item X with
an on-hand quantity of 10 units is of higher rank than item Y with a quantity of 5 units. If you
use current on-hand value as the criterion and if item X has a cost of $10 per unit and item Y
has a cost of $25 per unit, then item Y has a higher value than item X since Oracle Inventory
compares $100 ($10x10 units) to $125 ($25x5 units).
Explaining ABC Compilation Criteria Options
Current On-Hand Quantity
Use the current on-hand quantity of inventory. Assign the sequence number by descending
quantity.
Current-On-Hand Value
Use the current on-hand quantity of inventory multiplied by the cost for the cost type.
Assign the sequence number by descending value.
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ABC Compilation Criteria

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Historical Usage Value


Use the historical usage value (transaction history). This is the transaction quantities times
the unit cost of the transactions for the time period you specify. Assign the sequence
number by descending value.
Historical Usage Quantity
Use the historical usage quantity (transaction history) for the time period you specify.
Assign the sequence number by descending quantity.
Historical Number of Transactions
Use the historical number of transactions (transaction history) for the time period you
specify. Assign the sequence number by descending number of transactions.
Forecasted Usage Value
Use the forecasted usage value based on the forecast quantity calculated and the cost type
you specify. Assign the sequence number by descending value.
Forecasted Usage Quantity
Use the forecasted usage quantity. Assign the sequence number by descending quantity.
Previous Cycle Count Adjustment Quantity
Oracle Inventory sums the quantity of all cycle count adjustments that have occurred since
the last ABC compile date. Assign the sequence number by descending quantity.
Previous Cycle Count Adjustment Value
Oracle Inventory sums the value of all cycle count adjustments that have occurred since
the last ABC compile date. Assign the sequence number by descending value.
MRP Demand Usage Quantity
Oracle Inventory sums the MRP gross requirements for the MRP plan you specify. Assign
the sequence number by descending quantity.
MRP Demand Usage Value
Oracle Inventory sums the MRP gross requirements for the MRP plan you specify, then
multiplies each by the item cost type you choose in the ABC compile form. Assign the
sequence number by descending value.
MPS Demand Usage Quantity
Oracle Inventory sums the MPS gross requirements for the MPS schedule you specify.
Assign the sequence number by descending quantity.
MPS Demand Usage Value
Oracle Inventory sums the MPS gross requirements for the MPS schedule you specify,
then multiplies each by the item cost type you choose in the ABC compile form. Assign
the sequence number by descending value.
DRP Demand Usage Quantity
Oracle Inventory sums the DRP gross requirements for the DRP plan you specify. Assign
the sequence number by descending quantity.
DRP Demand Usage Value
Oracle Inventory sums the DRP gross requirements for the DRP plan you specify, then
multiplies each by the item cost type you choose in the ABC compile form. Assign the
sequence number by descending value.

ABC Valuation Scope


You can select a valuation scope for determining the ranking of items. You can do an ABC
compile across individual subinventories or across an organization. If you choose to restrict
ABC compile to items within a particular subinventory, you have the option of valuing your
items across all subinventories in the organization or by the individual subinventory.

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ABC Valuation Scope

Defining ABC Groups


ABC assignment groups link a particular ABC compile with a valid set of ABC classes. This
allows you to selectively reduce or increase the number of ABC classes you want to use in
your item assignments for a particular ABC compile.
Oracle Inventory uses these groups when you automatically assign your items to ABC classes.
It ensures that you divide your items into the exact number of groupings you specified in the
ABC group.
You must also assign a sequence number to each class associated with the ABC group. The
class with the lowest sequence number is assumed to have the highest rank and will have
higher rank items assigned to that class than the next higher sequence number.
You may update an assignment group to add new classes, however you cannot delete a class. If
you need to delete a class, you must create a new assignment group with only the desired
classes.

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Defining ABC Groups

Defining ABC Classes


You use ABC Classes to identify the value groupings to which your items belong. You can
define these classes using your own terminology. For example you might define classes High,
Medium, Low, and later assign your items of highest rank to high, those of lower rank to
Medium, and those of the lowest rank to low. You must assign an ABC class to at least one
ABC group.
You can use ABC classes to group items for a cycle count where you count A items more
frequently than B items. When you use ABC classes in this way, you perform an ABC
analysis and assign items to classes based on analysis results.

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Defining ABC Classes

ABC Item Assignments


When you define ABC assignments you specify the cutoff point for each ABC class. Each
ABC class must have at least one item assigned to it and all items in the ABC compile must be
assigned to an ABC class. You can use any of the following fields to determine the cutoff
points:
Seq: You can enter the sequence number from the ABC Descending Value Report for the
last item to be included in each ABC class. Oracle Inventory automatically calculates this
value if you choose to assign classes by another method. Oracle Inventory displays the last
sequence number as the default of the last class.
Inventory Value: You can enter the cumulative value from the ABC Descending Value
Report for the last item to include in each ABC class. Oracle Inventory automatically
calculates the maximum value. This maximum value is restricted to the total inventory
value compiled and is displayed in the Total Compile Value field. Oracle Inventory
displays the total inventory value as the default for the last class.

