Oracle SCM Functional Interview Questions & Answers - Set-02

INVENTORY

1.    What is an item?

An item is a part or service which you can Purchase, Sell, Plan, Manufacture, Stock, Distribute and Prototype.
Items can also be containers for items as well as components you build into other items.

2.    Explain Item Master Organization?

An item master organization is a logical entity where you define the item. After you define an item in the item master, you can assign it to any number of other organizations.

3.    Define Inventory Organization?

It is a facility which will enable you to store and transact the items. It can be a manufacturing unit, ware house, distribution center etc.

4.    What is a sub-inventory?

Sub-inventories are unique physical or logical separations of material inventory. These can be raw material, finished goods or defective material sub-inventory. You must define at least one sub-inventory. Sub-inventories are of two types: storage and receiving

Storage Sub-inventories are intermediate or final put away locations for material.
Material that resides in a storage sub-inventory appears in on hand quantity and is tracked by the system.
The system can book orders against, and use manufacturing processes on material that resides in a storage sub-inventory.
You must define at least one storage sub-inventory for your implementation.

Receiving type sub-inventory is only used for receiving items.
Items in this Sub-inventories cannot be on-hand or reserved

5.    In which table does the sub-inventory related information for an item is stored?

MTL_ITEM_SUB_INVENTORIES

6.    What is a stock locator?

Locators are structures within Sub-inventories.
Locators are the third level in the enterprise structuring scheme of Oracle Inventory. Locators may represent rows, racks, or bins in warehouses.
You can transact items into and out of locators.
You can restrict the life of locators, establish capacity of a specific locator in weight or units, as well as specify dimensions which define a locator’s capacity by volume.

7.    What are flex fields in Oracle EBS?

A flexfield is a field made up of sub-fields, or segments.

Ø  There are two types of flexfields: key flexfields and descriptive flexfields.

Ø  A key flexfield appears on your form as a normal text field with an appropriate prompt.

Ø  A descriptive flexfield appears on your form as a two-character-wide text field with square brackets [ ] as its prompt.

Ø  When opened, both types of flexfield appear as a pop-up window that contains a separate field and prompt for each segment. Each segment has a name and a set of valid values. 

8.    What are the Key flex fields in oracle Inventory?

Oracle Inventory provides the following Key flex fields:

1.       System Items

2.       Item Catalogs

3.       Item Categories

4.       Stock Locators

5.       Account Alias

6.       Sales Order

9.    What are the basic steps involved in defining an item?

                     i.      Create an item in the item master form.

                    ii.      Copy the template from the tools menu to assign specific attributes to the item and save it.

                  iii.      Assign the item to a category from tools menu and save your work.

                  iv.      Select organization assignment from tools menu and assign the item to different inventory organizations by ticking the checkbox next to the inventory organizations.

10. What are item attributes?

Item attributes are the collection of information about an item.

·   These are used to store specific characteristics of an item, such as item status, unit of measure, revision control, etc. these can be controlled at either the master or the organization level.

·   These attributes are stored in a table named MTL_ITEM_ATTRIBUTES

11. What is the use of item template?

·   An Item template is a set of attributes that enable the user to quickly create an Item.

·   You can use the existing templates or you can create your custom template.

12. What is an item category and category set?

·   A category is a logical classification of items that have similar characteristics.

·   A category set is a distinct grouping scheme and consists of multiple categories.

·   An item can belong to any number of category sets.

·   We can assign item to one category within each category set.

The categories can be retrieved from the table “MTL_CATEGORIES_B” and item category set from “MTL_CATEGORY_SETS_B”.

13. Explain unit of measure (UOM) and UOM class?

The unit of measure (UOM) helps us count the number of items involved in a transaction or the number of items that are stored in a sub-inventory or a locator.

UOM classes let you group different UOM’s into one category. Eg, quantity could be a UOM class under which each, dozen, lot etc are separate UOM’s.

14. Explain 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, it cannot be used in a shipping network.

15. Describe Inter-Organization Shipping Networks

                     i.            An inter-organization shipping network describes the relationships and accounting information between a shipping organization and a destination organization.

                    ii.            You must define a shipping network between two organizations before you can transfer material between organizations.

                  iii.            When you set up a shipping network you must select a transfer type: Intransit or Direct.

Intransit:

·   Oracle Inventory moves material to an intermediary state before it reaches the destination organization.

·   After the material arrives at the destination organization, you will need a receipt transaction to retrieve it.

·   If intransit is selected, you can define: Shipping Methods, GL Accounts to use in transit, Material ownership during transfer, Planning lead times and Transfer Charges

Direct:

·   Oracle Inventory moves the material directly to the destination organization.

However, for both transfer types, you can determine default receipt routing and whether internal orders are required to transfer material.

16. In which tables are the transactional details are stored?

·   MTL_TRANSACTIONS_INTERFACE

·   MTL_MATERIAL_TRANSACTIONS

·   MTL_MATERIAL_TRANSACTIONS_TEMP

·   MTL_TRANSACTION_ACCOUNTS

17. What is revision control in Oracle Inventory?

A revision is a particular version of an item, bill of material, or routing. Revision control is normally enabled for identifying a modified item.

Item can be placed under revision control by checking the box `Revision control` in Inventory tab while defining new item or for existing item. Base table for Item Revision is MTL_ITEM_REVISIONS.

