Oracle Inventory Interview Questions

1. What is an item?

An item is a part or services where 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 the Key flex fields in oracle Inventory?

Oracle Inventory provides the following key flex fields :

Ø  System Items-- System Items Flexfield (also called the Item Flexfield) for recording and reporting your item information. You must design and configure your Item Flexfield before you can start defining items

Ø  Item Catalogs--ou can use item cataloging to add descriptive information to items and to partition your Item Master into groups of items that share common characteristics

Ø  Item Categories--A category is a logical classification of items that have similar characteristics. A category set is a distinct grouping scheme and consists of categories.

Ø  Stock Locators--

Ø  Account Alias and Sales Order--Use the Account Alias Listing to show account alias information. An account alias defines an account number to which you can charge account transactions. During an account alias transaction, you can use an account alias instead of an account number to refer to the account.

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

Create an item in the item master form

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

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

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

9. 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

10. 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 are you can create your custom template.

11. 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’.

12. 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 UMO’s into one category. Eg, quantitycould be a UOM class under which each, dozen, lot etc are separate UOM’s.

13. 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.

14. Describe Interorganization Shipping Networks

An inter-organization shipping network describes the relationships and accounting information between a shipping organization and a destination organization. You must define a shipping network between two organizations before you can transfer material between organizations. When you set up a shipping network you must select a transfer type: In transit 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

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

Ø  MTL_MATERIAL_TRANSACTIONS

Ø  MTL_TRANSACTIONS_INTERFACE

Ø  MTL_MATERIAL_TRANSACTIONS_TEMP

Ø  MTL_TRANSACTION_ACCOUNTS

16. 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.

17. 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.

18. 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:

Receive an item into an organization from GL account number

Issue an item from an organization into a GL account number

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

Transfer of items between various inventory organizations

Reservation of items

19. Describe various inventory transaction types?

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.

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

InterORG transfer: This transaction is used to transfer goods from one inventory organization to another.

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

Sales issue: This transaction is used to move goods from pick sub inventory to staged sub inventory.

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

20. 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.

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

The following are the three components used in a transaction

• Transaction Source Type
• Transaction Action
• Transaction Type

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

22. 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:

• Purchase Order
• Account Alias
• Move Order
• Internal Order
• Standard Cost Update
• Internal Requisition
• Sales Order
• Cycle Count
• Periodic Cost Update
• Physical Inventory
• Account
• RMA (Return Material Authorization)
• Inventory
• Job or Schedule

23. 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)

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

Cycle count adjustment, Physical inventory adjustment, adjusting inventory quantity within an inventory organization and decrementing on-hand balances from a subinvemtory

25. 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.

26. What are the objectives of inventory control?

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

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

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

v  To smoothen the production process.

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

v  To gain economy of production or purchase in lots.

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

v  To meet the time lag for transportation of goods.

v  To meet the technological constraints of production/process.

27. What are the factors that affect inventory control?

v  Type of product

v  Type of manufacture

v  Volume of production

28. 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)

29. 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

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

v  Re-order point planning

v  Min-Max planning

v  Kanban cards

v  Sub inventory replenishment planning

31. 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]

32. 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.

33. 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

34. 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

35. 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:

v  Define physical inventory

v  Take a snapshot of system on-hand quantities

v  Generate physical inventory tags

v  Enter counts

v  Do physical inventory adjustments by approving or rejecting

v  Post adjustments

v  Purge physical inventory information

36. Which are required steps in Inventory module set up?

a) All the 6 key flex fields i.e. Items, Item Catalog, Account Alias, Sales Order, Locator and Item Category

b) Organizations

c) Change Organizations

d) Intercompany Relations

e) Unit of Measure Classes

f)Sub inventories

g)Item Attribute Controls, Categories

h)Default Category set

i)Item Statuses

j) Cost types

k)Profile Options

l)Inventory Accounting Periods

37) Can you change customer item name or Item after you save it?

Yes, you can change it if you have set the

profile option INV: Updatable Customer Item to Yes and INV: Updatable item to Yes respectively.

38) What is item status? Name the related table?

INVENTORY_ITEM_STATUS_CODE is the Colum in table MTL_ITEM_STATUS will tell you the different status for item while you defining the item in item master form (INVIDITM). You can have different status as shown in below, also u can define your own custom status in status code form in item setups Active, Inactive, Engineer, Obsolete, Phase-Out

39) Which is the table for storing organization information?

MTL_PARAMETERS

40) What is the difference between Organization_id and Org_id?

Org Id is a unique ID for the Operating Unit. Organization Id: The Organization Id is an ID for the Inventory Organization which is under an Operating Unit

41) Can you apply material overheads to Average Costing Organization?

No, you can not apply it to Average Costing Organization. However you can apply it to Standard Costing Organization

42 ) What is a Transaction Action?

A transaction action is a predefined method of changing the quantity and/or location and/or cost of an item. It is used in Transaction Type form.

43) Is it possible to do back dated transactions in inventory?

Yes, you can do by setting the profile option INV: Transaction Date validation to Provide warning when date in past period or Allow date in any open period. It allows entry of a past date.