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ABC Item Assignments

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ABC Item Assignments Note


% Items: You can enter the percent of number of items compiled from the ABC Descending
Value Report to include in each class. Oracle Inventory automatically calculates this value if
you choose to assign classes by another method.
% Value: You can enter the percent of total compile value from the ABC Descending Value
Report to include in each class. Oracle Inventory automatically calculates this value if you
choose to assign classes by another method.
It is possible to have several items in the ABC compile with zero value. If any item with zero
value is in a class other than the last class, you may only assign items using the sequence
number or item percent.
For the Inventory Value, % Item, and % Value fields, if the value entered does not exactly
match any item, Oracle Inventory chooses the first item with a value greater than the value
entered. For example, if you choose 20% to be A items, inventory calculates which items
comprise 20% and will include the next item if a partial is in the calculation. If 20% = the first
10 items in your compile, plus part of the 11th item, then items 1-11 are A items.
If you are not satisfied with the class into which an item falls as a result of the automatic ABC
assignment process, you can change it. For example, you compile your ABC analysis based on
historical usage value. A new item in your inventory is ranked low because it has little
transaction history. However, you know that for the future this item should really be ranked
higher. Use the Update ABC Assignments form to reclassify this item.
Whenever you recompile an ABC analysis or change the method by which you assign your
ABC classifications, you lose any changes you might have made to your item assignments. All
items are reclassified based on their new ranks in the ABC Descending Value Report and the
method you choose to determine cutoff points.

Cycle Counting
Cycle counting is the periodic counting of individual items throughout the course of the year to
ensure the accuracy of inventory quantities and values. Accurate system on-hand quantities are
essential for managing supply and demand, maintaining high service levels, and planning
production. Most effective cycle counting systems require the counting of a certain number of
items every workday with each item counted at a prescribed frequency. You can use cycle
counting along with ABC analysis to count items of greater importance more frequently than
those of less importance. Cycle counting supports scheduled counting based on value or
counting by location, and can be set up at the organization level or the subinventory level.
Benefits of Cycle Counting
Cycle counting enables you to keep inventory records accurate by correcting errors between
the system on-hand (perpetual) and actual on-hand (physical) quantities. Cycle counting can
also be a valuable tool to help identify patterns in the errors found. Analysis of these patterns
can suggest and help to prioritize improvements in training, tools, and processes. Over a period
of time these improvements may increase the average level of inventory record accuracy.

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Cycle Counting Overview

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Defining and Maintaining a Cycle Count

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Cycle Count Approval Tolerance


A cycle count is a count of a subset of items, counted during the working day rather than after
freezing stock levels. When the actual count and the system on-hand quantity do not agree, the
cycle count is compared to an approval tolerance.

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Cycle Count Approval Tolerance

Approval Tolerances
Oracle Inventory supports two types of cycle count approval tolerances, Quantity Variance
Tolerance and Adjustment Value Tolerance. For each type, you can specify a positive and a
negative limit which can differ from each other. When a particular cycle count entry results in
an adjustment that exceeds any one of these limits, you have a cycle count adjustment that
exceeds approval tolerances. Based on the approval option you choose when you define your
cycle count, this adjustment is either posted automatically or held for approval.
Quantity Variance Tolerance
The Quantity Variance Tolerance is a user-defined limit for the difference between the actual
cycle count quantity and the system tracked on-hand quantity. You express positive and
negative quantity variance tolerances as percentages of the system on-hand quantity.
You enter these percentages when you define your:
Cycle Count Header
Cycle Count Classes
Cycle Count Items

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Approval Tolerances

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Oracle Inventory uses any percentages you define at the cycle count item level first. If you do
not have any defined for an item, it uses the tolerances defined for that items cycle count class.
If you do not have any defined for the class, it uses the tolerances at the cycle count header
level. If you have no tolerances defined for the header, Oracle Inventory assumes that there is
no limit to the approval tolerance.
Adjustment Value Tolerance
The Adjustment Value Tolerance is a user-defined limit for the total value of a cycle count
adjustment.
The adjustment value is calculated as:
adjusted value = (system on-hand qty actual count qty) * current item cost
The Adjustment Value Tolerance is expressed as positive and negative amounts in your
functional currency. An adjustment value is out of tolerance if it falls outside of these amounts.
You enter these tolerances when you define your cycle count header and cycle count classes.
Oracle Inventory uses the values you define at the cycle count class level first. If you do not
have any defined for an items class, it uses the values at the cycle count header level. If you
have no tolerances defined for the header, Oracle Inventory assumes that there is no limit to the
approval tolerance.

Hit/Miss Tolerance
The Hit/Miss Tolerance is a user-defined limit for the difference between the system tracked
on-hand quantity and the actual cycle count quantity. You express positive and negative
hit/miss tolerances as percentages of the system on-hand quantity. A count is considered a hit
if it is within these tolerances, and a miss if it is outside them.
The Hit/Miss Tolerance allows you to evaluate the actual accuracy of your inventory.
You enter Hit/Miss tolerance percentages when you define your cycle count header and when
you define your cycle count classes. Oracle Inventory uses the percentages you define at the
cycle count class level first. If you do not have any defined for an items class, it uses the
tolerances at the cycle count header level. If you have no tolerances defined for the header,
Oracle Inventory assumes that there is no limit to the Hit/Miss tolerance, and all variances are
therefore hits regardless of the size.
Inventory uses these tolerances to generate the Cycle Count Hit/Miss Analysis report which
will be covered later in this course.

