Oracle SCM Interview Questions

1. How do you calculate the Total annual cost?

I use Total Annual Cost equation:

TC = DC + (D/Q)*S + (Q/2)*H

TC = Total annual cost

D = Demand

C = Cost per unit

Q = Order quantity

S = Cost of placing an order or setup cost

H = Annual holding and storage cost per unit of inventory

2. Have you used economic order quantity [EOQ]?

Yes.

It’s a quantitative inventory model that I have used to find the most economic quantity to order based on cost and demand factors.

If C=Carrying cost per unit per year; F=Fixed cost per order; D=Demand in units per year; Formula for Economic Order Quantity=
((2 × F × D)/C) (1/2)

3. How will you calculate the total length of the supply chain?

Total length of the supply chain = DRM + DWIP + DFG

4. How to calculate Supply Chain Working Capital Productivity Ratio?

SWC (Supply Chain Working Capital) = INV+ AR-AP

Where:

SWCP (SWC productivity) = NS/SWC

5. How to calculate exponential smoothing?

It’s used in forecasting procedure:

F (t) = Ft-1 + a ((At-1) – (Ft-1))

6. How to calculate flow time?

Little’s Law relates throughput, time and inventory:

Flow time = Inventory (WIP)/Throughput rate

7. What’s the use of Global Trade Item Number (GTIN)?

The Global Trade Item Number is a 14-digit item number used in the item identification system for products.

It’s a standard number used in RFID and electronic commerce.

8. How to use a PKI system in supply chain?

I have used Public Key Infrastructure for Securing E-Business across the Supply Chain.

Public Key Infrastructure (PKI) offers a strong linkage between business identities and transactions throughout the supply chain.

In a PKI system, each user has two keys: a public key and a private key.

These keys can be used for encrypting and decrypting information, for electronically signing electronic information, and for verifying
the authenticity of their owner.

9. Explain your experience with the Cost analysis?

Cost analysis=Review of the potential provider’s cost elements to determine their appropriateness and reasonableness.

I have conducted the Cost analysis as a review of:

Need for categories of personnel & reasonableness of personnel work time proposed indirect cost, base to which rates are applied.

Compare estimated costs with prior actual costs.

10. Explain your experience with supply chain performance indicators?

Consists of four types of indicators:

Quality, time, financial, and productivity.

Cp a measure of process capability that compares the specification width with the process width- not adjusted for lack of process
centering.

Cpk a measure of process capability that compares the specification width with the process width- adjusted for lack of process
centering.

11. How do you forecast?

I can use Market research and Historical analogy to forecast.

12. Explain your experience with the product’s life cycle?

There are five stages of a product’s life cycle:

1. Extraction

2. Production

3. Packaging and Transport

4. Usage

5. Disposal

13. When a process is considered to be of six sigma quality?

When there are no more than 3.4 non-conformities per million opportunities.

14. Have you performed marketing functions?

: Yes, I have performed these marketing functions of the supply chain:

1. Buying

2. Selling

3. Storing

4. Transporting

5. Sorting

6. Financing

7. Information Gathering

8. Risk Taking

15. Explain your experience with Material management

I have worked in the material management department, which had the authority and responsibility of all activities, concerned with
the flow of materials in the organization.

My responsibilities were:

1. Efficient use of the working capital.

2. Responding to the market changes related to any product.

3. Ensuring the cooperation of all departments.

4. Providing best services to the customer.

5. Analyzing materials and supply to reduce cost.

6. Improve quality and ensure supplier performance.

7. Maintain minimum inventory levels

16. How the purchasing departments establish and maintain policies and procedures for the acquisition and
payment of goods and services?

It authorizes the delegation of purchasing authority and establishes and maintains policies and procedures for the acquisition and
payment of goods and services.

17. A supplier partnership focuses on which relationship?

It focuses on cooperative rather than adversarial relationships with suppliers.

18. What are the responsibilities allocated to the production environment?

1. Product fabrication

2. Work schedules

19. How will you ensure better decision-making capability?

By using cross-functional sourcing teams.

