Oracle SCM
Functional Interview Questions & Answers - Inventory Module - Part III
What is an 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:
1. Receive an
item into an organization from GL account number
2. Issue an item
from an organization into a GL account number
3. Transfer
items from one subinventory to other in the same organization.
4. Transfer of
items between various inventory organizations
5. Reservation
of items
Describe
various inventory transactions?
1. 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.
2. Subinventory
transfer:
This transaction
is used to transfer goods from one subinventory to another within the same
inventory organization.
3. Interorg
transfer:
This transaction
is used to transfer goods from one inventory organization to another.
4. Receiving
transaction:
This transaction
is used to move goods from receiving dock to specified subinventory and
locator.
5. Sales issue:
This transaction
is used to move goods from pick subinventory to staged subinventory.
6. WIP issue:
This transaction
is used to issue materials against production orders
What is the
difference between a subinventory transfer and a move order?
Both these
transactions are used for the movement of items from one subinventory to the
other. The difference is that move order generates a pick slip and a
subinventory 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
subinventory transfer, there is no reservation / allocation.
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.)
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
Name any three
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 subinventory
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.
What are the
objectives of inventory control?
To meet
unforeseen future demand due to variation in forecast figures and actual
figures.
To average out
demand fluctuations due to seasonal or cyclic variations.
To meet the
customer requirement timely, effectively, efficiently, smoothly and
satisfactorily.
To smoothen the
production process.
To facilitate
intermittent production of several products on the same facility.
To gain economy
of production or purchase in lots.
To reduce loss
due to changes in prices of inventory items.
To meet the time
lag for transportation of goods.
To meet the
technological constraints of production/process.
What are the
factors that affect inventory control?
Type of product
Type of
manufacture
Volume of
production
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).
What is consigned
inventory?
Consigned
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
What are the
different planning methods available in Oracle?
Re-order point
planning
Min-Max planning
Kanban cards
Subinventory
replenishment planning
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]
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 subinventory level.
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
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 subinventory.
Steps to perform physical inventory:
1. Define
physical inventory
2. Take a
snapshot of system on-hand quantities
3. Generate
physical inventory tags
4. Enter counts
5. Do physical
inventory adjustments by approving or rejecting
6. Post
adjustments
7. Purge
physical inventory information
Reference: Collected
from various web sources
Please do refer:
