Oracle functional (snroracle.blogspot.

com/)
(http://snroracle.blogspot.com/2012/08/scm-interviewpreparation.html)
(http://specialist-oracle.blogspot.ae/)
Saturday, 11 August 2012
Oracle SCM functional Interview Question Answers
Contents
Inventory
Costing
Purchasing
Order Management
MPS/MRP
ASCP
BOM
WIP
ECO
Purchasing
1. What is 2-way, 3-way, 4-way matching? Can you give me an example of 2 way matching?
[Complexity **]
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. Tell me difference between Job hierarchy and position hierarchy? What are the steps involved
in setting up Position Hierarchy? [Complexity ***]
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 buyers requisition needs to be approved by senior buyer and senior
buyers 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? [Complexity *]
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, hes not
able to approve it? Which setup are we missing? [Complexity *]
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. We provide ranks and allocations in Sourcing Rules to Suppliers or Inventory organizations,
what is the use of these ranks and allocations and where is it used? [Complexity **]
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 doesnt want to create Requisition in
APPS and use Auto-create functionality in this scenario]. How to handle this requirement?
[Complexity **]
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? [Complexity **]
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 EBS to handle
such a requirement? [Complexity **]
Yes, Using Encumbrance functionality, Each department can be allocated a specific amount and
purchasing would honor this and ensure system doesnt approve PO more than the budgetary
amount.
9. What are the types of receipts and their functions in Purchasing? [Complexity **]

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? [Complexity **]
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? [Complexity *]
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 PreApproved.
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 PreApproved 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? [Complexity *]
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? [Complexity *]
In Purchasing Option, Set Cancel requisition to Optionally or Always
14. What is the functionality I am achieving by setting Receipt close % as 100 %? [Complexity
*]
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? [Complexity *]
In Purchasing option, Set requisition group by parameter to Buyer
Inventory

1. Operating Unit 1 (OU1) has 3 Inventory orgs say M1, M2 and M3 and Operating Unit2 (OU2)
has 3 Inventory orgs say S1,S2 and S3. OU1 & OU2 has different Set Of Books (SOB) and
Legal Entity (LE). Now is it Possible to change the Operating Unit (OU) for Inventory Org S3
from OU2 to OU1
If Possible, what are the Inventory Setup requirement needed? Also, what are all the financial
impacts? [Complexity **]
No, its not possible to change an inventory org from one OU to another.
2. Please explain the concept of 'Genealogy' in Inventory Management? [Complexity **]
Genealogy is the maintained for all Lot controlled and Serial controlled items. Lot Genealogy
tracks the relationship between lots and provides lot traceability that result from inventory
transactions.
Serial genealogy tracks the transaction and multilevel composition history of any serialcontrolled item from receipt through work in process and inventory to your customer sale. The
composition genealogy is captured through material transactions in Oracle Work in Process.
3. During closure of inventory period, system throws an error stating pending transaction exist
for this period? How to resolve this and close the Inventory period? [Complexity **]
Navigate to inventory accounting period, click on the pending task and identify the nature of the
task which is pending and resolve as per issue.
4. What is concept of Multi-org? Whats the purpose of running concurrent request Replicate
Seed Data? [Complexity **]
Multi-org means single installation of Oracle Applications will support multiple organizations
with the use of different Set of Books. Multi-org supports any number of Legal Entities.
Replicate seed data is a concurrent program used to replicate the generic data attributes such as
Supplier, customer header information across OUs. This program is typically run after creation
of new OUs.
5. Whats the difference between Cycle counting and Physical inventory? [Complexity **]
Cycle counting is recurring and more often phenomena compared to Physical inventory. Cycle
counting typically happens for A class items on periodic interval say every quarter.
Physical inventory is done on an annual basis for all items in the inventory.
6. What transactions would be available in Item Supply/Demand form? [Complexity *]
Demand such as Sales order booking
Supply such as Purchase orders, requisitions etc.
7. Which report should I run for viewing item on hand quantity across organization? [Complexity
*]

Multi-organization Quantity Report

8. What are types of managers in Oracle? [Complexity *]
Cost Manager
Lot Move transaction Manager
Move Manager
Material manager