20. What you suggest for optimizing purchasing and production departments?

I suggest these responsibilities can be shared by both:

1. Product fabrication

2. Lead time for delivery of material

3. Work schedules

4. Selection of sources of supply

21. What are different planning methods in Inventory

There are 5 different planning methods in oracle Inventory

1. Subinv Replenishment Planning

2. Min Max Planning

3. Re-order point planning

4. Kanban Planning

5. Periodic Automatic Replenishment

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

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

2. Attributes, Inv Planning method: Min-Max

3. Min-Max Qty should have been defined

4. Safety Stock method should be non-MRP Planned

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

Do this with profile option INV: Minmax Reorder Approval

1. 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 a sourcing rule to the item

1. In Inventory responsibility, under Planning run the Min-Max planning report with required parameter

23. What is the concurrent program for the planning

Min Max planning report under planning menu in Inventory responsibility

24. What are the setups for expense items?

Should not be Inventory Item

1. No Stackable

2. No Transactable

3. No Costing, Inv Asset

25. How many key flex fields are there in Inventory?

Seven KFF are there in Inventory

1. Account Alias

2. Item

3. Item Category

4. Item Catalogues

5. Stock Locators

6. Sales Order

7. Service Items

26. What is the use of sales order KFF

1. This is used during the material transaction when the source is Sales Order

2. Segments are Sales order Numbers. Sales Order Type.Sales Order Source

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

1. This can be modified using Flexfield>Key> Segments

2. Query the System Items, then you can modify the existing structure, or you can add a new one.
28. How will you inactivate the Inventory locations

By giving Inactive date in the Location form

29. What all setups you have done in inventory organization implementation

1. Location

2. Calendar

3. Organization

4. Parameter

5. Cost Group

6. Sub inventory

7. Stock Locator

8. Receiving Options

9. Shipping Networks

10. Intercompany Transaction flows

11. Cost Subelements

30. What are the valuation accounts used in Inventory?

1. Material: An asset account that tracks material cost. For average costing, this account holds your inventory and in-transit values.
Once you perform transactions, you cannot change this account.

Material Overhead An asset account that tracks material overhead cost.

2. Resource: An asset account that tracks resource cost.

3. Overhead: An asset account that tracks resource and outside processing overheads.

Outside processing An asset account that tracks outside processing cost.

4. Expense: The expense account used when tracking a non-asset item

Other Accounts

1. Sales: The profit and loss (income statement) account that tracks the default revenue account.

2. Cost of Goods Sold The profit and loss (income statement) account that tracks the default cost of goods sold account.

3. Purchase Price Variance: The variance account used to record differences between the purchase order price and standard cost.
This account is not used with the average cost method.

4. Inventory A/P Accrual: The liability account that represents all inventory purchase order receipts not matched in Accounts
Payable, such as the uninvoiced receipts account.
5. Invoice Price Variance: The variance account used to record differences between the purchase order price and invoice price. This
account is used by Accounts Payable to record invoice price variance.

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

7. Average Cost Variance: Under average costing with negative quantity balances, this account represents the inventory valuation
error caused by issuing your inventory before your receipts.

31. What is ABC Analysis and why it is being used

1. 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.

2. 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.

Oracle SCM Interview Questions For Experienced

32. What is the process of cycle count

1. Create a cycle count header with required data

2. Assign the items to be counted

3. Then run the required cycle count report

4. Using the report do the cycle counts

5. Then go and Approve the cycle count

33. What is the difference between MO Issue and MO Transfer

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

2. MO transfer will move the stock from one subinventory to other

34. What is the Picking rule in Inventory

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

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

35. What are the criteria in Cycle count

1. Depending on the requirement, we can trigger a cycle count.

2. We can define a regular cycle count of high values items.

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

36. What is the diff in Lot and Serial

Lot control is to control a whole batch of items. for example, in the drug industry, we have batch numbers that can be controlled
using a 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.

37. What is the move order in OM

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

38. How a MO is diff from Subinv transfer

MO generally is 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 that will issue the item from the location and MO transfer which ll transfer the item to another
location.

39. What is nettable in Subinventory setup

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

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

We can define a different status for an item combination these attributes as per the business need

Following are the attributes

1. BOM Enabled

2. Build in WIP

3. Customer order enabled

4. Internal Order enabled

5. Invoice

6. Purchasable

7. Stackable

8. Transactable

41. What is the use of the status attribute

We can define a different status for an item combination of these attributes as per the business need

42. Why master-org is required

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

43. Inventory Master org is mandatory?

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

44. What are the Lot control setups

Lot control can be set up at item attributes at the organization level.