18. What is Picking Order of Sub-inventory or Locator? Where will you define the order?

The value indicates the priority with which we pick items from sub-inventory or Locator, relative to another sub-inventory or locator, where a given item resides. A picking order of 1 means that order entry functions pick items from the sub-inventory or locator before others with a higher number (such as 2,3 and so on).

The sub-inventory order is defined in the sub-inventory definition and the locator order is defined in the locator definition. The default order for both the sub-inventory and the locator are defined in the organization.

19. What are the different inventory transactions?

A transaction is an item movement within, into or out of inventory.
A transaction changes the quantity and location of an item

The following are the different inventory transactions:

                           i.      Receive an item into an organization from GL account number

                          ii.      Issue an item from an organization into a GL account number

                        iii.      Transfer items from one sub-inventory to other in the same organization.

                        iv.      Transfer of items between various inventory organizations

                         v.      Reservation of items

20. Describe various inventory transaction types?

         i.      Miscellaneous Transaction: This transaction is used to do adjustments in stock due to damage, obsolescence, issuing items for R & D or issuing track able expense items.

        ii.      Sub-Inventory Transfer: This transaction is used to transfer goods from one sub-inventory to another within the same inventory organization.

      iii.      Inter-Org Transfer: This transaction is used to transfer goods from one inventory organization to another.

      iv.      Receiving Transaction: This transaction is used to move goods from receiving dock to specified sub-inventory and locator.

       v.      Sales Issue: This transaction is used to move goods from pick sub-inventory to staged sub-inventory.

      vi.      WIP Issue: This transaction is used to issue materials against production orders

21. What is the difference between a sub-inventory transfer and a move order?

Both these transactions are used for the movement of items from one sub-inventory to the other. The difference is that move order generates a pick slip and a sub-inventory transfer doesn’t.

Move order requires ‘approval’. Also, move orders create allocations. So you can place hold on the material with the intention of picking it up a little later. In sub-inventory transfer, there is no reservation / allocation.

22. What are the Components used in Customizing a Transaction?

The following are the three components used in a transaction

                           i.      Transaction Source Type

                          ii.      Transaction Action

                        iii.      Transaction Type

A Transaction Source Type and a Transaction Action come together to form a Transaction Type.

23. What is a Transaction source type?

A Transaction Source Type is defined as an entity against which Oracle Inventory charges a transaction. The following transaction source types come seeded with Oracle Inventory:

1.       Purchase Order

2.       Account Alias

3.       Move Order

4.       Internal Order

5.       Standard Cost Update

6.       Internal Requisition

7.       Sales Order

8.       Cycle Count

9.       Periodic Cost Update

10.    Physical Inventory

11.    Account

12.    RMA (Return Material Authorization)

13.    Inventory

14.    Job or Schedule

24. What is a transaction type?

A transaction type is a combination of a transaction source type and a transaction action. It is used to classify a particular transaction for reporting and querying purposes. Ex:

Sales order issue (txn type) + issue from stores (txn action) = sales order (txn source type)
Move order transfer (txn type) + sub-inventory transfer (txn action) = move order (txn source type)

25. Name any four purposes where miscellaneous transaction can be used?

1.       Cycle count adjustment

2.       Physical inventory adjustment

3.       Adjusting inventory quantity within an inventory organization &

4.       Decrementing on-hand balances from a Sub-Inventory

26. Explain inventory control?

Inventory Control is the process by which inventory is measured and regulated according to predetermined norms such as economic lot size for order or production, safety stock, minimum level, maximum level, order level etc.

27. What are the objectives of inventory control?

·         To meet unforeseen future demand due to variation in forecast figures and actual figures.

·         To average out demand fluctuations due to seasonal or cyclic variations.

·         To meet the customer requirement timely, effectively, efficiently, smoothly and satisfactorily.

·         To smoothen the production process.

·         To facilitate intermittent production of several products on the same facility.

·         To gain economy of production or purchase in lots.

·         To reduce loss due to changes in prices of inventory items.

·         To meet the time lag for transportation of goods.

·         To meet the technological constraints of production/process.

28. What are the factors that affect inventory control?

1.       Type of product

2.       Type of manufacture

3.       Volume of production

29. Define ABC analysis?

ABC analysis determines the relative value of a group of inventory items based on a user specified valuation criterion.

This technique divides inventory into three categories A, B & C based on their annual consumption value.

It is also known as Selective Inventory Control Method (SIM)

30. What is consignment inventory?

Consignment Inventory is inventory that is in the possession of the customer, but is still owned by the supplier. In other words, the supplier places some of his inventory in his customer’s possession (in their store or warehouse) and allows them to sell or consume directly from his stock. The customer purchases the inventory only after he has resold or consumed it. The key benefit to the customer should be obvious; he does not have to tie up his capital in inventory. This does not mean that there are no inventory carrying costs for the customer; he does still incur costs related to storing and managing the inventory

31. 30. What are the different planning methods available in Oracle?

                     i.      Re-order point planning

                    ii.      Min-Max planning

                  iii.      Kanban cards

                  iv.      Sub-inventory replenishment planning

32. When should the material be ordered?

When on-hand quantity + supply – demand is less than safety stock (safety stock is nothing but minimum inventory level)

[On-hand quantity] + [supply] – [demand] < [min inventory level]

33. Explain re-order point planning?

Reorder point planning uses demand forecasts to decide when to order a new quantity to replenish inventory. Reorder point planning suggests a new order for an item when the available quantity (on-hand quantity plus planned receipts) drops below the item’s safety stock level plus forecast demand for the item during its replenishment lead-time. The suggested order quantity is an economic order quantity that minimizes the total cost of ordering and carrying inventory. Oracle Inventory can automatically generate requisitions to inform your purchasing department that a replenishment order is required to supply your organization.

