3. Define Inventory Organization Parameters
You must define the control options and account defaults for your organization before you can define items or perform any transactions. You can define and update default inventory and costing parameters for your current organization in the following areas:
- Defining Default Inventory Parameters
- Defining Costing Information
- Defining Revision, Lot, Serial Parameters
- Defining ATP, Pick, Item-Sourcing Parameters
- Defining Inter-Organization Information
- Defining Other Account Parameters
- Defining Project Parameters
- Defining Valuation and Other Accounts
- Defining Inter-Organization Transfer Accounts
3.1 Inventory Parameters Tab
Organization Code (Required): Enter an organization code.
Item Master organization (Required): You create items in the item master organization and assign them to other organization within your operating unit. Oracle Inventory only defines items in the Item Master organization of the organization from which you enter the Items window.
Calendar: This is required when Oracle Master Scheduling/MRP and Oracle Supply Chain Planning is installed.
Demand Class (Optional): Select a demand class. Demand classes segregate scheduled demand and production into groups, and allow you to track and consume those groups independently. Oracle Master Scheduling/MRP and Oracle Supply Chain Planning use this demand class during forecast consumption, and shipment and production relief.
Move Order Time-out Period (Optional): The maximum number of days a move order requisition can wait for approval. After the time-out period, the system automatically rejects or approves the order depending on whether you select Approve automatically or Reject automatically in the Move Order Time-out Action field.
Move Order Time-out Action (Required):
· Approve automatically: After the second time-out period, the system automatically approves move order requisitions. Select this option and set the Move Order Time-out Period to 0 if you want to bypass the move order approval process and automatically approve move order requisitions.
· Reject automatically: After the second time-out period, the system automatically rejects move order requisitions.
Locator Control (Required):
· None: Inventory transactions within this organization do not require locator information.
· Prespecified only: Inventory transactions within this organization require a valid, predefined locator for each item.
· Dynamic entry allowed: Inventory transactions within this organization require a locator for each item. You can choose a valid, predefined locator, or define a locator dynamically at the time of transaction.
· Determined at subinventory level: Inventory transactions use locator control information you define at the subinventory level.
Default On-hand Material Status (Optional): Tracking option. This step is optional.You cannot update this field for existing organizations. To enable this field, you must submit the Activate Onhand Level Material Status Tracking concurrent program.
Enforce Locator Alias Uniqueness: Indicate whether locator aliases must be unique across the organization.
Quality Skipping Inspection Control: Indicate whether to allow quality skipping for inspections.
Allow Negative Balances: Indicate whether to allow negative balances. This parameter determines if inventory transactions can drive the inventory balance of an item negative.
Auto Delete Allocations at Move Order Cancel: Indicate whether auto delete Allocations are enabled. If you select this check box, when you delete a source order, or delete or cancel the order line, the system automatically deletes the associated move order allocations. If you do not select the check box then you must manually delete the move order line allocations.
Manufacturing Partner Organization: Indicate whether this is a manufacturing partner organization. This parameter enables you to use Chargeable Subcontracting. Chargeable Subcontracting is support only for Japan, Taiwan, and Korea.
Process Manufacturing Enabled: Select the Process Manufacturing Enabled check box if the organization is a Process Manufacturing organization.
Process Organization: Select a process organization to which you want to relate this inventory organization.
WCS Enabled: Check the Warehouse Control System (WCS) to enable the Warehouse Control System. The Warehouse Control System provides a bridge between Warehouse Management and the control level for device automation and integration, and the coordination of task execution.
EAM Enabled: Indicate whether this organization is an Oracle Enterprise Asset Management Enabled Organization.
WMS Enabled: Indicate whether this organization is an Oracle Warehouse Management Enabled organization. You can use Warehouse Management features such as LPNs, task management, warehouse execution rules, and cost groups in this organization. You must enable locator control in order to enable Warehouse Management. After you process transactions within the organization, you cannot change the value of this parameter.