Either No Control or Full Control

45. How lot number generates

You can generate new Lot numbers during transactions

46. What is serial controlled and what are the setups

Serial control can be set up at item attributes at the organization level.

47. How serial numbers are generated

Serial control can be set up at item attributes at the organization level.

No Control, At Receipt, At Sales Order issue, Predefined

48. What is the predefined locator in Subinventory and how it works in business

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

Note: 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 sub inventory during the
transaction

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

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

49. What are the transaction managers

The transaction manager is the interface managers which carry out all transaction once submitted by the users

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

Yes, we can change the name to the master level.

51. How WMS is helpful compared to Inventory

Warehouse Management (WMS) enables companies to maximize their utilization of labor, space, and equipment investments by
coordinating and optimizing resource usage and material flows. Specifically designed to support the needs of distribution,
manufacturing, asset-intensive, and service businesses, Oracle WMS provides a single platform across your entire global supply
chain.

52. What is the use of WMS Rules Workbench

The Rules workbench enables you to assign strategies, rules, and cost group values
directly to any number of objects in an assignment matrix

53. Why strategy used

After you define your rules, you must set up a strategy and then associate the applicable rules. After you assign rules to a strategy,
the rules engine can execute the strategies on any objects to which the strategy applies. The rules engine executes each
subsequent rule in your strategy until an allocation is completely filled.
54. How many types of bar codes are there?

Mainly 2 types Linear (1 dimensional) and Matrix (2D)

55. What is the difference between ‘Accrue On Receipt’ and ‘Accrue at Period End’?

Accrue On Receipt means that when a receipt is saved, accrual transactions are immediately recorded and sent to the general
ledger interface. This is also known as “online” accruals. Accrue at Period End means that when a receipt is saved, the accrual
transactions are not immediately recorded and sent to the general ledger; instead, the accounting entries are generated and sent at
the end of the month by running the Receipt Accruals – Period-End Process.

All items with a destination type of either Inventory and Outside Processing are accrued on receipt. For items with a destination type
of Expense, you have the option of accruing on receipt or at period end.

56. Why are expense items typically accrued at period-end, and why are inventory items always accrued on the
receipt?

One should accrue on receipt if perpetual inventory is adopted to facilitate reconciliation between inventory valuation reports and
accounting entries. Expense items typically are not accounted for on a daily basis, and most companies find it easier to account for
and reconcile these expenses at month-end rather than at the time each individual expense is incurred.

When both inventory and expense items are accrued on receipt, the following problems may be encountered:

A) Receiving inspection balances will include both inventory assets and expenses, so at the end of the month, they will need to be
manually reclassified.

B) The number of entries needed to research and reconcile the perpetual A/P Accrual Account(s) becomes significantly increased.
Since the expense receipts could double the number of accrual accounting entries to process, the Accrual Reconciliation Report
could take twice as long to run. The amount of time required by your staff to research any discrepancies would also increase.

57. What is the significance of the Document Total and Account Range types on the Approval Groups form?

The Document Total type sets the maximum limit for any approval actions taken by the user to whom the approval group applies to.
If multiple Document Totals are specified, the restriction will be to the Document Total, which is the lowest. The Account Range also
allows for a document total which is then tied to a specific range of accounts listed on the same line. It is possible to have different
account ranges with different amount Limits. This allows the same user to have a different dollar/account limit. It is mandatory to
have an account range specified in each approval group defined. By default, if there is not an account range defined, all accounts
will then be excluded from the document approval process, which means that the documents will not have the ability to become
approved.

58. How is it possible to approve a blanket release when the blanket purchase agreement is showing that the
full amount has already been released?

The validation of a release dollar amount is not against the amount agreed on the header of the blanket purchase agreement;
instead, it validates against the Amount Limit specified in the Terms and Conditions window of the Purchase Orders form. If this field
is left blank, then the release can be for any amount.

Therefore, it is imperative that the Amount Limit field be populated with the same dollar amount as the Amount Agreed field in the
header region of the Purchase Orders form, depending on the business needs. It should also be noted that Release 11i also has
introduced an Amount Limit field that can be defined at the line level of the blanket agreement.

59. I am delegating the approval of a PO to someone who doesn’t have access to open this PO. Would he be
able to approve it?

Since he has been ‘delegated’ the approval authority from you, his approval actions would be adjudged as if you were taking those
actions on this document. However, the document would remain inaccessible to him. This is because by ‘Delegating’, you are only
allowing him to act on approval decisions on your behalf, rather than also delegating him the access authority.