If the forecast is correct and the order arrives on time, the inventory level should be right at the safety stock level at the time of receipt. In cases where the desired safety stock level changes during the order lead time, Oracle Inventory uses the largest safety stock quantity during the lead-time.

When an order is triggered, the EOQ is the size of the triggered order.

EOQ = square root of: [(2 X annual demand X order cost) / (carrying cost percent X Unit cost)]

Oracle Inventory calculates annual demand as the current demand rate annualized by multiplying the current period demand forecast by the number of periods per year (12 or 13).

Reorder point planning can be performed at the organization level only.

34. Explain min-max planning technique?

Min-Max planning is a tool for planning inventory that looks at user-defined minimum and maximum inventory levels. It does not consider lead times.

We can perform this technique at org level or sub-inventory level

35. Define cycle counting and explain its use in oracle inventory?

Cycle Counting is a process of periodic counting of individual item / all the items throughout the course of the year to ensure the accuracy of inventory quantities and values.

We can do the cycle counting at Organization / Sub Inventory Level.

Cycle count is used to:

·         To reconcile system on-hand balances with actual counts in inventory

·         Maintain control over the items that have higher value

36. When do you perform physical inventory and explain the steps involved in it?

Physical inventory can be performed, whenever there is a need to verify the accuracy of system on-hand quantities. This can be done for entire organization or can be confined to a specific sub-inventory.

·         Steps to perform physical inventory:

·         Define physical inventory

·         Take a snapshot of system on-hand quantities

·         Generate physical inventory tags

·         Enter counts

·         Do physical inventory adjustments by approving or rejecting

·         Post adjustments

·         Purge physical inventory information

37. What are different planning methods in Inventory?

There are 5 different planning methods in oracle Inventory

                  i.    Sub-inventory Replenishment Planning

                 ii.    Min Max Planning

                iii.    Re-order point planning

                iv.    Kanban Planning

                 v.    Periodic Automatic Replenishment

38. What are the setups for different planning method (Min-Max)?

                  i.    Setup the item in master org and assign the item to the org for which Min-Max planning is used

                 ii.    Attributes, Inv Planning method: Min-Max

                iii.    Min-Max Qty should have been defined

                iv.    Safety Stock method should be non MRP Planned

                 v.    Determine what should be the status of the Requisitions created for the planning

Do this with profile option INV: Minmax Reorder Approval

·         IF Use ASL has been enabled, then Requisition will populate the supplier data from the ASL setup which is assigned to the item

Sourcing rules can be defined for this

Then need to assign sourcing rule to the item

·         In Inventory responsibility, under Planning run the Min Max planning report with required parameter

39. What is the concurrent program for the planning?

Min Max planning report under planning menu in Inventory responsibility.

40. What are the setups for expense item?

·         Should not be Inventory Item

·         No Stockable

·         No Transactable

·         No Costing, Inv Asset

41. What is the use of sales order KFF?

·         This is used during material transaction when source is Sales Order

·         Segments are Sales order Number.Sales Order Type.Sales Order Source

42. How we can have the item key flexfield with 2 segments, is it possible, if yes then how, if no then why?

·         This can be modified using Flexfield>Key> Segments

·         Query the System Items, then you can modify the existing structure, or you can add a new one.

43. How will you inactivate the Inventory locations?

·         By giving Inactive date in the Location form

44. What all setups you have done in inventory organization implementation?

·         Location

·         Calendar

·         Organization

·         Parameter

·         Cost Group

·         Sub-Inventory

·         Stock Locator

·         Receiving Options

·         Shipping Networks

·         Intercompany Transaction flows

·         Cost Subelements

45. What are the various valuation accounts used in Inventory?

·         Material

o    An asset account that tracks material cost. For average costing, this account holds your inventory and intransit values. Once you perform transactions, you cannot change this account.

·         Material Overhead

o    An asset account that tracks material overhead cost.

·         Resource

o    An asset account that tracks resource cost.

·         Overhead

o    An asset account that tracks resource and outside processing overheads.

·         Outside processing

o    An asset account that tracks outside processing cost.

·         Expense

o    The expense account used when tracking a non-asset item

Other Accounts

·         Sales

o    The profit and loss (income statement) account that tracks the default revenue account.

·         Cost of Goods Sold

o    The profit and loss (income statement) account that tracks the default cost of goods sold account.

·         Purchase Price Variance

o    The variance account used to record differences between purchase order price and standard cost. This account is not used with the average cost method.

·         Inventory A/P Accrual

o    The liability account that represents all inventory purchase order receipts not matched in Accounts Payable, such as the uninvoiced receipts account.

·         Invoice Price Variance

o    The variance account used to record differences between purchase order price and invoice price. This account is used by Accounts Payable to record invoice price variance.

·         Encumbrance

o    An expense account used to recognize the reservation of funds when a purchase order is approved.

·         Average Cost Variance

o    Under average costing with negative quantity balances, this account represents the inventory valuation error caused by issuing your inventory before your receipts.