9. Whats the difference between nettable and non-nettable sub inventories? [Complexity *]
Nettable sub inventories are the only sub inventories which are used by MRP/ASCP engines for
identification of any supply for an item
Non Nettable sub inventories are not considered by planning engines as sources of supply.
10. What transactions would be available in Transaction Open interface? [Complexity **]
Transaction Open interface is a key interface through which user can submit transactions.
Transaction open interface can process different transactions to do on hand conversions from
legacy systems and do other transactions like sub inventory transfer, account alias issue / receipts
etc.
The transactions could involve Lot and /or serial controlled items.
11. Whats the difference between Intra-class and Inter-class UOM conversions? [Complexity
**]
UOM conversions that happen within the same UOM class (Quantity, Weight) are known as
Intra-class UOM conversions. (Kg to Pounds)
UOM conversions that happen across UOM class are known as inter-class UOM conversions.
12. In Shipping Networks, whats the role of field FOB? [Complexity **]
Receipt: The shipping organization owns the shipment until the destination
Organization receives it.
Shipment: The destination organization owns the shipment when the from
Organization ships it (and while the shipment is in transit).
In EBS, Free on Board is specified in shipping network for the system to recognize the costing
impact of inter-organization transaction. If FOB is set as Shipment then costing of transaction
would happen during sale order shipment. If FOB is set as Receiving then costing of transaction
would happen during Receipt of item in the requesting organization.
13. What is the purpose of Organization Access? [Complexity *]
Organization Access is used to restrict responsibilities to organization. Once this mapping is set
up, a user logging into an Oracle Manufacturing product is restricted to the organizations mapped

to the responsibility chosen.

14. Client doesnt have business practice of issuing transactions that would drive inventory to
have negative balances, how would you setup this requirement in EBS? [Complexity *]
In organization parameters form, ensure the Allow negative balance checkbox is not checked.
15. Can I perform Sub-inventory transfer to transfer items across organizations? [Complexity *]
Sub inventory transfer can be used to transfer items from one sub inventory to another within a
single inventory organization.

Costing
1. Can you explain the process involved in updating of Frozen costs in Standard costing
organization?
Items are typically assigned to updatable cost type other than Frozen cost type and at the month
end when previous inventory period is closed and new period is not opened, the item costs
defined in user defined cost types are updated to Frozen cost and hence becomes the base cost
for any transaction in the next month.
2. What is concept of Cost group?
Cost group is a unique identifier that is used to identify set of accounts such as Material, Outside
Processing, Material Overhead, Overhead and Resource accounts for an inventory organization.
3. What is FIFO costing? When would variances be recognized in FIFO costing organization?
FIFO (First In, First Out). is a separate perpetual costing method based on actual cost. This
method is also referred to as layer costing. FIFO costing is based on the assumption that the first
inventory units acquired are the first units used.
Variances would be recognized in FIFO organization when transactions occur that drive
inventory negative.
4. What is the concept of Layer costing?
In layer costing, a layer is the quantity of an asset item received or grouped together in inventory

and sharing the same costs. Available inventories are made of identifiable cost layers.
Inventory Layer
Onhand inventory contains layers that are receiptbased (purchased items) or completionbased
(manufactured items).
Work in Process (WIP) Layer
Components issued to a work in process job are maintained in layers within the job itself. Each
issue to WIP represents a separate layer within the job. In addition, each WIP layer consists of
only one inventory layer initially consumed by the issue transaction. The costs of those inventory
layers are held separately within the WIP layer.

5. What is Purchase Price Variance? When would PPV be recognized in the system in a standard
costing organization?
Purchase price variance is the variance that is caused by the difference in PO price and standard
cost of that item in an organization. PPV is recognized at the time delivery transaction of PO
receipt into inventory. In general, its the difference between PO price and Std cost of that item.
6. How to setup Overheads for a department?
Overheads for a department are defined as a sub-element of type overhead. Cost element,
Absorption account and basis is specified for the overhead. Resources which are to account for
this overhead are specified against a cost type in Resources window. The rates applicable for the
resources are specified in Rates window.
7. What are the types of costing supported in Oracle EBS?
Standard
Average
FIFO
LIFO
8. Where can I see the cost updates for an item under standard costing?
Standard cost updates for an item is available under View cost history screen.
9. What is the concept of Standard costing?
Under standard costing, predetermined costs are used for valuing inventory and for charging
material, resource, overhead, period close and job close and schedule complete transactions.
Differences between standard costs and actual costs are recorded as variances.
10. If a client is using LIFO costing and client is operating in a country where inflation is going
down drastically then would client stand to benefit in this environment?

No, FIFO costing would be beneficial in this type of environment.