60. Does autocratic add to an existing PO shipment that has been encumbered?
Ans: Purchasing does not add to an existing purchase order shipment if that shipment has been encumbered even though all the
grouping columns necessary to combine shipping information are there.

61. a requisition line with the item number and without item number [one-time item] be combined to a single
document line in autocreate?

If you want to combine two requisition lines for the same item, one with an item number and one without, you have to manually auto-
create the document and use Modify on the Tools menu to add the predefined item to the requisition line for the one-time item.

Oracle SCM FAQs

62. The Encumbrance Detail Report does not pick up expected purchase orders.

Review the parameters passed to the report to verify that the selection criteria did not exclude the purchase order. The selection of
purchase orders on this report is based on the following information in the database:

1. the setting of the encumbered_flag in po_distributions, needs to be set to Y, and the cancel_flag in po_line_locations must be set
to N and

2. the gl_encumbered_date in po_distributions must be between the dates passed to the report for the encumbered dates and

3. the vendor used on the purchase order must be included by the Vendor parameter and

4. the po_distributions.prevent_encumbrance_flag must be set to N

63. I am using encumbrance accounting and when I forward a Purchase Order for approval, I am encountering
the following error: APP-14166: Please enter a forward to employee or funds are not reserved.

You must check the Reserve Funds check box when forwarding and/or approving a Purchase Order if you are using encumbrance.
You can check to see if you are using encumbrance in Purchasing by doing the following:

1. Setup/Organizations/Financial Options

2. Change the Alternate Region to Encumbrance and see if the Use PO Encumbrance check box is checked.

3. Refer to Note 1064155.6 for more details.

64. What are Reminder notifications?

Once an approver doesn't respond to approval notification for quite some time, then a reminder notification can be sent out to the
approver. You can send up to two reminders to an approver using the Timeout feature. You can also specify that after a certain
period of time, the document be forwarded automatically to the next approver in the hierarchy. This feature has to be set up by you
by changing the PO and/or Requisition approval workflow in Oracle Workflow Builder.

65. How do you set up the timeout feature?

In Oracle Workflow Builder, open the? PO Approval? workflow (for purchase orders) or the?PO Requisition Approval? workflow for
requisitions. To enable the Timeout feature in the PO Approval workflow, modify the following activities in the Notify Approver
subprocess by entering a Timeout period in their Properties windows:

Approve PO Notification, PO Approval Reminder 1, and PO Approval Reminder 2.entering a Timeout period in their Properties
windows: Approve Requisition Notification, Requisition Approval Reminder1, and Requisition Approval Reminder2.

66. How do you generate the notifications for the documents that need to be started up in approval yet?

To enable the Timeout feature in the PO Requisition Approval workflow, modify the following activities in the Notify Approver sub-
process by approval and send notifications to the appropriate people informing them about the document's status.
You can run? Send Notifications For Purchasing Documents? program to search the documents that are incomplete, rejected, or in
need of re-ap

67. Why does the create releases process not create a Release when we have run the CREATE RELEASES
program against a Blanket Purchase Order whose EFFECTIVE DATES are in the future with a valid Sourcing
Rule?

The CREATE RELEASE program must be run within the EFFECTIVE DATES of the Blanket Purchase Order. This is because the
program verifies whether the SYSTEM DATE falls within the EFFECTIVE DATES, when looking for the Releases to be created. This
is standard functionality.

68. When we try to run Requisition import after running a Min-Max planning request why is it that requisitions
are created from Requisition import but no releases are created against blanket POs.

For Releases to get created automatically in the Requisition Import process:

1. Check for the profile option PO: Release During Requisition Import which should be set to ‘Yes to create releases during
requisition import.

2. ‘Sourcing Rule’ must have a current date between ‘effective date’ and ‘to date.

3. Check that the requisition is sourced with the blanket, and the requisitions are approved as part of the Requisition Import process.

4. If the Encumbrance is ON, then the requisition will not get approved and will be in pre-approved status, and hence release will not
get created.

5. Check the profile option MRP: Purchasing By Revision (If requisitions are coming from MRP) and INV: Purchasing By Revision (If
requisitions are coming from INV). This must be set according to and should not be null. This profile option must be set to ‘Yes’ or
‘No’ according to the customer's requirement.