46. What is ABC Analysis and why it is being used?

·         ABC Analysis is an Inventory categorization method to categorize items into 3 different classes A being the most valuable and C being the least valuable ones.

·         Using this Analysis, it will be easy to monitor and keep on track of the valuable items like frequently doing cycle counts on A class items, etc.

47. What is the process of cycle count?

·         Create a cycle count header with required data

·         Assign the items to be counted

·         Then run the required cycle count report

·         Using the report do the cycle counts

·         Then go and Approve the cycle count

48. What are the differences in MO Issue and MO Transfer?

·         MO Issue will move out the stock from inventory against an account

·         MO transfer will move the stock from one subinventory to other

49. What is the Picking rule in Inventory?

·         Picking Rule is used to determine the list of items for sales order/ shipping based on the revision, Lot, Subinventory and Locator.

·         Assign the required Picking Rule to the item in Order Management tab.

50. What are the criteria in Cycle count?

·         Depending on the requirement, we can trigger cycle count.

·         We can define regular cycle count of high values items.

·         If back ordered or pick denied, we can trigger cycle count for those items.

51. What are the differences in Lot and Serial?

·         Lot control is to control a whole batch of items. for example in drug industry we have batch number which can be controlled using lot where we can track the complete batch using specific data.

·         Serial control is to monitor and track every single qty of an item like electronic devices where we track by serial number.

52. What is material status in a sub-inventory?

·         Material Status control restricts the movement and usage of portions of on-hand inventory.

·         The 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:

o    Sub-inventory

o    Locator

o    Lot

o    Serial Number

53. What is Physical Inventory?

·         A physical inventory is done once a year to check and correct the accuracy of your inventory.  

·         In physical inventory we have to count all items.

·         physical count is done once an year or at the most twice for all the items.

·         We can have a snap shot

·         We can not view the qty in system

·         It is done for all the items.

·         Need to freeze inventory transactions.

·         Recount is not possible.

·         No recount, hence no history.

·         Adjustments can be done using adjustment concurrent program

54. What is move order in OM?

Move orders generated as part of Pick Wave are the ones from Sales order.

55. How a MO is different from Sub-inventory transfer?

MO generally are the request of movement of items in one organization.

·         It may be of from 3 sources, MO requisition, Replenish MO, Pick Wave MO.

·         MO can be MO Issue which will issue the item from the location

·         MO transfer which will transfer the item to another location.

56. What is nettable in Sub-inventory setup?

This will determine whether to consider the on-hands of the sub-inventory as available for planning tasks.

57. What are the status attributes in Item and how many of them

We can define different status for an item combination these attributes are selected as per the business need(s).

Following are the attributes

·         BOM Enabled

·         Build in WIP

·         Customer order enabled

·         Internal Order enabled

·         Invoicable

·         Purchasable

·         Stockable

·         Transactable 

58. What is the use of status attribute?

We can define different status for an item combination these are selected attributes as per the business need(s).

59. Why master org is required?

So that we can have an item maintained at master level with common attributes and then we can use the same item across multiple organizations instead of defining it again and again. 

60. Inventory Master Org is mandatory?

Yes. If you will not create any specific master org, then system will consider the same inv org as its master org.

61. What are the Lot control setups?

Lot control can be setup at item attributes at organization level.

Either No Control or Full Control

62. How lot number generates?

You can generate new Lot numbers during transactions

63. What is serial controlled and what are the setups?

Serial control can be setup at item attributes at organization level.

64. How serial numbers are generated?

Serial control can be setup at item attributes at organization level.

·         No Control

·         At Receipt

·         At Sales Order issue

·         Pre-defined.

65. What is the predefined locator in Sub-inventory and how it works in business?

We can setup locator control in 4 diff ways for each subinventory

None: There will not be any locator information required during any transaction

Prespecified: System will ask you to select locator combinations which already been defined in the subinventory during the transaction

Dynamic Entry: Either you can select any locator during transaction or you can create a new combination

Item Level: This will take the locator which has been defined at item attribute level

66. What are transaction managers?

Transaction manager is the interface manager which carries out all transactions once submitted by the users.

67. Can we change the item name after it created?

Ans: Yes we can change the name in master level.

68. Operating Unit 1 (OU1) has 3 Inventory orgs say M1, M2 and M3 and Operating Unit2 (OU2) has 3 Inventory orgs say S1,S2 and S3. OU1 & OU2 has different Set Of Books (SOB) and Legal Entity (LE). Now is it Possible to change the Operating Unit (OU) for Inventory Org S3 from OU2 to OU1.

If Possible, what are the Inventory Setup requirement needed? Also, what are all the financial impacts? [Complexity **]

No, it’s not possible to change an inventory org from one OU to another.

69. Please explain the concept of 'Genealogy' in Inventory Management? [Complexity **]

Genealogy is the maintained for all Lot controlled and Serial controlled items. Lot Genealogy tracks the relationship between lots and provides lot traceability that result from inventory transactions.

Serial genealogy tracks the transaction and multilevel composition history of any serial-controlled item from receipt through work in process and inventory to your customer sale. The composition genealogy is captured through material transactions in Oracle Work in Process.

70. During closure of inventory period, system throws an error stating pending transaction exist for this period? How to resolve this and close the Inventory period? [Complexity **]

Navigate to inventory accounting period, click on the pending task and identify the nature of the task which is pending and resolve as per issue.

