Purchasing

1) Types of Purchase Orders?

Standard Purchase Order, Planned Purchase order

Blanket Purchase Agreement, Contract Purchase agreement

2) Difference between Purchase Orders?

Standard Purchase Order: You create normally for one time purchasing when
you know what item, what QTY, at what Price, Schedule dates, Terms and
conditions, and accounts.

Planned Purchase Order: It will be used when delivery Schedules not certain
(May be). Exact Schedules will mansion at time of Releases using planned
releases. We have multiple Shipments.

Blanket purchase Agreement: It is a agreement for over a period of time for

agreed amount. You create when user doesn’t know QTY, Delivery schedules,
Accounts, Price of item (may be), and you know Terms and conditions, which
items you are buying.
We have Price Breaks in blanket like (Cumulative and non cumulative)

Contract Purchase Agreement: You Know Only Terms and Conditions Nothing
else…. You doesn’t know what u r buying, when your buying, Price, Qty
You Use standard purchase Orders for Releases.

3) What is the difference between Position Hierarchies and Employee

Supervisor Hierarchy? Which One You Prefer?

If the approval is one to one then you can suggest for employee - supervisor
hierarchy
if the approval is one to many then you can suggest for position hierarchy
Employee-Supervisor:
1. Setup through Employee setup form's supervisor field.
2. Easy initial setup
3. Can be a bit tedious to maintain (e.g.: - a supervisor leaves the company)
4. Fits those companies more, where organization hierarchy does not change
that often.
Position Hierarchy:
1. Positions to be defined first, and then linked up to form position hierarchy
2. Then employees need to be assigned to positions.
3. Initial setup requires more effort
4. Easy to maintain (hierarchy is not broken when a supervisor leaves, and
can be replaced easily)
5. Fits those companies more, where employees’ hierarchy changes quite often.
6. Run “Fill Employee Hierarchy” program
4) Explain P2P Life Cycle?
Create Requisition---- Approve Requisition---Create request For
Quotations---- Analysis Quotations------Create Purchase order----Approve
Purchase Order---- Receipt---- Receive Transactions---- Run pay on
receipt Auto invoice master program---Validate invoice in AP----Enable
Creating Accounting check box--Pay In full---ok ---select the bank—and
make payment

5) What are The Different Types of Documents available in PO?

Purchasing provides the following Document Types: Purchase Agreement, Purchase

Order, Quotation, Release, and Request for Quotation, and Requisition.

You can enter user-defined Document Subtypes only for document types
Quotation and Request for Quotation. You can delete Quotation and Request for
Quotation document types you have created, but only if no actual document exists
for the type.
Purchasing provides the following document subtypes:
Purchase Agreement - Blanket and Contract
Purchase Order - Planned and Standard
Quotation - Bid, Catalog, and Standard
Release - Blanket and Scheduled
Requisition - Internal and Purchase
Request for Quotation - Bid, Catalog, and Standard
Bid - The quotation or RFQ is for a specific fixed quantity, location, and date.
Catalog - The quotation or RFQ includes price breaks at different quantity levels

6) How You Will Generate Purchase requisition and Purchase Orders?

Purchase Requisition can generate manually, or can generate using planning

Methods like min-max, reorder
Purchase Orders Can create Manually, Using Auto create, Concurrent Program Po
requisition to Purchase Order (Work flow create order)

7) How you configured Position Hierarchy?

Define job----Define position----Define employee---- Employee should be Buyer
---- Create responsibilities----Create users & attach the above responsibilities----
Approval Groups----Approval Assignment----Position hierarchies form (sub
ordinate process) ----Financial options enable use approval hierarchy----Run
request (fill employee hierarchy) ---- Create PO and see the notification summery
to check whether system has sent that po for the approval or not
8) How you will enable Hierarchy?
In Financial options Check box ---Enable Position Hierarchy will work
Disable Employee supervisor hierarchy

9) What is Cumulative and Non Cumulative?

In Purchasing options ---- Default---- Price break type
Cumulative: Price Break apply to the Quantity on all release shipments for the
item
Non Cumulative: Price break apply to the Quantity on individual release
shipments to the item

10) What are Matching Methods?

Matching methods are used in Account payables for invoice
2-Way Matching: Match Invoice Qty with PO Qty
3-Way Matching: Invoice Qty with PO Qty and Receipt Qty
4-Way Matching: Invoice Qty with PO Qty, Receipt Qty, and Inspection Qty

11) What is sourcing rule trigger option?

MRP: “Default Sourcing Rule Assignment Set”
PO: “Automatic Document Sourcing”

12) Can you use Approved Supplier List for Two Org?
Global: Yes this ASL entry is valid for all inventory org in your operating unit.
No valid only for Your Org.

13) Can you create Single po for two customers?

No

14) What Is Approved Supplier List?

All procurement organizations maintain lists that associate the items and services
they buy with the companies who supply them, either formally or informally. Data
stored in a controlled, global repository containing relevant details about each
ship–from/ship–to/item relationship, is known as an Approved Supplier List
(ASL). This repository includes information about all suppliers with business
statuses including Approved, Debarred, or New.