6. Verify the table PO_REQUISITIONS_INTERFACE, column AUTOSOURCE_FLAG is Y.

7. Verify if this item has a blanket purchase agreement approved and it is not closed or canceled.

69. Can we save and approve blanket PO releases without entering promised and need-by date?

If the item is either MRP/DRP, MPS/DRP, or DRP planned item the promised date or need by date is mandatory and the user has to
enter the date. If the item is not planned, then it is not mandatory.

70. What is the significance of the “PO: Convert Requisition UOM to Source Document UOM” profile option?

Earlier in Autocreate if the requisition UOM is different from the BPA UOM the user would not be allowed to create a release. But in
Create releases program this was possible. To make the behavior consistent we have introduced this profile option. If this profile is
set to yes we allow the auto-creation of the release with the quantity and UOM converted to that of the BPA. If the profile is set to
yes we do not allow the creation of the req both in autocreate as well as the create releases program.

You can firm orders at the document header or shipment level. If your firm at the header level, Purchasing applies this control to
every shipment on the document.

71. How does the Create Document Workflow decide which buyer to use for the automatically created
documents?

Workflow tries to retrieve buyer information in the following order:

1. Buyer specified on the Requisition Line

2. Default buyer from Master Item

3. Category

4. Buyer of the source document

When creating a release, workflow retrieves the buyer's name from the blanket agreement. If workflow cannot find a buyer, it doesn't
create a document

72. What is the difference between the agreed amount and the amount limit fields while entering a contract
purchase agreement and issues related to these fields?

1. The agreed amount field at the header level is copied to the amount limit in the terms and conditions block. This is also the
amount that is printed on the blanket agreement and represents the contract amount between you and the vendor.

2. The amount limit field will restrict the cumulative releases applied to this purchase agreement from exceeding the specified dollar
amount entered here. The value of this field must be equal to or greater than the agreed amount field. This column is used for
release approval amount validation. If the total cumulative releases exceed this amount approval will fail. The purpose of this field is
to allow users to set a higher approval amount limit than the amount agreed.

73. What is the use of list price and market price on Purchase orders?

If you have entered an item, Purchasing displays the list price for the item. You can accept the default list price or change it. You
can use this field to help evaluate your buyers. Purchasing uses the list price you enter here in the savings analysis reports. Savings
Analysis Report (By Buyer) and Savings Analysis Report (By Category). If you enter an item, Purchasing displays the market price
for the item. Use this field to help evaluate your buyers. Purchasing uses the price you enter here in the savings analysis reports if
you do not provide a value in the List Price field.

74. What is the significance of the fields ‘Allow Price override’ and ‘Price limit’?

For planned purchase orders and blanket purchase agreements only, check Allow Price Override to indicate that the release price
can be greater than the price on the purchase agreement line. If you allow a price override, the release price cannot exceed the
Price Limit specified on the line.

If you do not allow a price override, the release price cannot exceed the Unit Price. You cannot enter this field if the line type is
amount-based. If you allow price override, enter the Price Limit. This is the maximum price per item you allow for the item on this
agreement line.

75. Can I set up a different Purchase Order type default for the PO form?

The Purchase Orders form always defaults a PO type of ‘Standard Purchase Order’, and there is no setup, which can change this.
Although the default value cannot be changed, the user can overwrite the defaulted type once the Enter PO form is opened.

76. Can the original Purchase Order can be viewed in any way, for a revised Purchase Order?

The original version of a revised PO cannot be viewed from the PO form or PO summary form. Information on the original PO is
stored in the PO_HEADERS_ARCHIVE and PO_LINES_ARCHIVE tables, and can be obtained through SQL, using the
PO_HEADER_ID column as a common reference.

77. Create a Purchase Order. Input the Header and Line information and find that the Shipments button at the
bottom of the form is grayed out.

Setup the Receiving Options to enable the Shipment Button in the Purchase Order form. Navigation: Setup –> Organizations –>
Receiving Options. Once set up these options for your Organization you will have the Shipments button enabled. Ensure that the
Purchasing Options and Financial Options are defined for your organization.

78. Why is there no category displayed or list of values for the category field in the purchase order you are creating?

You must also create category codes for your items. Then create a Category set for Purchasing controlled at the master level.
Assign your items to a category code and the Purchasing category set you have created. Confirm that in Default Category Sets the
Purchasing application points to the Purchasing Category set. This will populate the category and description when the item number
is selected at the PO line level.

