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Why do we need Oracle Inventory?

Oracle Inventory meets the following business needs of an organization:

Building the enterprise structure


Creating item numbers
Monitoring inventory on an ongoing basis
Maintaining accurate on-hand balances
Planning material replenishments
Forecating demand

Building the Enterprise Structure


Before you use Oracle Inventory, you need to setup one or more organizations. Organizations
represent distinct entities in your company and can include separate manufacturing facilities,
warehouses, distribution centers, and branch offices

How the blocks come together in 11i


In Release 11i, an organization structure would essentially consist of the following building
blocks:

Set of Books
This entity is defined in Oracle General Ledger. The Set of Books is defined by the three Cs
Currency, Calendar and Chart of Accounts.

Legal Entity
This is defined as an organization of type GRE/Legal Entity using the Inventory Responsibility.
This is a legal company for which you prepare fiscal or tax reports.
The Legal Entity has to be assigned a pre-defined Location. It must then be associated to an
existing Set of Books. So the Set of Books has to be defined before a Legal Entity.

Operating Unit
This is defined as an organization of type Operating Unit using the Inventory Responsibility. The
Operating Unit is an organization that uses Oracle, Cash Management, Order Management and
Shipping Execution, Oracle Payables, Oracle Purchasing and Oracle Receivables.
The operating unit may be a sales office, a division or a department. The Operating Unit has to
be assigned to a Legal Entity and a Set of Books.

Inventory Organization
This is defined as an organization of type Inventory Organization using the Inventory
Responsibility. An inventory organization can be a physical entity like a warehouse where
inventory is stored and transacted or it can be an organization that manufactures and distributes
products or both. An inventory organization can also be a logical entity like an item master
organization which only holds items with no transactions.

The Inventory Organization has a costing method, a workday calendar, and a list of items. It
stores information from Oracle Inventory, Bills of Material, Work in Process, Supply Chain
Planning and Purchasing receiving functions.
The Inventory Organization has to be assigned to an Operating Unit, a Legal Entity and a Set of
Books. The inventory organization would have subinventories and locations defined underneath
it.

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