Oracle SCM Functional Interview Questions & Answers - Purchasing Module - Part III

Oracle SCM Functional Interview Questions & Answers - Purchasing Module - Part III

Explain the P2P process flow

Procure to Pay (P2P) is a process of requesting, purchasing, receiving, paying for and accounting for goods and services.  Procure to Pay Lifecycle is one of the important business Process in Oracle Applications. It’s the flow that gets the goods required to do business.  It involves the transactional flow of data that is sent to a supplier as well as the data that surrounds the fulfillment of the actual order and payment for the product or service.

Create a requisition > Create RFQ > Create a quotation from quote analysis > Generate a PO > Receipt of material > Create Invoice in payables > Transfer to GL

What is an approval hierarchy?

Approval hierarchies let you automatically route documents for approval. There are two kinds of approval hierarchies in Purchasing: position hierarchy and employee/supervisor relationships.

What are the documents that use po_headers_all?

The following are the documents that use po_headers_all

RFQ’s,

Quotations,

Standard Purchase Order,

Planned Purchase Order,

Blanket Purchase Order &

Contracts

Can the original Purchase Order be viewed in any way without resorting to SQL, 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 can be obtained from the po_headers_archive and po_lines_archive tables using the PO_HEADER_ID column as a common reference using SQL only.

Can we automatically ‘Close’ the Purchase order without receiving the full quantity?

The Receipt Close Tolerance lets you specify a quantity percentage within which Purchasing closes a partially received shipment. For example, if your Receipt Close Tolerance is 5% and you receive 96% of an expected shipment, Purchasing automatically closes this shipment for receiving.

When does a Purchase Order line get the Status ‘Closed for Receiving’?

Goods have been received on the system against this line but an invoice has not been
matched to the order.

Can we match an Invoice against a line even when it is ‘Closed for Invoicing’?

The Close for invoicing status does not prevent you from matching an invoice to a purchase 

order or to a receipt.

What does create internal order concurrent request perform?

Create internal order request will transfer the IR info to OM interface tables.

Explain the Receipt Routing

Receipt Routing is of three types: Direct, Standard & Inspection

In Direct once the goods arrive at the destination, we directly move them to a specific Sub-Inv

In Standard once the goods are at the destination, we receive it at the receiving point first and then move them to the Sub-Inv.

In Inspection once the goods are at the destination, we receive it at the receiving point and then we perform inspection and accordingly we either accept it or reject them.

What are the different Purchasing modes in Receiving? 

There are three modes:

Online: Receipts are processed online. If there are any errors, they are shown on the FORM itself, and don’t let you IGNORE and PROCEED.

Immediate: Receipts are processed immediately, but no errors are shown. Errors are recorded in rec_transaction_interface table.

Batch: Receipts are processed in batch, but no errors are shown. Errors are recorded in rec_transaction_interface table.

Note: In all the above two cases, it requires Receiving Transaction Processor to be run periodically.

Which tables are updated a received Data is saved in a form?

rcv_shipment_headers: It contains supplier shipment header data like Shipment date, supplier Name

rcv_transactions_interface It contains received data like Item name, quantity, and receiving location

rcv_shipment_lines

mtl_material_transactions_temp

po_line_locations_all

po_distributions_all

What are the major transactions in Receiving? 

Purchase Order Receipts

Internal Requisition Receipts

Inventory Inter-Org Transfer Receipts

Customer Return Receipts

What is Pay on Receipt AutoInvoice Program?

By running this program, we can automatically create an invoice for a PO when we enter a receipt for the respective PO.

What is Invoice Validation Process?

Before you can pay or create accounting entries for any invoice, the Invoice Validation process must validate the invoice.

Invoice Validation checks the matching, tax, period status, exchange rate, and distribution information for invoices you enter and automatically applies holds to exception invoices. If an invoice has a hold, you can release the hold by correcting the exception that caused Invoice Validation to apply the hold by updating the invoice or the purchase order, or changing the invoice tolerances.

Reference: Collected from various web sources

Please do refer:

http://learnoraclecsbscm.blogspot.in/2015/05/oracle-purchasing-module-scm-functional.html http://learnoraclecsbscm.blogspot.in/2015/08/oracle-scm-functional-interview_56.html  

Oracle SCM Functional Interview Questions & Answers - Purchasing Module - Part II

Oracle SCM Functional Interview Questions & Answers - Purchasing Module - Part II

What is a Purchase Requisition?

A purchase requisition contains the description and quantity of the goods or services to be purchased, a required delivery date, account number and the amount of money that the purchasing department is authorized to spend for the goods or services.

What are the base tables for a Purchase Requisition?

po_requisition_headers_all 

This table stores Header information of a Purchase Requisition. (SEGMENT1 column in this table represents the requisition number)

po_requisition_lines_all

This table stores information about Requisition lines in a Purchase Requisition. This table stores information related to the line number, item number, item category, item description, item quantities, units, prices, need-by date, deliver-to location, requestor, notes, and suggested supplier information for the requisition line.

po_req_distributions_all

This table stores information about the accounting distributions of a requisition line. Each requisition line must have at least one accounting distribution. Each row includes the Accounting Flexfield ID and Requisition line quantity.

What is a Requisition Import Program?

Requisition Import Program (RIP) is a concurrent program, which is used to import requisition from Oracle or third party software. Data is first loaded in po_requisition_all table. RIP concurrent can then be run, to import the records from the interface table as requisition in Oracle Processing.

