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Lesson 25: Consigned Inventory

Part 6: Costing of Fulfillment Business Flows
Supply Chain Managerial Accounting Course

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Objectives

After completing this lesson, you should be able to:

• Describe the process flow of consigned inventory
• Describe the setup tasks to support the costing of consigned
inventory
• Explain the costing process of consigned receipts and
consumptions

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Topics

• Consigned inventory process flow

• Setup tasks to support the costing of consigned inventory
• Costing process of consigned receipts and consumptions

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Consigned Inventory Process Flow
Buyer Supplier
Consignment Agreement
Between Buyer and Seller
Cost Consigned Receipt
Create Consigned Accrual
Consignment Order
Sent to Supplier

Consigned Inventory Cost

Received by Buyer Management

Consumption Advice
Sent to Supplier
Cost Transfer to Owned
Book Actual Accrual
Invoice Sent to Buyer

Payment Sent to Supplier

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Consigned Inventory: Overview

Create Create
Purchasing consignment consignment
agreement order

Receive
Receiving consigned
inventory

Calculate Calculate cost of

cost of
Cost Management consigned
consumption and
create supplier
Inventory accrual

Consumption Create
Inventory Management (ownership consumption
change) advice

Generate Pay
invoice supplier

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Topics

• Consigned inventory process flow

• Setup tasks to support the costing of consigned inventory
• Costing process of consigned receipts and consumptions

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Costing Setup for Consigned Inventory

Valuation Structure

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Costing Setup for Consigned Inventory
Cost Profile

Specify a Consigned
cost profile, item cost
profile, or default cost
profile

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Topics

• Consigned inventory process flow

• Setup tasks to support the costing of consigned inventory
• Costing process of consigned receipts and consumptions

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Cost Accounting: Overview

Inventory Fusion Cost Management

•Cost Planning
•Cost Accounting

Outbound Interface and Services

•Receipt Accounting

Cost Management Interface

Shipping

(Reports and Analytics)

Cost Accounting

Receiving
Pre-Processor Cost Processor Distribution
Processor
COGS
Recognition
Payables
Receipt Accounting
Event Distribution
Pre-Processor Processor
Processor
Receivables

Physical Events Trade/Logical Events

•Consigned Receipt •Consigned Receipt Consumption
•Consigned Receipt Delivery •Trade in Transit Receipt
•Transfer to Owned Issue
•Transfer to Owned Receipt

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Costing of Consigned Receipts

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Costing of Consigned Consumptions

RA

PO Receipt
CA
Dr Consigned Clearing 100
Cr Consigned Accrual 100 Dr Consigned Inventory 100
PO Delivery
Cr Consigned Clearing 100

Dr Consigned Accrual 40 RA
Cr Consigned Clearing 40
CA

Transfer to Dr Consigned Inv Offset 40

Consigned Receipt Owned (Issue) Cr Consigned Inventory 40
Consumption

RA
Transfer to
Owned Receipt
Accrual
Dr Trade Clearing 40
CA
Cr Accrual 40
Dr Trade In-Transit 40
Trade In-Transit
Cr Trade Clearing 40
Receipt
Acquisition
Cost changes
CA
(Retro price,
Dr Inventory Valuation 40
IPV) Transfer to
Cr Trade In-Transit 40 RA: Receipt Accounting
Owned (Receipt)
CA: Cost Accounting

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Summary

In this lesson, you should have learned how to:

• Describe the process flow of consigned inventory
• Describe the setup tasks to support the costing of consigned
inventory
• Explain the costing process of consigned receipts and
consumptions

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