79. What does the Account Generator process do?

The Account Generator process builds charge, budget, accrual, and variance accounts for each purchase order, release, and
requisition distribution based on the distribution’s destination type. It is a synchronous Workflow process.

80. What are the Prerequisites to use an Account Generator?

Before using the Account Generator you must:

1. Define your Accounting flexfield structure for each set of books.

2. Define flexfield segment values and validation rules.

3. Set up Oracle Workflow.

4. Decide whether you want to use the Account Generator processes as seeded in Oracle Purchasing, or you need to customize
them to meet your accounting needs.

81. Will the account generator build the charge account based on project information?

No. By default, the Account Generator process as seeded in Oracle Purchasing would not consider the project information to build
the account. To achieve this functionality, you should customize the Account Generator to consider the project details. There is a
dummy sub process ‘Build Project Related Account’ seeded in the Account Generator workflow, available for customization. You
would also have to modify the function PO_WF_PO_CHARGE_ACC.IS_PO_PROJECT_RELATED to return a value of “True”.

82. When the charge account field is non updateable?

In the following cases the charge account field is not updateable:

1. If the destination type code is INVENTORY or SHOP FLOOR.

2. If the distribution is already encumbered.

3. If the PO is created from an encumbered Requisition

4. If the destination type code is Expense and

If the project is entered and the profile option PA_ALLOW_FLEXBUILDER_OVERRIDES is set to NO

If the expense accrual code= RECEIPT

83. What should I do if the Purchase Document Open Interface (PDOI) process fails?

The first thing is to check for the error message and examine the description from the po_interface_errors table for the given
interface_header_id. The description would be self-explanatory. Accordingly check for the data in the po_headers_interface,
po_lines_interface tables and correct them and run the PDOI again with the corrected data.

84. What can Receiving Routing be used for and how does it default?

Direct Delivery – Perform Receive and Delivery on Receipts Screen at the same time.

3-way matching.
Standard Receipt – Perform Receive on Receipts screen.

Perform Delivery on Receiving Transactions screen.

3-way matching.

Inspection Required – The inspection is required after Receiving and before Delivery.

4-way matching.

You can override the Receiving Routing on the Receipts screen only if the Profile RCV: Allow Routing Override is set to ‘Yes’.

The Receiving Routing on the receipts screen has defaulted as follows:

1. Purchase Order shipment

2. if 1 is null, then Item Attribute

3. if 2 is null, then Vendor Attribute

4. if 3 is null, then Receiving Option

85. How many Transaction Types exist?

Receive – Receive the items into Receiving Dock.

Deliver – Deliver the items into expense or inventory destination.

Return to Vendor – Return the received items directly to vendors.

Return to Receiving – Return the delivered items to Receiving Dock or inspection.

Accept – Accept items following an inspection.

Reject – Reject items following an inspection.

Transfer – Transfer items between locations.

Correct – Enter a positive or negative adjustment to a receiving or delivery transaction.

Match – Match unordered receipts to purchase orders.

Unordered – Receive items without purchase orders

86. What are the major receiving tables involved?

RCV_SHIPMENT_HEADERS

RCV_SHIPMENT_LINES

RCV_TRANSACTIONS

RCV_RECEIVING_SUB_LEDGER

87. What are the minimum setups required for Items that we use for Internal Sales orders?
The items which we use for Internal Sales Order must be Inventory enabled, internally orderable and stackable, shippable, and
Order Management transactable for the source organizations. Under Inventory, you need to select the Inventory Item, Transactable,
and Stackable options. Under Order Management, you need to select the Internal Ordered, Internal Orders Enabled, OE
Transactable, and Shippable options.

88. What are the steps to perform Inter-Organization Transfer?

Follow these 3 simple steps:

1. Setup Shipping Network: This information describes the relationships and accounting information that exists between a from
(shipping) organization and a to (distribution) organization.

Navigation path:

a. Choose the Inventory Manager's responsibility.

b. Setup/Organizations – Make sure that there is an entry for from/to organization (between the organizations you intend to perform
the transfer). When you click on this form, you will get a LOV with orgs.

Choose the From Org.

Transfer Type can be either Intransit or Direct (Direct would ship directly to Inventory, so it would be a Direct Delivery).

FOB can be either Receipt or Shipment if the transfer type is entered as Intransit.

If Receipt the source inventory quantities get updated at the time of receipt.