Inventory Interface Program populates the interface tables with transactions submitted through Confirm shipment forms. It updates order lines with shipped quantities and updates inventory.

43 ) 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

Ø  Do this with profile option INV: Minmax Reorder Approval

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

Ø  Sourcing rules can be defined for this

Ø  Then need to assign sourcing rule to the item

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

44 ) What are the setups for expense item?

v  Should not be Inventory Item

v  No Stock able

v  No Transact able

v  No Costing, Inv Asset

45) What is the use of sales order KFF?

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

·         Segments are

v  Sales order Number.

v  Sales Order Type.Sales

v  Order Source

46)  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.

1.                  What are the process of cycle count

v           Create a cycle count header with required data

v           Assign the items to be counted

v           Then run the required cycle count report

v           Using the report do the cycle counts

v           Then go and Approve the cycle count

48)       What is the different in MO Issue and MO Transfer

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

v           MO transfer will move the stock from one sub inventory to other

49)     How a MO is diff from Sub inv 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 and MO transfer which ll transfer the item to another location.

50 ) What is net table in Subinventory setup

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

51              What are different status attributes ?

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

v  BOM Enabled

v  Build in WIP

v  Customer order enabled

v  Internal Order enabled

v  Inviocable

v  Purchasable

v  Stockable

v  Transactable 

52) What is the use of status attribute

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

53)  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 organization instead of defining it again and again. 

54 ) What is the predefined locator in Subinventory and how it works in business?

v  We can setup locator control in 4 diff ways for each sub inventory

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

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

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

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

55)  How unit cost is derived under Average Costing?

Under Average Costing, the unit cost is derived by averaging the value of all receipts of that item to inventory, on a per unit basis. Each receipt to the inventory updates the unit cost of the received item. Issues from inventory uses the current average cost as the unit cost.

                             (Transaction value + Current inventory value)

Average Cost=  ---------------------------------------------------

                             (Transaction qty. + current on-hand qty.)

Transaction Value = PO price x Transaction qty

56) Under Standard Costing, how does the system get the unit cost?

We have to define unit cost of all the items as standard cost and the difference between the defined standard cost and the actual cost are recorded as variances. Under Standard Costing we can share costs across multiple organizations and hence the standard costs will be defined only in one organization. The Cost Master Organization will normally be the Item Master Organization.

57 ) What is Purchase Price Variance (PPV)?

When using the standard Costing, the difference between the defined standard cost and the actual cost are recorded as Purchase Price Variance (PPV)

PPV   =  (PO Unit Price – Standard unit Cost) x Qty. Received.

Purchase Price Variance is not used for Average Costing

58) What is Invoice Price Variance (IPV)?

Invoice Price Variance (IPV) is the difference between PO unit price and the actual invoice unit price multiplied by the quantity invoiced.

IPV      =     (PO Unit Price – Invoice unit Price) x Qty. Invoiced

59)  Does Repetitive Schedule Supports Average Costing?

No. We can’t define Repetitive Schedules in an organization that is defined as a manufacturing, average cost organization. The reason for this is that weighted average costing cannot be applied to repetitively manufactured items.

60 )  Under average costing, can we share costs between organizations?

No. We can’t share costs between organizations under average costing because average costs are maintained separately in each organization.

61 ) Can you prevent some specific items to be assigned to any sub inventory other than a selected one?

Yes. Set the item attribute ‘Restrict Sub inventory’ to the required Sub inventory.

62)   Will the changes made in a Workday calendar comes into effect after saving?

No. The changes made into a Workday calendar will come into effect only after Building The Calendar.

63)  What is an Organization?

An Organization is an inventory location with its own Set of Books, Costing Method, Workday Calendar and List of items.

64 )  Is it possible to have different costing methods for different organizations under the same Item Master Organization?

Yes. Even we can have dummy organizations for using different costing method for different costing method for different items within an organization.

65 ) In item Status,’ Default Value’ and ‘’Sets Value’ stands for what?

If ‘Default Value’ is selected against a Status Attribute, the user may change the defaulted value whereas if ‘Sets Value’ is selected, the user will not be able to change the defaulted value.

66)  Is it possible to change the primary UOM after saving?

No. The primary UOM can’t be changed after saving.(In order to avoid mistakes, enter the required primary UOM as the User Value against the Profile Option ’INV:Primary UOM’ so that it will always default.)

67 ) How will you assign multiple status code to an item with different effective dates?

Navigation: Items > Master Items.

Query for the required item

Navigation: Tools > Pending Status.

In the Pop up window we can assign any number of Status codes with different effective dates. The Status becomes effective on the effective dates (by choosing the push button Implement.)

68 ) What do you mean by Required with Defaults Steps?
Required Step With Defaults means that the setup functionality comes with pre-seeded, default values in the database; however, you should review those defaults /default values and decide whether to change them to suit your business needs

69 ) Which are Required with Defaults Steps in Inventory module?
There are no such steps in Inventory module

70) There is no stock locator control in your Inventory organization. Do you still need to configure it?.
You need not to configure the flexfield in a specific way but you must still compile the Stock Locators key Flexfield because all Oracle Inventory transaction and on-hand inquiries and reports require a frozen flexfield definition