Practice - Create an Inventory Organization

Distribution
R12 Oracle Purchasing Fundamentals

Ownership
The Job Title [list@YourCompany.com?Subject=LABxxxxx] is responsible for ensuring that this document is necessary and that it reflects actual practice.

Copyright Oracle Corporation, 2001. All rights reserved.

Practice - Create an Inventory Organization Effective 05/11/02

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Practice - Create an Inventory Organization

Overview
As a part of initial Purchasing setup, in this practice you will create an inventory organization to be used in later practices.

Assumptions
Replace XX with your terminal number or initials. You must have access to an Oracle Application Vision database or comparable training or test instance at your site on which to complete this practice. Logon to the system using the XXUSER you created earlier.

Tasks
Create an Inventory Organization Responsibility = Purchasing, Vision Operations In the Organizations window create a plant XXManufacturing that is an Inventory Organization in Vision Operations. Assign the Organization to an Existing Item Master In the Additional Organization Information window give your new Inventory Organization a code of XXM and assign it to Vision Operations. Be sure to set up appropriate GL accounts for both Costing Information and Other Accounts. Specify Receiving Information In the Additional Organization Information window, enter appropriate Receiving Information for your Inventory Organization.

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Practice - Create an Inventory Organization Effective 05/11/02

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Solution - Create an Inventory Organization

Create an Inventory Organization Responsibility = Purchasing, Vision Operations 1. Navigate to the Organizations window: 2. (N) Setup > Organizations > Organizations

(B) New Name = XXManufacturing Type = Plant Enter a date in the From field early enough for any historical information that you need to enter. (The default is the current date.) To Date = Leave Blank Location = XXManufacturing Save Note: Multiple inventory organizations can share the same physical location if the Inventory Organization field associated with the Location was left blank (as in the prior exercise!).

3.

4. 5.

For the Name field in the Organization Classifications region, use the list of values to select Inventory Organization. Select the Enabled check box (use the mouse or the space bar).

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6. 7. 8. 9.

Save (B) Others In the Additional Organization Information window, select Accounting Information. OK, then click in the Accounting Information field. Primary Ledger = Vision Operations Legal Entity = Vision Operations Operating Unit = Vision Operations.

10. OK 11. OK 12. (B) Yes to save changes. 13. Close the Organization Parameters window but do NOT close the Organization window. Assign the Organization to an Existing Item Master 14. Re-open the Organization Parameters window: (B) Others

15. In the Additional Organization Information window, select Inventory Information.

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Practice - Create an Inventory Organization Effective 05/11/02

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16. (T) Inventory Parameters Organization Code = XXM Item Master Organization = Vision Operations Calendar = Vision01 Demand Class = West US 17. (T) Costing Information
Account Type Material Outside Processing Material Overhead Overhead Resource Expense Account 01-000-1410-0000-000 01-000-1450-0000-000 01-000-1420-0000-000 01-000-1430-0000-000 Leave field blank Leave field blank

Copyright Oracle Corporation, 2001. All rights reserved.

Practice - Create an Inventory Organization Effective 05/11/02

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18. (T) Other Accounts

Account Type Purchase Price Variance Invoice Price Variance Inventory AP Accrual Sales Cost of Goods Sold Deferred COGS Account Account 01-540-5210-0000-000 01-540-5220-0000-000 01-000-2215-0000-000 01-540-4160-0000-000 01-540-5200-0000-000 01-540-5200-0000-000

19. (I) Save (Enter 1 for Starting Serial Number and click OK when the pop-up note concerning Organizational Costing Methods appears.)
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Note: A huge difference between a Location and an Inventory Organization is that Inventory Organizations determine a lot of accounting that gets sent to the General Ledger! For Purchasing, we are mainly concerned about Purchase Price Variance, Invoice Price Variance and Inventory AP Accrual accounts. 20. Close the Organization Parameters window but do NOT close the Organization window. Specify Receiving Information 21. Re-open the Organization Parameters window: (B) Others

22. In the Additional Organization Information window, select Receiving Information. Days Early = 5 Days Late = 5 Receipt Days Exceed-Action = Warning Tolerance = 5% Over Receipt Action = Warning Receipt Routing = Standard Allow Unordered Receipts = Checked Allow Express Transactions = Checked Allow Cascade Transactions = Checked Next Receipt Number = 1000 Receiving Inventory Account = 01-000-1410-0000-000 Clearing Account = 01-000-2929-0000-000 23. (B) Save and exit window.

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Practice - Create an Inventory Organization Effective 05/11/02

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