11. What would happen if item is costed X in Average costing organization and this item is
transferred to another organization which is Standard costing enabled?
Average or transfer cost would be compared to items standard cost and the difference would be
accounted under the variance account.
12. What is the importance of Inventory period closure and its impact in Costing?
Inventory period closure brings a procedural control in the system and thereby ensures that
transactions that occur in a particular period are accounted in that period itself. System would
prevent any transactions in a period which is in closed status.
13. What is the use of Sub-elements in costing?
Sub elements bring a greater item cost visibility and flexibility, EBS allows users to define
multiple material sub-elements. Sub-elements are a smaller classification of the cost elements.
For every sub-element you define, you must enter the method of allocating the cost to the subelement (basis type).
14. What is the use of Multi-org flag in Cost types?
Multi-org flag ensures that cost type defined in one inventory organization is available for other
organizations as well. Multi-org flag ensures that cost type is available for sharing across
organization.
15. What is Transfer Price costing?
Transfer price costing occurs when a sales order is created for an intransit transfer, between two
internal organizations, in two different operating units.
Order Management
1. Client operates in a retail shop environment where most of the goods sold are to the walk-in
customers and wants to use Oracle Order Management. What are the configurations to be done to
support such businesses where quick order entry, entering existing or new customers with ease,
no elaborate picking and shipping process is required?
Workflow of type Bill and Ship only depending on clients requirement. Quick Sales order form
can be used to facilitate order details entry. Generic customer can be defined to account for walkin customers.

2. Whats the use of specifying alternate items in Order Management?

System facilitates order entry user to choose between items which are set as Alternates based on
attributes such as ATP etc. Hence alternate items can be booked if original item is not available
as per customer timelines.
3. Client requires a single delivery for all orders of a customer, what setups needs to be done for
such a requirement?
In Shipping Parameter, set delivery grouping parameter to Customer and Auto create Delivery
criteria as Across Orders.
4. What are Back-to-Back orders and what are the setups involved?
Back to Back orders are orders for which items booked in Sale order is not available in Inventory
and system creates a purchase requisition and tracks the item through creation of Purchase order
from the requisition and finally when PO receipt is made for the item, the receipt quantity is
reserved against the sale order.
Setups include definition of item with attributes such as Built in WIP and Assemble to order
set to Yes. Sourcing rule needs to be defined for the item and sourcing rule should be mapped to
MRP: Assignment set.
5. What are ATO and PTO items?
ATO and PTO are types of Item which are used in OM and Configurator mainly.
ATO or Assemble to Order items are typically items that are built as per the customers
requirement. Hence ATO model is entered in Sales order and end items are chosen from the
configurator window. The workflow of the item creates a Discrete job and chosen item is built in
WIP. Once the Discrete job is complete, the item is available in OM for picking and shipping.
PTO or Pick to order items are items which are picked from inventory based on customer
requirements and then picked and shipped.
6. What are the typical reasons for a line to get backordered during Pick Release?
Primary reasons for line to be backordered are
1. Item is not available in inventory
2. Inventory period is closed
3. Holds are placed against the order or order line.
7. What is the purpose of Trips and Stops?
A trip is an instance of a specific freight carrier departing from a particular location containing
deliveries. A trip is carrier specific and contains at least two stops such as a stop to pick up goods

and another stop to drop off goods, and may include intermediate stops.
8. Client wants to ensure that a particular item when placed in a Sale order is not processed until
Inspection happens and approval is given, how to setup such a requirement?
Create a Hold Source and specify Hold criteria as Item and criteria value as the item name.
9. How to setup Drop shipment cycle in OM?
Oracle Order Management and Oracle Purchasing integrate to provide Drop Shipments. Drop
Shipments are orders for items that your supplier ships directly to the customer either because
you don't stock or currently don't have the items in inventory, or because it's more cost effective
for the supplier to ship the item to the customer directly.
In the sale order, specify the Source type as External. Purchase Release program should be run
and post this program, requisition import program should be run.
10. What is the purpose of Interface Trip Stop?
Interface Trip Stop creates the sales order issue transaction and thereby depletes the inventory to
the sale order shipped quantity. As part of ITS, COGS account gets generated.
11. What is RMA and what are the scenarios when RMA cycle would be used?
If I have shipped an order via Order Management to a wrong customer or the wrong
item/quantity has been shipped, then I will do an RMA transaction in Inventory to bring the item
back. This will generate a credit memo in AR.
If the customer finds that item is faulty or defective, then he returns the shipment to us. In this
case too, we will create an RMA in Inventory and receive the item back. This again creates a
credit memo.
12. How to setup credit hold in Order Management?
Credit hold setups include setting up
Customer site level Credit check must be enabled, Amount and currency must be specified
Payment term Credit check must be enabled
Credit check rule Credit check rule must be defined.
Order type Credit check Rule must be mapped as required
13. How to setup quantity discounts in Price lists?
Quantity discounts are handled by specifying Price breaks by giving quantity and corresponding