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Hit/Miss Tolerance

Measurement Errors
Negative and positive measurement errors are user-defined limits for the difference between
the cycle count quantity and the system tracked on-hand quantity. Measurement Error limits
are assigned by Item. Inventory does not make any adjustments to an item whose cycle count
quantity differs from the system tracked on-hand quantity by less than the measurement error.
Because of this, measurement errors may implicitly override any approval tolerances you
specify.
You specify measurement errors when you define or update an item at the Master Item or
Organizational Item level. Use measurement errors with extreme caution since they actually
prevent cycle count adjustments from taking place. You would typically use this feature on an
exception basis for items you cannot accurately count. For example, if you visually check the
level of bolts in a bin to estimate the quantity, or you use their weight to approximate the
quantity, you might want to allow for measurement errors. Therefore, if your system tracked
on-hand quantity for the bolts in that bin is within an acceptable range, you do not perform a
cycle count adjustment.

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Measurement Errors

Cycle Count Items


You must load items into your cycle count before you can schedule or count them. There are
two methods you can use to do this:
Specify an existing ABC group from which to automatically load your items
Manually enter, delete, or update the items you want included/excluded
When you specify an existing ABC group, Oracle Inventory automatically includes all items in
the ABC group you choose in your cycle count. Inventory also copies the ABC classes for that
ABC group into the current cycle count classes and maintains the same classifications for the
included items. You can change the classifications of your items for your cycle count
independent of the ABC classes.
Once you have generated your list of items to count from an ABC group, you can periodically
refresh the item list with new or reclassified items from a regenerated ABC group. Using the
Cycle Counts window, you can choose whether to automatically update class information for
existing items in the cycle count based on the new ABC assignments. You can also choose to
have any items that are no longer in the ABC group automatically deleted from the cycle count
list.

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Cycle Count Items

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You manually enter, delete, or update the items you want included/excluded using the Cycle
Count Items window. You may want to use this window to load all your items for a cycle count
or to simply add items as they are defined in the system rather than recompiling your ABC
group and doing a complete reinitialization.

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Automatic Scheduling
In order for Oracle Inventory to perform automatic scheduling you must do the following:
Set the Cycle Count Enabled item attribute to Yes for the items you want to include in the
cycle count.
Enable automatic scheduling when you define your cycle count.
Request the schedule using the Generate Automatic Schedule Requests window.
- Each time the auto scheduler runs, it schedules counts only for the schedule interval
you defined for the cycle count header. So if your schedule interval is weeks, Oracle
Inventory schedules all items that you need to be counted on all of the workdays in
the current week. If your schedule interval is days, then Oracle Inventory only
schedules those items that are due for counting on the current date.

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Automatic Scheduling

Manual Scheduling
You can request counts for specific subinventories, locators, and items, and set the count for
any inventory date. For example, you could enter a request to count item A wherever it can be
found in subinventory X. Or you could request to count all item quantities in subinventory Y,
locator B-100.
Since manually scheduled counts have no impact on automatically scheduled counts, you can
potentially count some items more frequently than you had initially planned.
Physical Location Scheduling
You can use this feature to execute location-based cycle counting. You first need to generate a
schedule for counting each subinventory and locator. You then need to enter the schedule
requests for each locator, specifying the schedule date.

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Manual Scheduling

Count Requests
This process takes the output of the automatic scheduler and your 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. These count requests are ordered first by
subinventory and locator, then by item, revision, and lot. Oracle Inventory assigns a unique
sequence number to each count request that can be used for reporting, querying and rapid count
entry.
As the count requests are derived from the state of on-hand balances at the time the Generate
Cycle count Requests process is run, you should wait to run it until you are ready to count.
Note: When you schedule an item to be counted using manual scheduling, some schedule
requests may have overlapping count requirements. The count request generator does not
create duplicate count requests, but instead cross-references one count request back to each
associated schedule request.

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Count Requests

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Count Requests for Items with Zero Count


By default Oracle Inventory does not automatically generate requests to count items with an
on-hand quantity of zero. To include such items:
Define all sourcing details and inventory controls for the item. For example, if an item is
under predefined locator control be sure it is assigned to a subinventory and locator.
Select the Count Zero Quantity option when you define your cycle count.
The count request generation process automatically creates a count request. If a quantity is
found and counted, an adjustment is made.
At count entry, you may receive a warning message stating Zero count, no adjustment
performed. Oracle Inventory generates this warning if it cannot find all levels of inventory
control defined for the item. In this situation, enter the count but no adjustment is performed.
To make an adjustment and update the missing information, enter an unscheduled count using
either the Cycle Count Entries or Approve Adjustments window.