LCM Enabled: Indicate whether Landed Cost Management module is enabled or not.
Load Weight: Enter a total load weight and unit of measure for this organization.
Volume: Enter a total volume and unit of measure for this organization.
3.2 Costing Information
Costing Method: The costing method for the organization. Available options are Average, Standard, FIFO, LIFO.
Average Rates Cost Type: When the Costing Method is Average, you can enter the Average Rates Cost Type.
Transfer to GL: Indicate whether all transactions are posted in detail to the general ledger. Transferring detail transaction distributions to the general ledger increases general ledger posting times due to the number of records created.
Reverse Encumbrance: Indicate whether to reverse encumbrance entry upon receipt in inventory. You normally select this option if you use encumbrances with Oracle Purchasing.
Project Cost Collection: If the Project Cost Collection Enabled check box is selected, and the Enable Project References check box, located in the Project Manufacturing Parameters, is also selected, the cost collector process can transfer costs to project accounting.
See, Project Manufacturing Parameters, Oracle Project Manufacturing User's Guide and Project Manufacturing Costing, Oracle Project Manufacturing User's Guide for more information.
1. Indicate whether to defer logical transactions.
2. Optionally, enter a Cost Cutoff Date.
Valuation Accounts: You choose a default valuation account when you define organization parameters. Under standard costing, these accounts are defaulted when you define subinventories and can be overridden. Under average costing, these accounts (except for Expense) are used for subinventory transactions and cannot be updated.
· Material: An asset account that tracks material cost. For average costing, this account holds your inventory and intransit values. Once you perform transactions, you cannot change this account.
· Material Overhead: An asset account that tracks material overhead cost.
· Resource: An asset account that tracks resource cost.
· Overhead: An asset account that tracks resource and outside processing overheads.
· Outside processing: An asset account that tracks outside processing cost.
· Expense: The expense account used when tracking a non-asset item.
3.3 Revision, Lot, Serial, LPN Parameters
Starting Revision: A starting revision to be the default for each new item.
Lot Control Region
Uniqueness: The lot number uniqueness option:
· Across items: Enforce unique lot numbers for items across all organizations.
· None: Unique lot numbers are not required.
Generation: Controls the generation of lot numbers:
· User-defined: Enter user-defined lot numbers when you receive items.
· At organization level: Define the starting prefix and lot number information for items using the values you enter in the Prefix, Zero Pad Suffix, and Total Length fields. When you receive items, this information is used to automatically generate lot numbers for your items.
· At item level: Define the starting lot number prefix and the starting lot number when you define the item. This information is used to generate a lot number for the item when it is received.
Zero Pad Suffix: Indicate whether to add zeroes to right-justify the numeric portion of lot numbers (Zero Pad Suffix).
Prefix: An alphanumeric lot number prefix to use for system-generated lot numbers when generation is at the organization level.
Total Length: The maximum length for lot numbers.
Serial Control Region
Uniqueness: An option for serial number uniqueness.
· Within organization: Enforce unique serial numbers within the current organization.
· Within inventory items: Enforce unique serial numbers for inventory items.
· Across organizations: Enforce unique serial numbers throughout all organizations.
Generation: An option for serial number generation.
· At organization level: Define the starting prefix and serial number information for items using the information you enter in the following fields of this window.
· At item level: Define the starting serial number prefix and the starting serial number when you define the item.
Prefix: An alphanumeric serial number prefix to use for system-generated serial numbers when generation is at the organization level.
Starting Serial Number: A starting serial number to use for system-generated serial numbers.
If serial number generation is at the organization level you must enter a starting serial number.
4. Available to Promise, Pick, Item-Sourcing Parameters
ATP Default Rule: ATP rules define the options used to calculate the available to promise quantity of an item. If you are using Oracle Order Entry, the default is the ATP rule for the Master organization.
Picking Defaults Region
Rule: Default picking rule. Picking rules define the priority that order entry functions use to pick items.