71. What is concept of Multi-org? Whats the purpose of running concurrent request ‘Replicate Seed Data’? [Complexity **]

Multi-org means single installation of Oracle Applications will support multiple organizations with the use of different Set of Books. Multi-org supports any number of Legal Entities.

Replicate seed data is a concurrent program used to replicate the generic data attributes such as Supplier, customer header information across OUs. This program is typically run after creation of new OUs.

72. What’s the difference between Cycle counting and Physical inventory? [Complexity **]

Cycle counting is recurring and more often phenomena compared to Physical inventory. Cycle counting typically happens for A class items on periodic interval say every quarter.

Physical inventory is done on an annual basis for all items in the inventory.

73. What transactions would be available in Item Supply/Demand form? [Complexity *]

Demand such as Sales order booking

Supply such as Purchase orders, requisitions etc.

74. Which report should I run for viewing item on hand quantity across organization? [Complexity *]

Multi-organization Quantity Report

75. What are types of managers in Oracle? [Complexity *]

·         Cost Manager

·         Lot Move transaction Manager

·         Move Manager

·         Material manager

76. What’s the difference between nettable and non-nettable sub inventories? [Complexity *]

Nettable sub inventories are the only sub inventories which are used by MRP/ASCP engines for identification of any supply for an item

Non Nettable sub inventories are not considered by planning engines as sources of supply.

77. What transactions would be available in Transaction Open interface? [Complexity **]

·         Transaction Open interface is a key interface through which user can submit transactions.

·         Transaction open interface can process different transactions to do on hand conversions from legacy systems and do other transactions like sub inventory transfer, account alias issue / receipts etc.

·         The transactions could involve Lot and /or serial controlled items.

78. What’s the difference between Intra-class and Inter-class UOM conversions? [Complexity **]

·         UOM conversions that happen within the same UOM class (Quantity, Weight) are known as Intra-class UOM conversions. (Kg to Pounds)

·         UOM conversions that happen across UOM class are known as inter-class UOM conversions.

79. In Shipping Networks, whats the role of field FOB? [Complexity **]

Receipt: The shipping organization owns the shipment until the destination Organization receives it.

Shipment: The destination organization owns the shipment when the from Organization ships it (and while the shipment is in transit).

·         In EBS, Free on Board is specified in shipping network for the system to recognize the costing impact of inter-organization transaction.

·         If FOB is set as Shipment then costing of transaction would happen during sale order shipment.

·         If FOB is set as Receiving then costing of transaction would happen during Receipt of item in the requesting organization.

80. What is the purpose of Organization Access? [Complexity *]

Organization Access is used to restrict responsibilities to organization. Once this mapping is set up, a user logging into an Oracle Manufacturing product is restricted to the organizations mapped to the responsibility chosen.

81. Client doesn’t have business practice of issuing transactions that would drive inventory to have negative balances, how would you setup this requirement in EBS? [Complexity *]

In organization parameters form, ensure the Allow negative balance checkbox is not checked.

82. Can I perform Sub-inventory transfer to transfer items across organizations? [Complexity *]

Sub inventory transfer can be used to transfer items from one sub inventory to another within a single inventory organization.

PURCHASING

1.    What is 2-way, 3-way, 4-way matching? Can you give me an example of 2 way matching? [Complexity **]

2-way matching:

2-way matching verifies that Purchase order and invoice quantities must match within your tolerances as follows:

Quantity billed <= Quantity Ordered
Invoice price <= Purchase order price 

(<= sign is used because of tolerances)

Often used for services where no receiver is generated.

3-way matching:

3-way matching verifies that the receipt and invoice information match with the quantity tolerances defined:

Quantity billed <= Quantity received

4-way matching:

4-way matching verifies that acceptance documents and invoice information match within the quantity tolerances defined:

Quantity billed <= Quantity accepted.

(Acceptance is done at the time of Inspecting goods).

2.    Tell me difference between Job hierarchy and position hierarchy? What are the steps involved in setting up Position Hierarchy? [Complexity ***]

Job hierarchy is used when there is a single approval hierarchy system in the organization compared to Position hierarchy which is used if for the same job, multiple positional approvals are required i.e. Junior buyer’s requisition needs to be approved by senior buyer and senior buyer’s requisition is sent to Supply Chain manager and then to Finance manager for final approval.

In Position hierarchy, approval might happen between different positions for the same Job.

Setups required:

• Use Approval hierarchy must be checked in Finance Options

• Jobs must be defined

• Position must be defined and mapped to jobs

• Position hierarchy must be setup

• Position hierarchy must be mapped to Document type

• Define and assign Approval groups

• Assign employees

• Run Fill Employee hierarchy concurrent program

3.    What is the difference between bill of distribution and sourcing rule? [Complexity *]

Sourcing rule is used to determine the source of particular item i.e. Suppliers or source organization in an organization. Bill of distribution is used to determine how the item is distributed in an organization i.e. warehouses to which item are to be distributed.

4.    A buyer is authorized to approve PO worth 5000 but though the PO is below 5000, he’s not able to approve it? Which setup are we missing? [Complexity *]

·         There might be restriction on the item, category or account combination that would prevent a particular user not approve a PO.