Entering Cycle Counts


You can use the same window to enter counts of items requested through automatic or manual
cycle count scheduling. You can also enter unscheduled count entries, if they are allowed for
your cycle counts. You can use unscheduled counts to perform location based cycle counts.
You can also use a mobile device to enter cycle count quantities. If the item is under dual unit
of measure control the system automatically supplies the secondary unit of measure and
secondary quantity.
Oracle Inventory automatically queries all count requests for which you have not yet entered a
count. You can use flexible search criteria to specify the group of count requests for which you
want counts entered to speed up the count entry process. For example, you can specify a range
of count request sequences assigned to one person so they can be entered in the same order
they were printed on the count sheet.

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Entering Cycle Counts

Cycle Count Open Interface


You can import/export cycle count entries from external systems into Oracle Inventory using
the Cycle Count Entries Open Interface.
Export Cycle Count Request
This process enables you to export cycle count requests into external systems.
Update Cycle Count Open Interface
This process enables you to update cycle count entries.
Import Cycle Count Entries from Open Interface
This process enables you to import cycle count entries open interface records into the database.
Purge Cycle Count Entries Open Interface Data
This process enables you to purge all cycle count entries from the open interface.
Print Cycle Count Entries Open Interface Data
This process enables you to print cycle count entries open interface data.

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Cycle Count Open Interface

Count Adjustments and Approvals


Once you enter and save your cycle counts, Oracle Inventory determines whether any
adjustments need to be made depending on the approval options and tolerances you set when
you define the cycle count.

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Count Adjustments and Approvals

Automatic Recounts
If you turn on the Automatic Recount option when you define your cycle count, Oracle
Inventory automatically submits recount requests for items that are outside the limits of the
approval tolerances you specify. Oracle Inventory submits recounts as many times as
necessary, limited by the maximum automatic recounts you specify for the cycle count. After
you reach the maximum number of recounts, Oracle Inventory holds the count for approval.
Any count request with the Recount status automatically appears on the next cycle count
listing. You can manually request recounts when you are approving adjustments. This recount
request will be included in the next cycle count listing.

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Automatic Recounts

Approving Cycle Counts and Adjustments


Employees with access to the Count Adjustment Approvals Summary window can query,
request the recount of, or approve cycle counts pending approval. You can query all counts or
only those pending approval. You can approve adjustments, recount an item in question, reject
the count or take no action until further investigation takes place.
Approving Cycle Count Adjustments
You use the Count Adjustment Approvals Summary window to approve cycle count
adjustments, to request or approve recounts, or to reject the adjustment. Oracle Inventory
determines which counts need approval by using the approval tolerances you entered while
defining your cycle count. You can use flexible search criteria to specify the cycle count
adjustments you want to review or approve.
Using the Count Adjustment Approvals Summary window, you can view a variety of current
item information to help determine whether to approve an adjustment. Select the information
from the following tabbed regions:
Adjustment: View information for primary and secondary system quantity, primary and
secondary adjustment UOM, primary and secondary adjustment quantity, adjustment
value, and adjustment percent.
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Approving Cycle Counts and Adjustments

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Item Location: View information for subinventory and locator. You can also view the
primary and secondary adjustment UOM, primary and secondary adjustment quantity,
adjustment value, and adjustment percent.
Item Details: View information for a revision, lot number, and serial number. You can
also view the unit of measure and adjustment quantity.
Reason, Reference: View or update the transaction reason and reference information.
You can also view the primary and secondary adjustment UOM, primary and secondary
adjustment quantity, adjustment value, and adjustment percent.
Count: View information for primary and secondary UOM, primary and secondary count
quantity, counter, and count date.
Count Status, Class: View information for the sequence number, count status, and cycle
count class.
Approval: View information for date approved and approver.
Approval Actions and Adjustments Options
For items appearing in the Approval Actions, Adjustments region, you can approve, request a
recount, or reject cycle count entries that are pending approval. You can also approve or reject
any count for which a recount has already been requested. You can reject any cycle count
request that has not yet been counted. You can display count history information or open the
Count Adjustment Approvals window.
Select Approved to approve the selected count entry and post the adjustment to the
transaction manager for processing.
Select Rejected to reject the selected count record. An adjustment is not posted. No further
processing of this count entry takes place.
Select Recount to process a recount request for the selected count request. An adjustment
is not posted.
Select the Count History button to open the Count History window for the current item.
For the current item, this window displays count and variance information for the current,
prior and first counts.
Select the Open button to open the Count Adjustment Approvals window for the current
line. This window is a combination block which you can use to view and enter approval
and adjustment information for the current line instead of using the Count Adjustment
Approvals Summary window.

Mobile Device Inventory Accuracy


Oracle Mobile Materials Management provides windows to perform cycle counting and
complete physical inventory functions.

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Mobile Inventory Accuracy Overview

Physical Inventory
A physical inventory is a periodic reconciliation of system on-hand balances with physical
counts in inventory. You can perform physical inventories whenever you choose to verify the
accuracy of your system on-hand quantities. You can perform a physical inventory for an entire
organization or for particular subinventories within an organization. Physical inventories are
usually performed once every six months or once a year depending on the organization
requirements.

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Physical Inventory Overview

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Why Perform Physical Inventories?