If it be Shipping, then the quantities get updated as soon as the shipment is done.

2. Inventory/Transactions/Inter organization Transfer: When you click on this form, you will get a LOV with orgs. Choose the from
org. Specify the to-org, transfer type as in transit, and input a value for shipment-number.

Click on the transaction lines button. Input the item, the quantity, and the sub inventories between which you want to do the transfer.
(Sometimes there might not be enough quantity in the from-org to do this. For this: Go to: Inventory/Transactions/Miscellaneous
Transactions. Specify the Type as Miscellaneous Receipt. Click on the transaction lines button and specify item/quantity).

3. Receive against an Inter-org Transfer: Choose Purchasing Super User responsibility.

Under Purchasing/Receiving/Receipts – Query up against Shipment Number in the find window. In the RCV Transactions block,
specify the quantity you want to receive and commit the transaction.

89. How are Lot and Serial Numbers handled in Inter-Organization Transfers?

When you perform an inter? organization transfer, the source and destination organization may have different lot/serial controls.
Purchasing handles this situation as follows:

1. When the source organization uses controls and the destination organization does not, the control numbers are recorded as
being issued from the source organization. Lot/serial transactions are recorded for the destination organization.

2. When the source organization does not use controls and the destination organization does, the transaction is processed normally.

3. When both source and destination organizations use controls, the control numbers are recorded as being issued from the source
organization. These control numbers are tracked to insure that the same control numbers that were shipped are the ones that are
received. When items are returned from inventory to receiving or to the supplier, only the control numbers originally recorded for the
delivery transaction can be used.

90. What are the main tables involved in Inter-Organization Transfer?

A check is carried out to see if the transaction date is in an open period as specified in the profile option (INV: Transaction Date
Validation). The column is acct_period, the table is ORG_ACCT_PERIODS.

The organizations set, cost information, etc, are derived from:

ORG_ORGANIZATION_DEFINITIONS, MTL_PARAMETERS, MFG_LOOKUPS, MTL_INTERORG_PARAMETERS

[HR_ORGANIZATION_INFORMATION – for rel 11I].

The transaction information is derived from MTL_TRX_TYPES_VIEW for inter-org transactions where
transaction_source_type_id=13.

The item information is derived from MTL_SYSTEM_ITEMS [MTL_SYSTEM_ITEMS_B – for rel 11I].

A check is carried out to verify the available item quantity on MTL_DEMAND and

MTL_ONHAND_QUANTITIES [MTL_RESERVATIONS included in rel 11I].

MTL_SUBINVENTORIES_TRK_VAL_V keeps track of the values of the sub inventories.

MTL_ITEM_LOCATIONS is searched for the locators specified (if used).

GL_CODE_COMBINATIONS is searched for a valid locator combination (if used).

The cost of the item is gotten from CST_CG_ITEM_COSTS_VIEW.

The transaction is inserted into MTL_MATERIAL_TRANSACTIONS_TEMP table.

If the item is under lot control, lot information is deleted from MTL_TRANSACTION_LOTS_TEMP, likewise the serial number's
information if the item is serialized is deleted from MTL_SERIAL_NUMBERS_TEMP, MTL_SERIAL_NUMBERS.

The new lot information is inserted into MTL_TRANSACTION_LOTS_TEMP.

91. What is a Debit Memo Invoice?

Negative amount invoice which is created and sent to a supplier to notify the Supplier of a credit you are recording.

92. What is Pay On Receipt?

Pay on Receipt (also known as ERS (Evaluated Receipt Settlement) or Self-Billing) is an Oracle Purchasing’s concurrent program,
which automatically creates invoices in Oracle Payables and matches them with PO’s automatically for the received amount. The
short name for the program is POXPOIV.

93. What is the significance of the Ageing Period (R11i)?

The parameter Aging period determines the transactions on the receipt that can be considered for invoice creation. Forex if aging
period is given as 1, then all the transactions that have a transaction date less than or equal to the (sysdate-1) are considered for
invoice creation. The aging period can be set thru the profile option PO: ERS Aging period.

94. What are some of the supported and non-supported features of the Receiving Open Interface?

The non-supported features include:

1. Lot number transactions

2. Serial number transactions

3. Dynamic locator control

4. Replace transactions

5. Separate RECEIVE and DELIVER transactions

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. 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. 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. 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. 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’

Inventory

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

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

Demand such as Sales order booking
Supply such as Purchase orders, requisitions etc.