·         Check if approval workflow is running

·         If any changes have been done to position or Job, has the Fill employee hierarchy program been run to update these positions

·         If Employee supervisor hierarchy is set, is the supervisor a valid and active employee.

·         Are multiple users mapped to same employee?

5.    We provide ranks and allocations in Sourcing Rules to Suppliers or Inventory organizations, what is the use of these ranks and allocations and where is it used? [Complexity **]

Ranks and allocations are used by MRP or ASCP modules to create supply based on the ranks provided. If a requisition needs to be created for a demand of an item, then system checks the sourcing rule and creates a requisition to the Rank 1 supplier and based on the allocation percentage specified.

For example, if demand for an item X, is to be satisfied by creating a requisition, then system looks at the sourcing rule, if two suppliers are given Rank 1 and allocation as 70% and 30% then system creates two requisition lines, one for 70% of supply quantity from supplier 1 and other for 30% of supply quantity from supplier 2.

Total of allocation for each rank must sum up to 100 for the sourcing rule to be planning active.

6.    Client requires every Purchase order to have paper based Requisition number entered mandatory in Create Purchase order screen by users [Client doesn’t want to create Requisition in APPS and use Auto-create functionality in this scenario]. How to handle this requirement? [Complexity **]

Enable a DFF at PO line level and make the DFF mandatory to be entered by user for each line.

7.    What is the difference between Blanket Purchase Agreement and Contract Purchase Agreement? [Complexity **]

·         Blanket purchase agreements carry detail of the goods or services you plan to buy from a specific supplier in a period, but you do not yet know the detail of your delivery schedules.

o    You can use blanket purchase agreements to specify negotiated prices for your items before actually purchasing them.

·         Contract purchase agreements are created with your suppliers to agree on specific terms and conditions without indicating the goods and services that you will be purchasing.

o    You can later issue standard purchase orders referencing your contracts

8.    Client requires control over procurement for each department. Is it possible in EBS to handle such a requirement? [Complexity **]

Yes, Using Encumbrance functionality, Each department can be allocated a specific amount and purchasing would honor this and ensure system doesn’t approve PO more than the budgetary amount.

9.    What are the types of receipts and their functions in Purchasing? [Complexity **]

There are no distinct types of receipts as we find in PO documents (Requisition, Quotation, Purchase order etc). Receipts differ mainly by the method of recording the receiving transactions.

1)       Unordered receiving

2)       Blind receiving

3)       Express receiving

4)       Substitute receiving

10. 10. For an OSP Sub-assembly, when you move transaction to the 'Queue' of an OSP Operation, Requisition Import is fired which creates an Approved Requisition and an Unapproved PO. What are the setups that govern creation of PO? [Complexity **]

Sourcing Rule needs to be defined for the item. The sourcing rule needs to be mapped to item and organization under an assignment set.

11. 11. When does a Purchase order or requisition goes into ‘Pre-Approved’ status? [Complexity *]

• A person with the final authority to approve the document approves it, but then forwards it to someone else for additional approval, thus changing its status to Pre–Approved.

• Your organization uses encumbrance (reserves funds for documents), and the document is authorized for approval but funds have not yet been reserved for it. Even if someone with sufficient approval authority approves the document, its status may still be Pre–Approved if funds were not able to be reserved at the time of approval. Once funds are reserved for the approved document, the document changes its status to Approved.

12. If the preparer of purchase requisition is not authorized to Approve that requisition then what setup should be performed in the system to achieve this? [Complexity *]

In document type, set Owner can approve flag to No

13. How do I ensure if Purchase order is cancelled then corresponding requisition is also cancelled? [Complexity *]

In Purchasing Option, Set Cancel requisition to ‘Optionally’ or ‘Always’.

14. What is the functionality I am achieving by setting Receipt close % as 100 %? [Complexity *]

Receipt close % ensures that PO line ordered quantity is closed up to that specified percentage. If Receipt close point is set as 60% and if Order quantity is 100 then if PO receipt is made for 40 quantities then PO line would be moved to closed status automatically,

15. Client wants each requisition auto created in the system to be grouped by Buyer, how to achieve this in EBS? [Complexity *]

In Purchasing option, Set requisition group by parameter to ‘Buyer’

ORDER MANAGEMENT

1.    What is move order in Order Management?

Move orders generated as part of Pick Wave are the ones from Sales order.

2.    How is move order different from Sub-inventory transfer?

Move Orders generally are the request of movement of items in one organization. It may be of from 3 sources, MO requisition, Replenish MO, Pick Wave MO. MO can be MO Issue which will issue the item from the location and MO transfer which ll transfer the item to another location.

3.    Client operates in a retail shop environment where most of the goods sold are to the walk-in customers and wants to use Oracle Order Management. What are the configurations to be done to support such businesses where quick order entry, entering existing or new customers with ease, no elaborate picking and shipping process is required?

Workflow of type ‘Bill and Ship only’ depending on client’s requirement. Quick Sales order form can be used to facilitate order details entry. Generic customer can be defined to account for walk-in customers.

4.    What’s the use of specifying alternate items in Order Management?

System facilitates order entry user to choose between items which are set as Alternates based on attributes such as ATP etc. Hence alternate items can be booked if original item is not available as per customer timelines.

5.    Client requires a single delivery for all orders of a customer, what setups needs to be done for such a requirement?

In Shipping Parameter, set delivery grouping parameter to Customer and Auto create Delivery criteria as ‘Across Orders’.