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Defining Physical Inventories


You can define and maintain an unlimited number of physical inventories in Oracle Inventory.
A physical inventory is identified by a unique name you assign. You use this name to identify
any activity, such as adjustments, pertaining to this physical inventory.
You can define multiple physical inventories to count selected portions of your inventory, or
you can count the total inventory for you organization. For example, if your warehouse has two
large stockrooms, each represented by a subinventory, you can define two physical inventories,
one for each subinventory. You can then perform your physical inventory of the first
stockroom, independent of the second.

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Defining Physical Inventories

Physical Inventory Tags


You use physical inventory tags 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 you can record only one
item on a tag, multiple tags can reference the same item, with each tag referring to a unique
physical location for an item
Oracle Inventory can generate default or blank tags for your physical inventory. If you choose
to generate default tags for each item, specify the starting tag number and the increment by
which you want to increase each digit in the tag number. Your tag numbers may be
alphanumeric, but you can increment only the numeric portion. The alphabetic characters in the
tag number stay constant. Inventory then uses these tag numbers to generate a tag for every
unique combination of item number, revision, subinventory, locator, lot, and serial number for
which the system has an on-hand quantity not equal to zero.
If you want to have some empty tags handy to record counts for stock-keeping units for which
Inventory has no on-hand quantity (and therefore does not generate default tags), you can
generate blank tags. Inventory assigns tag numbers to blank tags, but does not include any item
or location detail. You specify this information when you enter your tag counts. You can
generate as many blank tags as you want.
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Physical Inventory Tags

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You can also exclusively use blank tags to perform a physical inventory. If you need to
perform a complete wall-to-wall physical inventory, you can go through your warehouse and
attach blank tags to every item and/or location you see. As you perform the count, you record
the item and stock-keeping unit information along with the actual on-hand quantity.

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Inventory Snapshots
Before you can generate tags for a physical inventory, you must take a snapshot of all system
on-hand quantities for your items. The snapshot saves all current item on-hand quantities and
costs. Oracle Inventory uses this information as the basis for all physical inventory
adjustments. All tag counts you enter for this physical inventory are compared with these static
quantities. This allows you to resume normal inventory operations after you have entered your
counts but before you have authorized all final physical inventory adjustments. You can
perform your recounts or investigate certain results without holding up transaction processing.
Note: Oracle Inventory does not stop inventory processing during a physical inventory.
Therefore, you must procedurally coordinate the snapshot of your physical inventory with your
actual counting, and ensure that no transaction activity occurs in a particular location until after
you have performed your adjustments.
Note: It is recommended to clear the Pending Transactions and Transactions Open Interface,
before taking a snapshot of inventory quantities.
For example, suppose that at the start of your physical inventory the system on-hand quantity
for item WIDGET in a particular bin is 30. Oracle Inventory saves this information with the
physical inventory snapshot. During the warehouse count, you count a total of 25 units of item
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WIDGET in the same bin. Before you approve your counts and perform your adjustments, you
resume normal transaction operations, and consequently, item widget reaches a system on-hand
quantity of 45. At this point, you perform your physical inventory adjustments. Oracle
Inventory computes the adjustment as the difference between the tag count and the snapshot
quantity, NOT the current system quantity of the item that has now reached 45. So in this case,
the adjustment is 25 - 30 = -5 units. When the adjustment is posted, the new system on-hand
quantity becomes 40 units.

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Entering Physical Inventory Counts


Use the tags that you generated to record your physical counts. If you use physical inventory
default tags for your physical inventory, you can automatically query all tags and fill in the
counts. You can also query a subset of your tags by any combination of tag number, item,
revision, subinventory, locator, lot, and serial number. You would use this partial tag query
feature if you prefer to enter your counts by location or item, or for a particular tag number
range.
Use the tags that you generated to record your physical counts. If you use default tags for your
physical inventory, you can automatically query all tags and fill in the counts. You can also
query a subset of your tags by any combination of tag number, item, revision, subinventory,
locator, lot, and serial number. You would use this partial tag query feature if you prefer to
enter your counts by location or item, or for a particular tag number range.If you enable
dynamic tag entry for your physical inventory, you can enter counts for any item and stockkeeping unit combination without a pre-generated tag number.
Oracle Inventory uses the counts you enter for your tags to determine if your items need
quantity adjustments; and if so, whether you need to approve them. If you set your approval
option for your physical inventory to Not required for adjustments you are ready to process
your adjustments. If you set your approval option to Required for adjustments out of tolerance,
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Oracle Inventory holds for approval all tags with counts that are outside the limits of the
quantity variance or adjustment value tolerances, If you set your approval option to Required
for all adjustments, Oracle Inventory holds all counts for approval.

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Voiding Tags
It is important for auditing purposes to track the status of each physical inventory tag.
Therefore, if you do not use one or more of the tags Oracle Inventory generates, you should
void them in the Physical Inventory Tag Counts window. A voided tag is not reported as a
missing tag in the Physical Inventory Missing Tag Listing.
If you generated blank tags at the beginning of your physical inventory, and ended up not using
all of them, you void the unused tags. When you run the Physical Inventory Missing Tag
Listing for the whole range of tags you generated, the unused tags appear as missing tags.
If you void a default tag, (for example, a tag that identifies a stock-keeping unit for which there
is system on-hand quantity), Oracle Inventory adjusts the quantity in that location to zero. This
indicates that you did not use the tag in question, presumably because the stock-keeping unit
corresponding to the tag did not exist.