7. Which report should I run for viewing item on hand quantity across organization? [Complexity *]
Multi-organization Quantity Report
8. What are types of managers in Oracle? [Complexity *]
• Cost Manager
• Lot Move transaction Manager
• Move Manager
• Material manager

9. Whats 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.

10. 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.

11. Whats 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.

12. 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.

13. 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.
14. 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.

15. 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.

Costing

1. Can you explain the process involved in updating of ‘Frozen’ costs in Standard costing organization?

Items are typically assigned to updatable cost type other than Frozen cost type and at the month end
when previous inventory period is closed and new period is not opened, the item costs defined in user
defined cost types are updated to Frozen cost and hence becomes the base cost for any transaction in
the next month.

2. What is concept of Cost group?

Cost group is a unique identifier that is used to identify set of accounts such as Material, Outside
Processing, Material Overhead, Overhead and Resource accounts for an inventory organization.

3. What is FIFO costing? When would variances be recognized in FIFO costing organization?

FIFO (First In, First Out). is a separate perpetual costing method based on actual cost. This method is
also referred to as layer costing. FIFO costing is based on the assumption that the first inventory units
acquired are the first units used.

Variances would be recognized in FIFO organization when transactions occur that drive inventory
negative.

4. What is the concept of Layer costing?

In layer costing, a layer is the quantity of an asset item received or grouped together in inventory and
sharing the same costs. Available inventories are made of identifiable cost layers.
• Inventory Layer
On–hand inventory contains layers that are receipt–based (purchased items) or completion–based
(manufactured items).
• Work in Process (WIP) Layer
Components issued to a work in process job are maintained in layers within the job itself. Each issue to
WIP represents a separate layer within the job. In addition, each WIP layer consists of only one inventory
layer initially consumed by the issue transaction. The costs of those inventory layers are held separately
within the WIP layer.

5. What is Purchase Price Variance? When would PPV be recognized in the system in a standard costing
organization?

Purchase price variance is the variance that is caused by the difference in PO price and standard cost of
that item in an organization. PPV is recognized at the time delivery transaction of PO receipt into
inventory. In general, it’s the difference between PO price and Std cost of that item.

6. How to setup Overheads for a department?

Overheads for a department are defined as a sub-element of type overhead. Cost element, Absorption
account and basis is specified for the overhead. Resources which are to account for this overhead are
specified against a cost type in Resources window. The rates applicable for the resources are specified in
Rates window.

7. What are the types of costing supported in Oracle EBS?

• Standard
• Average
• FIFO
• LIFO

8. Where can I see the cost updates for an item under standard costing?

Standard cost updates for an item is available under View cost history screen.

9. What is the concept of Standard costing?

Under standard costing, predetermined costs are used for valuing inventory and for charging material,
resource, overhead, period close and job close and schedule complete transactions. Differences between
standard costs and actual costs are recorded as variances.

10. If a client is using LIFO costing and client is operating in a country where inflation is going down
drastically then would client stand to benefit in this environment?

No, FIFO costing would be beneficial in this type of environment.

11. What would happen if item is costed X in Average costing organization and this item is transferred to
another organization which is Standard costing enabled?

Average or transfer cost would be compared to item’s standard cost and the difference would be
accounted under the variance account.

12. What is the importance of Inventory period closure and its impact in Costing?
Inventory period closure brings a procedural control in the system and thereby ensures that transactions
that occur in a particular period are accounted in that period itself. System would prevent any transactions
in a period which is in closed status.

13. What is the use of Sub-elements in costing?

Sub elements bring a greater item cost visibility and flexibility, EBS allows users to define multiple
material sub-elements. Sub-elements are a smaller classification of the cost elements. For every sub-
element you define, you must enter the method of allocating the cost to the sub-element (basis type).

14. What is the use of Multi-org flag in Cost types?

Multi-org flag ensures that cost type defined in one inventory organization is available for other
organizations as well. Multi-org flag ensures that cost type is available for sharing across organization.

15. What is Transfer Price costing?

Transfer price costing occurs when a sales order is created for an intransit transfer, between two internal
organizations, in two different operating units.

Order Management

1. 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.

2. Whats 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.

3. 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’.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.
10. 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.

11. 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.

12. 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

13. How to setup quantity discounts in Price lists?

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

14. 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.

15. 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.