Tuesday, 6 September 2011

Create an Inventory Organization in R12 PO


Create an Inventory Organization
Responsibility = Purchasing, Vision Operations
1. Navigate to the Organizations window:
  • (N) Setup > Organizations > Organizations
2. (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
3. 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!).
4. For the Name field in the Organization Classifications region, use the list of values to select Inventory Organization.
5. Select the Enabled check box (use the mouse or the space bar).
6. Save
7. (B) Others
8. In the Additional Organization Information window, select Accounting Information.
9. 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.
16. (T) Inventory Parameters
  • Organization Code = XXM
  • Item Master Organization = Vision Operations
  • Calendar = Vision01
  • Demand Class = West US
17. (T) Costing Information

Account Type
Outside Processing
Material Overhead
Leave field blank
Leave field blank
18. (T) Other Accounts

Account Type
Purchase Price Variance
Invoice Price Variance
Inventory AP Accrual
Cost of Goods Sold
Deferred COGS Account
19. (I) Save
(Enter 1 for Starting Serial Number and click OK when the pop-up note concerning Organizational Costing Methods appears.)
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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