6.    What are Back-to-Back orders and what are the setups involved?

Back to Back orders are orders for which items booked in Sale order is not available in Inventory and system creates a purchase requisition and tracks the item through creation of Purchase order from the requisition and finally when PO receipt is made for the item, the receipt quantity is reserved against the sale order.

Setups include definition of item with attributes such as ‘Built in WIP’ and ‘Assemble to order’ set to Yes. Sourcing rule needs to be defined for the item and sourcing rule should be mapped to MRP: Assignment set.

7.    What are ATO and PTO items?

ATO and PTO are types of Item which are used in OM and Configurator mainly.

ATO or Assemble to Order items are typically items that are built as per the customer’s requirement.

·         Hence ATO model is entered in Sales order and end items are chosen from the configurator window.

·         The workflow of the item creates a Discrete job and chosen item is built in WIP.

·         Once the Discrete job is complete, the item is available in OM for picking and shipping.

PTO or Pick to order items are items which are picked from inventory based on customer requirements and then picked and shipped.

8.    What are the typical reasons for a line to get backordered during Pick Release?

Primary reasons for line to be backordered are

1.       Item is not available in inventory

2.       Inventory period is closed

3.       Holds are placed against the order or order line.

9.    What is the purpose of Trips and Stops?

A trip is an instance of a specific freight carrier departing from a particular location containing deliveries.

A trip is carrier specific and contains at least two stops such as a stop to pick up goods and another stop to drop off goods, and may include intermediate stops.

10. Client wants to ensure that a particular item when placed in a Sale order is not processed until Inspection happens and approval is given, how to setup such a requirement?

Create a Hold Source and specify Hold criteria as Item and criteria value as the item name.

11. How to setup Drop shipment cycle in OM?

Oracle Order Management and Oracle Purchasing integrate to provide Drop Shipments. Drop Shipments are orders for items that your supplier ships directly to the customer either because you don't stock or currently don't have the items in inventory, or because it's more cost effective for the supplier to ship the item to the customer directly.

In the sale order, specify the Source type as External. Purchase Release program should be run and post this program, requisition import program should be run.

12. What is the purpose of Interface Trip Stop?

Interface Trip Stop creates the sales order issue transaction and thereby depletes the inventory to the sale order shipped quantity. As part of ITS, COGS account gets generated.

13. What is RMA and what are the scenarios when RMA cycle would be used?

If I have shipped an order via Order Management to a wrong customer or the wrong item/quantity has been shipped, then I will do an RMA transaction in Inventory to bring the item back. This will generate a credit memo in AR.

If the customer finds that item is faulty or defective, then he returns the shipment to us. In this case too, we will create an RMA in Inventory and receive the item back. This again creates a credit memo.

14. How to setup credit hold in Order Management?

Credit hold setups include setting up;

Customer site level – Credit check must be enabled, Amount and currency must be specified

Payment term – Credit check must be enabled

Credit check rule – Credit check rule must be defined.

Order type – Credit check Rule must be mapped as required

15. How to setup quantity discounts in Price lists?

Quantity discounts are handled by specifying Price breaks by giving quantity and corresponding price applicable.

16. What is the purpose of scheduling a sale order?

·         Scheduling a sales order ensures that line is available for Picking and further transactions applicable.

·         Also, Scheduling looks at sourcing rules to determine the source of the item specified in order line.

·         Scheduling honors Promise date and Latest Acceptable date whichever is applicable as per setups.

17. What are processing constraints in OM?

Processing constraints ensure that user doesn’t violate any business process or system defined process by putting checks on various actions performed by user.

Typically actions such as cancelling orders are governed by processing constraints.

WIP

1.    What are the differences between standard and non-standard discrete jobs?

Non-standard jobs are similar to standard jobs, however, there are noteworthy differences including:

• Non-standard jobs are more flexible than standard jobs. Because of this they can be used to manage such varying activities as rework, field service repair, upgrades, disassembly, maintenance, engineering prototypes, and other miscellaneous projects.

• Oracle planning products do not create planned orders or reschedule recommendations for non-standard jobs. You must manually define and reschedule non-standard jobs. However, if a non-standard job is assigned an assembly bill of material, a routing, or both, planning considers the job's material requirements as demand and its assemblies as supply.

• Oracle planning products do not deduct scrapped assemblies from the MRP net quantity, or deduct the MRP net quantity by the item shrinkage rate for non-standard jobs. As such, you must identify planned assembly shrinkage by entering an MRP net quantity that is less than the job quantity.

2.    What is the difference between Discrete and Repetitive manufacturing?

Standard discrete jobs control the material, resources, and operations required to build an assembly and collect its manufacturing cost.

Non-standard discrete jobs control material and collect costs for miscellaneous manufacturing activity. They may or may not build an assembly. This type of activity can include rework, field service repair, upgrade, disassembly, maintenance, engineering prototypes, and other projects.

3.    What is the purpose of using WIP accounting class?

Standard discrete accounting classes can be used to group job costs.

For example, if you build subassemblies and finished goods, you can define your accounting classes so that you can separately value and report the costs associated with subassembly and finished goods production. Standard discrete accounting classes can be automatically defaulted when you create discrete jobs.

4.    What is back flushing?

When you complete assemblies, all components with the supply type of Assembly pull are automatically backflushed. When components for assemblies under lot control, serial number control, or lot and serial control are backflushed upon assembly completion, you must assign lot and/or serial numbers to the components.

