Inventory transactions move items within, into, or out of inventory and change item quantities and locations. The main transaction types are receives, issues, transfers between subinventories or organizations, reservations, miscellaneous adjustments, sales issues, and WIP issues. Inventory control aims to regulate inventory according to predetermined levels to meet demand fluctuations and production needs. It considers factors like product type and volume. Techniques like ABC analysis, min-max planning, reorder points, and kanban aim to optimize inventory levels. Physical inventories periodically count all items to reconcile quantities, while cycle counting focuses on high-value items. Steps include defining the inventory, taking a snapshot, generating tags, counting, adjusting as needed, and pur

1. Oracle SCM Functional Interview Questions & Answers - Inventory Module -
Part III
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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

2. 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

3. 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
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