Subinvenrory Order: Default subinventory picking order. This value indicates the priority with which you pick items from a subinventory, relative to another subinventory, in which a given item resides. The value you enter here displays as the default when you define a subinventory.
Locator Order: Default locator picking order. This value indicates the priority with which you pick items from a locator, relative to another locator, where a given item resides. The value you enter here displays as the default when you define a locator.
Attention: A picking order of 1 means that order entry functions pick items from that subinventory or locator before others with a higher number (such as 2, 3, and so on).
Item Sourcing Detail Region
Type: The source type for item replenishment.
· Inventory: Replenish items internally from another subinventory in the same organization or another organization.
· Supplier: Replenish items externally, from a supplier you specify in Oracle Purchasing.
· None: No default source for item replenishment.
Organization: The organization used to replenish items. You must enter a value in this field if you selected Inventory in the Type field.
Subinventory: The subinventory used to replenish items. You must enter a value in this field if you selected your current organization in the Organization field. You cannot enter a value in this field if you selected Supplier in the Type field.
5. Inter-Organization Information
Inter-Organization Transfer Charge option:
· None: Do not add transfer charges to a material transfer between organizations.
· Predefined percent: Automatically add a predefined percent of the transaction value when you perform the inter-organization transfer.
· Requested value: Enter the discrete value to add when you perform the inter-organization transfer.
· Requested percent: Enter the discrete percentage of the transfer value to add when you perform the inter-organization transfer.
Percent: If you select Predefined percent in the Inter-Organization Transfer Charge field, enter a percentage value to add to a material transfer.
Inter-organization Transfer Accounts
· Note: When you set up accounts the primary ledger restricts the legal entity and operating unit.
· Transfer Credit: The default general ledger account used to collect transfer charges when this organization is the shipping organization. This is usually an expense account.
· Purchase Price Variance: The default general ledger account used to collect the purchase price variance for inter-organization receipts into standard cost organizations. This is usually an expense account.
· Payable: The default general ledger account used as an inter-organization clearing account when this organization is the receiving organization. This is usually a liability account.
· Receivable: The default general ledger account used as an inter-organization clearing account when this organization is the shipping organization. This is usually an asset account.
· Intransit Inventory: The default general ledger account used to hold intransit inventory value. This is usually an asset account. For average cost organizations, this account is the default material account.
6. Other Account Parameters
Purchase Price Variance: the general ledger account to accumulate Purchase Price Variance for this organization. This is the variance that you record at the time you receive an item in inventory, and is the difference between the purchase order cost and an item's standard cost. Purchase price variance is calculated as:
Purchase price variance is not used for average costing.
Invoice Price Variance: Enter a general ledger account to accumulate Invoice Price Variance for this organization. This is usually an expense account. Invoice price variance is the difference between the purchase order price for an inventory item and the actual invoice price multiplied by the quantity invoiced.
Inventory AP Accrual: The general ledger account to accumulate Inventory Accounts Payable Accrual for this organization. This is the account used by Oracle Purchasing to accrue your payable liabilities when you receive your items. This account represents your uninvoiced receipts and is usually part of your Accounts Payable Liabilities in the balance sheet.
Encumbrance: Enter a default general ledger account to accumulate Encumbrance for this organization. This is the default account when you define your subinventories.
Sales: The default Sales revenue account. When you define your items, this account is defaulted to the item's sales account in the Invoicing attribute group.
Cost of Goods Sold: Enter a default Cost of Goods Sold account. When you define your items, this account is defaulted to the item's cost of goods sold account in the Costing attribute group.
Project Clearance Account: When performing miscellaneous issues to capital projects, the project clearance account is used to post the distributions.
Deferred COGS: This account is used by the Sales Order Issue transaction type to deferred COGS until AR recognizes revenue.
Cost Variance: Under average costing with negative quantity balances, this account represents the inventory valuation error caused by issuing your inventory before your receipts.
LCM Variance Account: This account is used by the new Landed Cost Management module.
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