Backflush components are issued in the quantity and item as defined on the bill of material.

5.    What would be scenario if the Discrete job on which OSP operation exists is closed before the receipt of OSP item?

If Discrete job which has OSP operation is closed before receipt of the OSP item, then the resource transaction would cost this transaction would error out.

Typically, system warns the user when user tries to close such discrete jobs.

6.    What is the criteria system checks when linking Sales order to Discrete job?

When linking ATO sales orders and jobs, however, the following rules are applied:

• Assembly item cannot be a Pick-to-order item

• Sales order line item must be demanded, but not yet shipped

• Assembly item must be a standard item or an ATO item, not a model or an option

7.    What is Outside processing? What are the modules involved in OSP?

Oracle Manufacturing enables you to include supplier-sourced components and resources in your manufacturing processes. Features include:

·         Using specialized supplier skills in your manufacturing process to help lower engineering and manufacturing costs and increase production quality

·         Using supplier capacity to increase your overall production capacity.

·         Outside processing items represent supplier-sourced items, resources, and services that you include in your build process.

·         These items can be non-stocked items which represent the actual supplier contribution in your build process or you can define the assembly itself as an outside processing item.

·         The outside processing item is the item on your requisition or purchase order and the item you receive in your purchase order receipts.

Modules involved are Inventory, Purchasing and WIP

8.    What is the difference between Detailed Scheduling and Dynamic lead-time offsetting?

WIP Scheduling uses routing details for calculation job/operation start and end dates. This is called "Detailed Scheduling".

If you are using MRP/ASCP, Dynamic lead time offsetting is the scheduling method used and it uses the Fixed and Variable lead time defined in Item master.

9.    If OSP requisition needs to be generated at the time of move transaction to that particular operation then what are the setups required for handling this scenario?

In WIP parameters form, specify Requisition creation time as At Operation.

10. Client wants to track the value of transactions that is being scrapped during an operation, what are the setups required to handle this scenario?

In WIP parameters form, specify one of the inter-operations steps as Scrap and Require Scrap account is checked.

BOM

1.    What is bill looping? How would you check for any looping in bills?

Bill loops occur when a bill is assigned as a component to itself somewhere in the multilevel structure of the bill. The loop check program searches for such loops.

2.    What is meant by Charge type in a Resource definition?

Charge type determines how each resource is charged in Work in Process. When an operation completes, Work in Process records the units applied to the job or repetitive schedule in the resource unit of measure. You can charge resources manually or automatically.

• Manual: Work in Process does not automatically charge this type of resource to a job or repetitive schedule. You must manually charge it to a job or repetitive schedule using Work in Process.

• PO Receipt: Automatically charge this resource upon receipt of a purchase order in Oracle Purchasing. The assemblies are not automatically moved to the next operation upon receipt, so you must manually move them using Work in Process.

• PO Move: Automatically charge this resource upon receipt of a purchase order in Oracle Purchasing and move the assemblies to the Queue intraoperation step of the next operation, or to the To move intraoperation step if this is the last operation.

• WIP Move: Work in Process automatically charges this type of resource to a job or repetitive schedule when you complete an operation.

3.    3. What are supply types available for BOM in EBS?

A bill of material component field that controls issue transactions from inventory to work in process. Supply types supported by Work in Process include: Push, Assembly pull, Operation pull, Bulk, Supplier, Phantom, and Based on bill.

4.    What is extended quantity in BOM?

Extended quantity takes into consideration scrap resulting from operations performed. Scrap is modeled in the system by specification of shrinkage rate.

The extended quantity of the component used in the parent item is calculated as follows:

((explosion quantity of parent item x component usage quantity) / component yield) / (1- shrinkage rate for parent)

5.    What is Alternate resource? How to setup Alternate resource?

Alternate resources can be defined for each resource. You can define an alternate resource or set of alternate resources to describe a different manufacturing step used to produce the same product. Alternate resource is set at Routing > Operation Resource level.

6.    What is Common BOM? How to create Common BOM?

An assembly that uses the bill of material of another assembly as its bill. This enables you to reduce your maintenance effort by sharing the same bill structure among two or more assemblies. For example, if you have identical bills of material that produce the same product in two different organizations, you can define common bills of material for the identical structures.

Common BOM are created based on primary BOM by specifying the organization to which the BOM needs to be referenced.

7.    What is Planning Bill of Materials?

A bill of material for a planning item that contains a list of items and planning percentages. You can use a planning bill to facilitate master scheduling and/or material planning. The total output of a planning bill of material is not limited to 100% (it can exceed this number by any amount).

8.    What is Simulation Sets?

A group of capacity modifications for resource shifts to simulate, plan, or schedule capacity.

9.    What is difference between Cumulative Manufacturing lead time and Cumulative total lead time?

Cumulative manufacturing lead time

The total time required to make an item if you had all raw materials in stock but had to make all subassemblies level by level. Bills of Material automatically calculates this value. Purchased items have no cumulative manufacturing lead time.

Cumulative total lead time

The total time required to make an item if no inventory existed and you had to order all the raw materials and make all subassemblies level by level. Bills of Material automatically calculate this value.

10. How do you model by-products in BOM?

Material produced as a residual of a production process. By-product components are represented by negative usage in the bill of material for an assembly.