price applicable.
14. What is the purpose of scheduling a sale order?
Scheduling a sales order ensures that line is available for Picking and further transactions
applicable. Also, Scheduling looks at sourcing rules to determine the source of the item specified
in order line. Scheduling honors Promise date and Latest Acceptable date whichever is applicable
as per setups.
15. What are processing constraints in OM?
Processing constraints ensure that user doesnt violate any business process or system defined
process by putting checks on various actions performed by user.
Typically actions such as cancelling orders are governed by processing constraints.
MPS/MRP
1. What are demand classes?
Demand classes allow you to segregate scheduled demand and production into groups, allowing
you to track and consume those groups independently. A demand class may represent a particular
grouping of customers, such as governmental and commercial customers, or it may represent
sales channels or regions. Demand classes may also represent different sources of demand, such
as retail, mail order, and wholesale.
2. What is expected delivery date?
Excepted delivery date is number of days that system allows orders to arrive before they are
needed.
The Acceptable Early Days item attribute is defined in Oracle Inventory. Oracle Master
Scheduling/MRP and Supply Chain Planning does not generate a reschedule out
recommendation if the number of days the order is going to arrive early is less than the
acceptable early days delivery. This allows you to reduce the amount of rescheduling activity
within a material plan.
3. On what criteria are requisitions released via the planner workbench?
System looks at orders and ensures there exist no compression days for those orders i.e.
recommendation of those orders doesnt involve reduction of procurement lead times.
4. What is Forecast consumption?
Forecast consumption replaces forecasted demand with actual sales order demand. Each time

you create a sales order line, you create actual demand. If the actual demand is already
forecasted, the forecast demand must be decremented by the sales order quantity to avoid
counting the same demand twice.
5. What are the uses of Master scheduling?
Master scheduling is used for:
demand management
scheduling production
validating the production schedule
managing the production schedule
You use the schedules generated by master scheduling as input to other manufacturing functions,
such as material requirements planning and rough-cut capacity planning.
6. What are the demand types used in MDS?
Demand types of Master Demand Schedule include
Item forecast
Sales order
Internal Requisition
Spares demand
7. What is meant by schedule reliefs?
Schedule reliefs are MDS entries to be decremented when you create purchase orders, purchase
requisitions or discrete jobs. System would show the unfulfilled demand by performing relief
operations.
8. What is Demand time fence and Planning time fence?
Demand time fence is the period of time where system only considers Sales order demand and
ignores forecast demand in that period.
Planning time fence is the period of time where plan doesnt suggest any orders and considers
the existing demand/supply to be frozen.
9. What is the purpose of Planning Manager?
The Planning Manager is a background concurrent process that performs automatic forecast
consumption as you create sales orders.
10. What is the difference between Shrinkage Rate and Component yield?
Shrinkage Rate
For a particular inventory item, you can define a shrinkage rate to describe expected scrap or