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Voiding Tags

Approval Tolerances
Oracle Inventory supports two types of physical inventory approval tolerances. For each type,
you can specify a positive and a negative limit. When a particular physical inventory tag count
entry results in an adjustment that exceeds any one of these limits, you have a physical
inventory adjustment that exceeds approval tolerances. Based on the approval option you chose
when you defined your physical inventory, this adjustment is or is not held for approval.
If you decide that approval is required for adjustments out of tolerance you must enter at least
one positive or negative value for one type of approval tolerance. The quantity variance
tolerance is a user-defined limit for the difference between the system-tracked on-hand
quantity and the actual tag count quantity. You express positive and negative quantity variance
tolerances as percentages of the system on-hand quantity. You enter these percentages when
defining your physical inventory.
The adjustment value tolerance is a user-defined limit for the total value of a physical
inventory adjustment: adjustment value = (system on-hand qty - actual count qty) x current
cost, where: Current cost is the cost at inventory snapshot. You express positive and negative
adjustment value tolerances as amounts in your ledger currency. You enter these tolerances
when defining your physical inventory.
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Approval Tolerances

Physical Inventory Adjustments


You can view, reject, or approve physical inventory adjustments pending approval. The
adjustments you can view from this window are determined by the approval option you defined
for your physical inventory. If you approve a particular adjustment, the Process Physical
Inventory Adjustments program adjusts your inventory balance by that quantity. If you reject
an adjustment, Oracle Inventory does not change the system on-hand quantity.

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Accuracy Reports

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Profile Options

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Implementation Considerations

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Summary

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Chapter 12

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Objective

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Organization Tables
MTL_PARAMETERS: Associated with an organization. Primary key:
ORGANIZATION_ID.
MTL_INTERORG_PARAMETERS: Identifies the receiving organizations linked to a
particular organization. You must define the interorganizational relationship before you
perform any interorganization transfers. Units of measure, distance, transfer charge, and
accounting information are also specified in this table. Primary key:
FROM_ORGANIZATION_ID, TO_ORGANIZATION_ID.
GL_SETS_OF_BOOKS: Stores define set of books data in General Ledger. Each row
includes the set of books name, description, functional currency, and other data.
Corresponds to the Define Set of Books window. Primary key:
GENERAL_LEDGER_UPDATE_CODE.
GL_CODE_COMBINATIONS: Stores valid Accounting Flexfield segment value
combinations for each accounting flexfield structure within your General Ledger. Primary
key: CODE_COMBINATION_ID.

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Organization Tables

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HR_ALL_ORGANIZATION_UNITS: Stores generic data about organizations. An


organization can be used for various purposes in Oracle Manufacturing applications. For
example, one organization can represent a business group, an ECO department, a planning
organization, and an inventory organization. Primary key: ORGANIZATION_ID.

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Subinventories and Locator Tables


MTL_SYSTEM_ITEMS_B is the definition table for items. This table holds the
definitions for inventory items, engineering items, and purchasing items. The flexfield
code is MSTK. The primary key for an item is the INVENTORY_ITEM_ID and the
ORGANIZATION_ID. The same item could be defined in more than one organization.
Each row represents an item in an organization.
MTL_SYSTEM_ITEMS_TL: This table is holding translated Description column for
Items. The primary key is INVENTORY_ITEM_ID, ORGANIZATION_ID,
LANGUAGE.
GL_CODE_COMBINATIONS: This table stores valid Accounting Flexfield segment
value combinations for each accounting flexfield structure within your General Ledger
application. The primary key is CODE_COMBINATION_ID.
MTL_SECONDARY_INVENTORIES: This table is the definition table for the
subinventory. Subinventories are assigned to items, indicating a list of valid places in
which this item may be located. The primary key is
SECONDARY_INVENTORY_NAME, ORGANIZATION_ID.

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Subinventories and Locator Tables

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MTL_ITEM_SUB_INVENTORIES: This table maintains a listing of subinventories


assigned to an inventory or engineering item. The subinventories make up the valid list of
subinventories when transacting a specific item if the user has specified that the item must
use subinventories from a predefined list. The primary key is INVENTORY_ITEM_ID,
ORGANIZATION_ID, SECONDARY_INVENTORY.
MTL_ITEM_LOCATIONS: This table is the definition table for stock locators. The
associated attributes describe the subinventory to which this locator belongs, and the
locator physical capacity. The primary key is INVENTORY_LOCATION_ID.
MTL_SECONDARY_LOCATORS: This table stores all locators within a subinventory
for a specific item. The locators make up the valid list of locators when transacting that
specific item to/from the subinventory when the user has specified that the item must use
locators from a predefined list. The primary key is INVENTORY_ITEM_ID,
ORGANIZATION_ID, SECONDARY_LOCATORS.
MTL_PARAMETERS: This table stores the parameters for an inventory organization
with which an item is associated. The primary key is the ORGANIZATION_ID.
Subinventories and Locators Tables.