RIP creates a requisition line and one or more requisition distribution for each row it finds in the interface table. It then groups these lines on Requisitions according to parameters defined

What tables are affected when you run Requisition Import Program?

po_requisition_interface_all

po_req_dist_interface_all

po_interface_errors

What are the reports associated with requisition import process?

Requisition Import Run Report: 

We can view the number of requisitions created and the number of records that showed an error

Requisition Import Exceptions Report: 

In this report we can see all the rows that fail validation.

When will you use a Requisition Template?

Requisition templates can be used to help users to create requisitions quickly. A requisition template contains much of the information needed to create a requisition, thus reducing the amount of data entry required to create a new requisition. If you find yourself repeatedly creating similar requisitions for your group or department, you should consider creating and saving requisition templates as a time-saver.

What is the purpose of choosing a Category when creating a requisition?

The Category box is a required field and is used to define goods and services at a summary or detailed level.

What does the status pre-approved mean?

Pre-Approved is the status of a requisition when an authorized approver has approved the requisition and has forwarded the requisition to another individual to review.

What is the difference between a rejected and a returned requisition?

Only an approver or a reviewer can reject requisition. Only a buyer can return a requisition. A buyer will return a requisition to the preparer for incomplete or inaccurate information.

What is RFQ and differentiate the types of RFQ’s

A Request for Quotation (RFQ) is a formal request sent to the suppliers to find the pricing and other information for an item or items. Based on the information supplied, the supplier quotes a quotation against the RFQ form.

In general, RFQ’s are created before purchasing any item to actually know the price quotes from one or more suppliers.

There are three types of quotations and RFQs that come with Purchasing by default:

Catalog: 

Used for high-volume items or items for which your supplier sends you information regularly. A Catalog quotation or RFQ also includes price breaks at different quantity levels.

Standard: 

Used for items you’ll need only once or not very often, but not necessarily for a specific, fixed quantity, location, and date. For example, you could use a Catalog quotation or RFQ for office supplies, but use a Standard quotation or RFQ for a special type of pen you don’t order very often.

Bid: 

Used for a specific, fixed quantity, location, and date. For example, a Bid would be used for a large or expensive piece of equipment that you’ve never ordered before, or for an item that incurs transportation or other special costs. You cannot specify price breaks for a Bid quotation or RFQ.

What is a Quotation, what are the different types of Quotations available and describe the Quote Analysis?

A quotation is a supplier’s response to RFQ.

Quote analysis is the process of reviewing the quotations given by the suppliers. The best quotation will be selected by analysing certain factors like price, quality, delivery time etc.

What is a Purchase Order and explain the different types of PO’s available

A Purchase order is a commercial document and first official order issued by the buyer to the supplier, indicating types, quantities, and agreed prices for products or services the supplier will provide to the buyer.

There are four types of Purchase Orders:

Standard Purchase Order:

Used for One-time purchases for goods and services. Here you know the item, price, payment terms an delivery schedule

Planned Purchase Order:

Created when you have long-term agreement with the supplier. You must specify the details of goods and services, payment terms and the tentative delivery schedule

Blanket Purchase Agreement:

Created when the details of items and services, payment terms are known but not specific about the delivery schedule

Contract Purchase Agreement:

Created when the terms and conditions of a purchase are known but specific goods and services are not.

What are the base tables that are affected when purchase order is created?

po_headers_all:

This table stores header information of a Purchasing Document. You need one row for each document you create.  (SEGMENT1 column in this table represents the Document number)

po_lines_all:

This table stores the line information of a Purchasing Document

po_line_locations_all:

This table contains the information related to purchase order shipment schedules and blanket agreement price breaks. You need one row for each schedule or price break you attach to a document line.

po_distributions_all:

This table contains the information related to accounting distribution of a purchase order shipment line. You need one row for each distribution line you attach to a purchase order shipment

What is 2-way, 3-way, 4-way matching?

Oracle Payables shares purchase order information from purchasing system to enable online matching with invoices. Invoiced or billed items are matched to the original purchase orders to ensure that you pay only for the goods or services you ordered and/or received.

2–Way Matching: 

Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid.

3–Way Matching: 

Purchase order, receipt, and invoice quantities must match within tolerance before the corresponding invoice can be paid.

4–Way Matching: 

Purchase order, receipt, accepted, and invoice quantities must match within tolerance before the corresponding invoice can be paid.

Reference: Collected from various web sources

Please do refer:

http://learnoraclecsbscm.blogspot.in/2015/05/oracle-purchasing-module-scm-functional.html http://learnoraclecsbscm.blogspot.in/2015/08/oracle-scm-functional-interview_12.html

Oracle SCM Functional Interview Questions & Answers - Purchasing Module - Part I

Oracle SCM Functional - Purchasing:

1. What is 2-way, 3-way, 4-way matching?

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. Difference between Job hierarchy and position hierarchy?  What are the steps involved in setting up Position Hierarchy?

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?

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, buyer is not able to approve it? Which setup is missing?

·           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. If ranks and allocations are provided in Sourcing Rules to Suppliers or Inventory organizations, what is the use of these ranks and allocations and where is it used?

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?

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?

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 Oracle EBS to handle such a requirement?

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?

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?

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?

• 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?

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

In Purchasing Option, Set Cancel requisition to ‘Optionally’ or ‘Always’

14.  What is the functionality I am achieving by setting Receipt close % as 100 %?

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?

In Purchasing option, Set requisition group by parameter to ‘Buyer’

 Reference: Collected from various web sources

Please do refer:

http://learnoraclecsbscm.blogspot.in/2015/08/oracle-scm-functional-interview_56.html http://learnoraclecsbscm.blogspot.in/2015/08/oracle-scm-functional-interview_12.html