other loss. Using this factor, the planning process creates additional demand for shrinkage
requirements for the item to compensate for the loss and maintain supply.
For example, if you have a demand of 100 and a discrete job for 60, the planning process would
suggest a planned order for 40 to meet the net requirements, assuming no shrinkage rate exists.
With a shrinkage rate of .2 (20%), Oracle Master Scheduling/MRP and Supply Chain Planning
assumes you lose 20% of any current discrete jobs and 20% of any suggested planned orders. In
this example, since you have a discrete job for 60, assume you lose 20% of that discrete job, or
60 times 20%, or 12 units. The net supply from the discrete job is 48. Since you have a total
demand of 100 and supply of 48, you have a net requirement of 52 units. Instead of suggesting a
planned order for 52, the planning process has to consider that 20% of that planned order is also
lost to shrinkage.
Component yield
Component yield is the percentage of a component on a bill of material that survives the
manufacturing process. A yield factor of 0.90 indicates that only 90% of the usage quantity of the
component on the bill actually survives to be incorporated into the finished assembly.
The difference between a shrink rate and component yield is that Oracle Master Scheduling/MRP
and Supply Chain Planning applies the same shrink rate to every use of an item on a bill,
whereas you can vary the component yield factor you assign to each occurrence of an item on a
bill. Another difference is that shrinkage demand is calculated at the parent assembly level and
passed down to components. Component yield is calculated at the component level.
ASCP
1. What is the difference between ASCP and MRP?
ASCP allows users to perform holistic planning by taking into consideration multiple
organizations in an EBS instance where MRP plan considers only one inventory organization and
multiple plans needs to be created for multiple organizations. ASCP allows constraint planning
thereby taking into consideration supplier, organization capacity where as MRP only facilitates
unconstraint planning.
2. What is the difference in running an ECC and EDD plan?
ASCP plan with Enforce capacity constraints option ensures that all capacity constraints are
honored which might result in demand due date getting pushed in to future.
ASCP plan with Enforce demand due date constraint option ensures that demand due date is
given the priority and plan would overload Supplier or resource capacities to honor the Demand
due date.
3. What is the role of Memory based planner?
The planning engines Memory Based Planner calculates the planned order demand due dates for

dependent demands based on the actual requirement date with respect to lead-time. It saves the
calculated requirement date based on the lead-time value for subsequent calculation.
4. Explain the process of data collection?
The data collection process consists of the Data Pull and the Operational Data Store (ODS) Load.
The collection process lets you collect across Oracle Application Versions.
The two types of collections process are standard and continuous.
Standard collections process: Using the standard collections process, you can
manually run three types of collection methods including a complete refresh, a net change
refresh, or a targeted refresh on specific business entities.
Continuous collections process: The continuous collections process is an automated process of
data collection that efficiently synchronizes the data on the planning server by looking up the
sources. If you opt for continuous collections, the system automatically determine the type of
collection that needs to be run on entities selected by you. The continuous collections process
collects data from the sources with the least user intervention. The Continuous Collections
concurrent program performs continuous collections.
5. What is the architecture of ASCP?
Oracle Advanced Planning Suite has a component architecture that separates the transaction data
and associated processing (for example, inventory receipts and order entry) in a source instance
from the planning calculations done in a destination instance. This allows planning calculations
to be done on a different physical machine than the machine that performs transactions and
results in better system response. It also allows planning calculations (demand planning,
inventory planning, supply planning and order promising) to be applied simultaneously to
information from across multiple source instances, which is useful when transaction information
for a global supply chain is spread across multiple instances.
6. What is the purpose of exception messages?
The planning engine issues exception messages (exceptions) to:
Alert you to a situation that may need your intervention, for example, a past due sales order
Recommend that you perform an action, for example, change the date of a supply order
The planning engine issues certain exceptions for all plan types and others for only certain plan
types.
The planning engine only issues exceptions against items and resources that have exception sets
assigned to them.
7. What is meant by Hub and Spoke Planning?
Oracle Advanced Supply Chain Planning provides you with the option of using

demands from all planned orders during hub and spoke planning. When you use your plans as
demand schedules to other plans, the planning engine considers all planned orders in the source
plan as demands and explodes down the bills of material creating demands for the lower level
components.
Hub and spoke planning uses a multi-plan approach where you can plan across
the supply chain at the top level and then release planned orders to a lower level
manufacturing plan for all MRP planned items. The top level plan includes only end items or end
items with critical sub-assemblies, and typically only the final assembly plants. The lower level
plan (MRP) is at the component level and includes the final assembly plants and the component
manufacturing plants. Hub and spoke planning is a commonly used term for this type of subset
planning.
8. What is the difference between component substitution and End item substitution?
Oracle ASCP supports two types of substitution: component substitution and end-item-level
substitution.
The term end-item refers to the finished good or saleable product. End-item-level substitution is
an acceptable business practice in many industries. It is often possible to fulfill customer demand
on time when the requested item is not available by substituting a more functionally rich product.
Substitution is also done to use up existing inventory of older, functionally equivalent items.
Component substitution refers to substitution of component of BOM with another component.
9. What is purpose of setting Demand Priority rules?
Demand Priority rules guide the constraint plan in terms of identifying supply for demand based
on the user defined rule.
Demand quantities that are pegged to planned order supplies are considered in internal priority
order. Demands with higher internal priority get the first opportunities to take up available
resource and material capacities; demands with lower internal priorities can only use remaining
resource and material capacities and are therefore more likely to be satisfied late.
10. How is organization security maintained in ASCP?
Organization security restricts plan information access to authorized individuals. Oracle ASCP
allows users to associate job responsibilities to organizations for security purposes. This ensures
that you see/change planning data in an organization only if you have a job responsibility
associated with the organization.
BOM