Item Master
MTL_SYSTEM_ITEMS_B: This table is the definition table for items. This table holds
the definitions for inventory items, engineering items, and purchasing items. The flexfield
code is MSTK. The primary key for an item is the INVENTORY_ITEM_ID and the
ORGANIZATION_ID. The same item could be defined in more than one organization.
Each row represents an item in an organization.
MTL_ITEM_ATTRIBUTES: This table stores the item attributes, their user-friendly
names if the item is maintained at the item or item/organization level, and the kind of
validation required for each attribute. This table is seeded on install or upgrade. The
primary key is ATTRIBUTE_NAME.
MTL_ITEM_TEMPL_ATTRIBUTES: This table stores the attributes and attribute values
for a template. When a template is created, a row is inserted for each available item
attribute. When the template is applied to an item, the enabled attribute values are
propagated to the item. The primary key is TEMPLATE_ID, ATTRIBUTE_NAME.
MTL_ITEM_STATUS_TL: This table is the definition table for a material status code.
The status code is a required item attribute and indicates the item status (for example,
active, pending, or obsolete). You may define as many additional status codes as you
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Item Master Tables

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want. The values of the individual status attributes associated with an item status are
stored in MTL_STATUS_ATTRIBUTE_VALUES. The primary key is
INVENTORY_ITEM_STATUS_CODE.
MTL_ITEM_TEMPLATES_B: This table is the definition table for item templates. It
contains the user-defined name and description. When the template is applied to an item,
the enabled item attributes are propagated to the item. The primary key is
TEMPLATE_ID.
MTL_STATUS_ATTRIBUTE_VALUES: This table stores the attribute values associated
with an item status code. One record is created for each of the function-enabling attributes
for each defined item status code. The primary key is
INVENTORY_ITEM_STATUS_CODE, ATTRIBUTE_NAME.
MTL_PARAMETERS: This table is an inventory organization with which an item is
associated. The primary key is the ORGANIZATION_ID.

Item Status Tables


MTL_SYSTEM_ITEMS_B: This table is the definition table for items. This table holds
the definitions for inventory items, engineering items, and purchasing items. The flexfield
code is MSTK. The primary key for an item is the INVENTORY_ITEM_ID and the
ORGANIZATION_ID. The same item could be defined in more than one organization.
Each row represents an item in an organization.
MTL_ITEM_ATTRIBUTES: This table stores the item attributes, their user-friendly
names if the attribute is maintained at the item or item/organization level, if the attribute is
controlled by an items status, and the kind of validation required for each attribute. The
primary key is ATTRIBUTE_NAME. This table is seeded on install or upgrade. The top
eight item attributes are as follows:
- Stockable
- Transactable
- BOM allowed
- WIP allowed
- Purchasable
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- OE Orderable
- Internal Orderable
- Billable
MTL_STATUS_ATTRIBUTE_VALUES: This table stores the attribute values associated
with an item status code. One record is created for each of the function-enabling attributes
for each defined item status code. The primary key is
INVENTORY_ITEM_STATUS_CODE, ATTRIBUTE_NAME.
MTL_ITEM_STATUS_TL: This table is the definition table for a material status code.
The status code is a required item attribute and indicates the item status (for example,
active, pending, or obsolete). You may define as many additional status codes as you
want. The values of the individual status attributes associated with an items status are
stored in MTL_STATUS_ATTRIBUTE_VALUES. The primary key is
INVENTORY_ITEM_STATUS_CODE.
MTL_PENDING_ITEM_STATUS: This table is used to define and store the history of
the item statuses that have been or will be assigned to an item. This table maintains the
status history for each item. This table also stores pending status information. The primary
key is INVENTORY_ITEM_ID, ORGANIZATION_ID, STATUS_CODE,
EFFECTIVE_DATE.

Item Categories Tables


MTL_SYSTEM_ITEMS_B: This table is the definition table for items. This table holds
the definitions for inventory items, engineering items, and purchasing items. The flexfield
code is MSTK. The primary key for an item is the INVENTORY_ITEM_ID and the
ORGANIZATION_ID. The same item could be defined in more than one organization.
Each row represents an item in an organization.
FND_ID_FLEX_STRUCTURES: This table stores structure information about key
flexfields. The primary key is APPLICATION_ID, ID_FLEX_CODE, ID_FLEX_NUM.
MTL_CATEGORIES_B: This table is the code combinations table for item categories.
Items are grouped into categories within the context of a category set to provide flexible
grouping schemes. The primary key is CATEGORY_ID. The item category is a key
flexfield with a flexfield code of MCAT.
MTL_CATEGORIES_TL: This table is a table holding translated Description column for
Item Categories. The primary key is CATEGORY_ID, LANGUAGE.
MTL_CATEGORY_SETS_B: This table contains the entity definition for category sets. A
category set is a categorization scheme for a group of items. Items can be assigned to