1. What is bill looping? How would you check for any looping in bills?
Bill loops occur when a bill is assigned as a component to itself somewhere in the multilevel
structure of the bill. The loop check program searches for such loops.
2. What is meant by Charge type in a Resource definition?
Charge type determines how each resource is charged in Work in Process. When an operation
completes, Work in Process records the units applied to the job or repetitive schedule in the
resource unit of measure. You can charge resources manually or automatically.
Manual: Work in Process does not automatically charge this type of resource to a job or
repetitive schedule. You must manually charge it to a job or repetitive schedule using Work in
Process.
PO Receipt: Automatically charge this resource upon receipt of a purchase order in Oracle
Purchasing. The assemblies are not automatically moved to the next operation upon receipt, so
you must manually move them using Work in Process.
PO Move: Automatically charge this resource upon receipt of a purchase order in Oracle
Purchasing and move the assemblies to the Queue intraoperation step of the next operation, or to
the To move intraoperation step if this is the last operation.
WIP Move: Work in Process automatically charges this type of resource to a job or repetitive
schedule when you complete an operation.
3. What are supply types available for BOM in EBS?
A bill of material component field that controls issue transactions from inventory to work in
process. Supply types supported by Work in Process include: Push, Assembly pull, Operation
pull, Bulk, Supplier, Phantom, and Based on bill.
4. What is extended quantity in BOM?
Extended quantity takes into consideration scrap resulting from operations performed. Scrap is
modeled in the system by specification of shrinkage rate.
The extended quantity of the component used in the parent item is calculated as follows:
((explosion quantity of parent item x component usage quantity) / component yield) / (1shrinkage rate for parent)
5. What is Alternate resource? How to setup Alternate resource?
Alternate resources can be defined for each resource. You can define an alternate resource or set
of alternate resources to describe a different manufacturing step used to produce the same
product. Alternate resource is set at Routing > Operation Resource level.

6. What is Common BOM? How to create Common BOM?

An assembly that uses the bill of material of another assembly as its bill. This enables you to
reduce your maintenance effort by sharing the same bill structure among two or more assemblies.
For example, if you have identical bills of material that produce the same product in two
different organizations, you can define common bills of material for the identical structures.
Common BOM are created based on primary BOM by specifying the organization to which the
BOM needs to be referenced.
7. What is Planning Bill of Materials?
A bill of material for a planning item that contains a list of items and planning
percentages. You can use a planning bill to facilitate master scheduling and/or material planning.
The total output of a planning bill of material is not limited to 100% (it can exceed this number
by any amount).
8. What is Simulation Sets?
A group of capacity modifications for resource shifts to simulate, plan, or schedule capacity.
9. What is difference between Cumulative Manufacturing lead time and Cumulative total lead
time?
Cumulative manufacturing lead time
The total time required to make an item if you had all raw materials in stock but had to make all
subassemblies level by level. Bills of Material automatically calculates this value. Purchased
items have no cumulative manufacturing lead time.
Cumulative total lead time
The total time required to make an item if no inventory existed and you had to order all the raw
materials and make all subassemblies level by level. Bills of Material automatically calculate this
value.
10. How do you model by-products in BOM?
Material produced as a residual of a production process. By-product components are represented
by negative usage in the bill of material for an assembly.
WIP
1. What are the differences between standard and non-standard discrete jobs?