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different categories in different category sets, but can be assigned to only one category
within a category set. The primary key is CATEGORY_SET_ID.
MTL_CATEGORY_SETS_TL: This table is a table holding translated Name and
Description columns for Category Sets. The primary key is CATEGORY_SET_ID,
LANGUAGE.
MTL_CATEGORY_SET_VALID_CATS: This table defines the valid category list for a
particular category set. If category validation is required, the list of valid categories is
stored in this table and is used to restrict category selection for the category set. The
primary key is CATEGORY_SET_ID, CATEGORY_ID.
MTL_DEFAULT_CATEGORY_SETS: This table stores the identifier of the category set
that acts as the default for a particular functional area. This information is used to
determine the mandatory category sets for an item. It is also used to provide a default
category set for forms and reports that require a category set field value or parameter. The
primary key is FUNCTIONAL_AREA_ID, CATEGORY_SET_ID.
MTL_ITEM_CATEGORIES: This table stores the item assignments to categories within a
category set. For each assignment, this table stores the item, category set, and the
category. Items can be assigned to multiple categories and category sets, but can be
assigned to only one category in a given category set. This table is populated through
either the Define Item or the Update Item/Org Attributes forms. It can also be populated
by performing item assignments when a category set is defined. The primary key is
INVENTORY_ITEM_ID, ORGANIZATION_ID, CATEGORY_SET_ID.

Item Reservation Tables


MTL_DEMAND: This table stores demand and reservation information used in Available
to Promise, Planning, and other manufacturing functions. Four row types are stored in this
table:
- Summary Demand rows
- Dependent Demand rows
- Open Demand rows
- Reservation rows
- The primary key is INVENTORY_ITEM_ID, DEMAND_SOURCE_TYPE,
DEMAND_SOURCE_HEADER_ID, DEMAND_SOURCE_LINE (o),
DEMAND_SOURCE_DELIVERY (o), COMPONENT_SEQUENCE_ID (o).
MTL_SALES_ORDERS: This table stores the Oracle Inventory local definition of sales
orders and maps sales orders between Oracle Inventory and other Oracle Manufacturing
applications. The primary key is SALES_ORDER_ID.
OE_ORDER_HEADERS_ALL: This table stores header information for orders in Oracle
Order Management. The primary key is HEADER_ID.
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OE-ORDER_LINES_ALL: This table stores information for all order lines in Oracle
Order Management. The primary key is LINE_ID.
GL_CODE_COMBINATIONS: This table stores valid Accounting Flexfield segment
value combinations for each accounting flexfield structure within your General Ledger
application. Available material can be reserved against a valid Accounting Flexfield
combination. The primary key is CODE_COMBINATION_ID.
MTL_GENERIC_DISPOSITIONS: This table stores the user-defined account alias. An
account alias provides a method to use accounting numbers and makes it easier to transact
account issues and receipts. Available inventory can be reserved against an account alias.
The primary key is DISPOSITION_ID, ORGANIZATION_ID.
MTL_MATERIAL_TRANSACTIONS: This table stores a record of every material
transaction or cost update performed in Inventory. An issue transaction to an account
number or account alias can relieve a reservation against the account number or alias. The
primary key is TRANSACTION_ID.
MTL_DEMAND_INTERFACE: This table is the interface point between non-Inventory
applications and the Oracle Inventory demand module. Records inserted into this table are
processed by the Demand Manager concurrent program.
MTL_SYSTEM_ITEMS_B: This table is the definition table for items. This table holds
the definitions for inventory items, engineering items, and purchasing items. The primary
key for an item is the INVENTORY_ITEM_ID and the ORGANIZATION_ID.

Inventory Transaction Tables


MTL_TRANSACTIONS_INTERFACE: This is the interface point between nonInventory applications and the Inventory transaction module. The Transaction Manager
concurrent program polls this table at a user-specified process interval and submits the
transaction workers to process them. Processing consists of data derivation, validation,
and transfer of records from MTL_TRANSACTIONS_INTERFACE,
MTL_TRANSACTION_LOTS_INTERFACE, and
MTL_SERIAL_NUMBERS_INTERFACE into their respective TEMP tables, from where
they are processed by the transaction processor.
MTL_MATERIAL_TRANSACTIONS_TEMP: This table is the gateway for all material
transactions. Records are processed from this table into Inventory through the transaction
processor. All Inventory transaction forms write directly to this table. Outside applications
must write transaction records to MTL_TRANSACTSIONS_INTERFACE TXN
Processor makes use of TXN worker to process the transactions from
MTL_TRANSACTIONS_INTERFACE to
MTL_MATERIAL_TRANSACTIONS_TEMP and from
MTL_MATERIAL_TRANSACTIONS_TEMP to
MTL_MATERIAL_TRANSACTIONS..
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MTL_MATERIAL_TRANSACTIONS: This table stores a record of every material


transaction or cost update performed in Inventory. Records are inserted into this table
either through the transaction processor or by the standard cost program. The primary key
is TRANSACTION_ID.
MTL_TRANSACTION_ACCOUNTS: This table holds the accounting information for
each material transaction in MTL_MATERIAL_TRANSACTIONS. Oracle Inventory
uses this information to track the financial impact of your quantity moves.

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Summary

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