Non-standard jobs are similar to standard jobs, however, there are noteworthy
differences including:
Non-standard jobs are more flexible than standard jobs. Because of this they can be used to
manage such varying activities as rework, field service repair, upgrades, disassembly,
maintenance, engineering prototypes, and other miscellaneous projects.
Oracle planning products do not create planned orders or reschedule
recommendations for non-standard jobs. You must manually define and reschedule non-standard
jobs. However, if a non-standard job is assigned an assembly bill of material, a routing, or both,
planning considers the job's material requirements as demand and its assemblies as supply.
Oracle planning products do not deduct scrapped assemblies from the MRP net
quantity, or deduct the MRP net quantity by the item shrinkage rate for
non-standard jobs. As such, you must identify planned assembly shrinkage by
entering an MRP net quantity that is less than the job quantity.
2. What is the difference between Discrete and Repetitive manufacturing?
Standard discrete jobs control the material, resources, and operations required to build an
assembly and collect its manufacturing cost.
Non-standard discrete jobs control material and collect costs for miscellaneous manufacturing
activity. They may or may not build an assembly. This type of activity can include rework, field
service repair, upgrade, disassembly, maintenance, engineering prototypes, and other projects.
3. What is the purpose of using WIP accounting class?
Standard discrete accounting classes can be used to group job costs. For example, if you build
subassemblies and finished goods, you can define your accounting classes so that you can
separately value and report the costs associated with subassembly and finished goods production.
Standard discrete accounting classes can be automatically defaulted when you create discrete
jobs.
4. What is back flushing?
When you complete assemblies, all components with the supply type of Assembly pull are
automatically backflushed. When components for assemblies under lot control, serial number
control, or lot and serial control are backflushed upon assembly completion, you must assign lot
and/or serial numbers to the components.
Backflush components are issued in the quantity and item as defined on the bill of material.
5. What would be scenario if the Discrete job on which OSP operation exists is closed before the
receipt of OSP item?
If Discrete job which has OSP operation is closed before receipt of the OSP item, then the

resource transaction would cost this transaction would error out.

Typically, system warns the user when user tries to close such discrete jobs.
6. What is the criteria system checks when linking Sales order to Discrete job?
When linking ATO sales orders and jobs, however, the following rules are applied:
Assembly item cannot be a Pick-to-order item
Sales order line item must be demanded, but not yet shipped
Assembly item must be a standard item or an ATO item, not a model or an option

7. What is Outside processing? What are the modules involved in OSP?

Oracle Manufacturing enables you to include supplier-sourced components and resources in your
manufacturing processes. Features include:
Using specialized supplier skills in your manufacturing process to help lower engineering and
manufacturing costs and increase production quality
Using supplier capacity to increase your overall production capacity.
Outside processing items represent supplier-sourced items, resources, and services that you
include in your build process. These items can be non-stocked items which represent the actual
supplier contribution in your build process or you can define the assembly itself as an outside
processing item. The outside processing item is the item on your requisition or purchase order
and the item you receive in your purchase order receipts.
Modules involved are Inventory, Purchasing and WIP
8. What is the difference between Detailed Scheduling and Dynamic lead-time offsetting?
WIP Scheduling uses routing details for calculation job/operation start and end dates. This is
called "Detailed Scheduling".
If you are using MRP/ASCP, Dynamic lead time offsetting is the scheduling method used and it
uses the Fixed and Variable lead time defined in Item master.
9. If OSP requisition needs to be generated at the time of move transaction to that particular
operation then what are the setups required for handling this scenario?
In WIP parameters form, specify Requisition creation time as At Operation.

10. Client wants to track the value of transactions that is being scrapped during an operation,
what are the setups required to handle this scenario?
In WIP parameters form, specify one of the inter-operations steps as Scrap and Require Scrap
account is checked.

ECO
1. What is the purpose of Auto-implement Manager?
Auto-Implement Manager runs at the specified dates and times and automatically implements
items whose schedule dates occur on or before the current date. Engineering change orders or
revised items whose status is scheduled are automatically implemented.
2. What is a prototype?
Engineering enables you to create engineering items, bills of material and routings the same way
you define manufacturing item information. Each item defined in Engineering is assigned to
engineering. You can define engineering items and assign item attribute details as you do for
manufacturing items.
3. What is Use-up date?
The use-up date is the date when on-hand quantity is exhausted based on projected gross
requirements. It calculates the use-up date by applying any on-hand quantity in inventory
(supply) against any gross requirements (demand).
4. How is ECO lifecycle being maintained in EBS?
Engineering uses two ECO status fields to control the ECO life cycle: ECO Status and ECO
Approval Status.
You can open, hold, release, schedule, implement, or cancel a revised item or an ECO.
Engineering does not let you set the ECO Status field to Implemented or Scheduled if the
approval status has not been set to Approved.
5. What is the purpose of Approval Lists?
You can define lists of approvers required to approve an ECO before it can be released. Oracle
Engineering notifies the people on the list, using an alert, that the ECO requires their approval.
1.