Item : Assign a supplier to the particular item

Commodity : Assign a supplier to a group of items belonging to category

(commodity)

Business Type
Direct : company sells their products directly to you
 Manufacturer: Company manufacturers and sells through distributors
Distributor : Company sells product made by manufacturer. You must
associate the distributor with a manufacturer. First define manuf_before distrib

Status : Use one of the default statuses provided, or choose a status of u r own if
u defined other statues in the ASL statuses window. Statuses are NEW,
APPROVED, DIBARRED

Global : Yes this ASL entry is valid for all inventory org in u r operating unit.
No valid only for u r org.

Item Attributes windows to specify blanket purchase agreements, contract

purchase agreements, or quotations as source documents for a particular item and
supplier or particular item category (commodity) and supplier. Purchasing
automatically defaults this source document information, such as the Buyer,
supplier Contact, and Supplier Item Number, for the item or commodity onto the
requisition line. Standard purchase orders get source document information from
global agreements and quotations. Requisitions get source document information
from blanket purchase agreements, contract purchase agreements, or quotations.

Note: Purchasing can also search for the most current source documents for you,
without your setting up the Approved Supplier List, if you set the profile option
PO: Automatic Document Sourcing to Yes.

15) Can you cancel Po when it is in incomplete status?

No

16) When you will use Bid RFQ?

Bid - The quotation or RFQ is for a specific fixed quantity, location, and date.

17) What Is Sourcing Rule?

You can define sourcing rules that specify how to replenish items in an
organization, such as purchased items in plants. Sourcing rules can also specify
how to replenish all organizations, as when the entire enterprise gets a
subassembly from a particular organization.
If there is a conflict between a sourcing rule and a bill of distribution, the sourcing
rule takes precedence.
Enter an allocation percentage for each shipping organization. Allocation
percentage includes the number of planned orders issued to the part for the entire
the planning horizon. Your total allocation may not exceed 100. If the allocation
percentage for all the shipping organizations included within a range of
effectively dates equals 100, Planning Active is checked. If the sourcing rule is
not planning active, the planning process will not use the rule to assign planned
orders.
 Enter a numeric rank value to prioritize each sourcing type. If you have two
sources with the same allocation percentage, planned orders are sourced from the
highest rank first. And Select Shipping Method DLF, Fed X…..

18) Can I Use Sourcing Rule Across Operating Units?

Find Radio Button Org and All Org
Indicate whether this sourcing rule is used for all organizations (global) or a single
organization (local). If the sourcing rule is local, you must enter an organization
name; otherwise, your current organization will be the receiving organization.
Here global means across OUs. The same sourcing rule can be used in a different
OU. If you make the sourcing rule as global then while selecting the supplier site
we can choose a site from a different OU.

19) Types of requisitions in Purchasing?

Internal Requisition
Purchase Requisition

20) Can I send Purchase Order for approval to two persons?

No

21) What is difference between Purchased and purchasable?

Purchased Item is an Item Defining Attribute, it describes Nature of Item.
Purchasable item is an Status Attribute it will define Key Functionality of an item.

22) How You Know Blanket Purchase Agreement Exists for an Item?
In Purchasing Options: Check Box for Notify if Blanket PO exits.
If you enable you will get when you raise Requisition

23) If You Ordered 100 Qty and Receive 110 Qty, for this I am not able to put
Receipt what will be the reason?
Check The Receiving options; Over Receipt Control and Action

24) What is the Document Type Access?

Owner Can Approve to indicate that document preparers can approve their own
documents. This field is not applicable when the Document Type is Quotation or
RFQ.

Attention: If you are using budgetary control and enable this option, you should
also enable the Reserve at Requisition Completion option in the Financials
Options window. Likewise, if you disable this option, you should also disable the
Reserve at Requisition Completion option.
Approver Can Modify to indicate that document approvers can modify
documents. This field is not applicable when the Document Type is Quotation or
RFQ.
 Can Change Forward-To to indicate that users can change the person the
document is forwarded to. This field is not applicable when the Document Type is
Quotation or RFQ.
Can Change Forward-From to indicate that users can change the name of the
document creator. This field is applicable only when the Document Type is
Requisition.
Can Change Approval Hierarchy to indicate that approvers can change the
approval hierarchy in the Approve Documents window. This field is not
applicable when the Document Type is Quotation or RFQ.
Disable a document type. This field is applicable only for user-defined quotations
and RFQs.

25) Document Control Levels?

Security Level
Hierarchy - Only the document owner and users above the owner in the defined
purchasing security hierarchy may access these documents.
Private - Only the document owner may access these documents.
Public - Any user may access these documents.
Purchasing - Only the document owner and users listed as buyers in the Define
Buyers window may access these documents.
Access Level options
Full - Users can view, modify, cancel, and final close documents.
Modify - Users can only view and modify documents.
View Only - Users can only view documents.

26) Document Forward Methods?

Direct - The defaults for the approver is the first person in the preparer's approval
path that has sufficient approval authority.
Hierarchy - The default for the approver is the next person in the preparer's
approval path.

27) Document Control Archive?

The Archive When field is applicable only when the Document Type is Purchase
Agreement, Purchase Order, or Release. Choose one of the following options:
Approve - The document is archived upon approval. This option is the default.
Print - The document is archived upon printing.

28) Can you close Po manually and automatically with out receiving full
quantity?
Yes

29) What is “PRE-APPROVED”?

 Suppose a person having approval authority to approve the document approves it,
but then forwards to some one for additional approval, thus change its Status “Pre
Approved”

If your organization using Encumbrance budgeting and Purchase document is

eligible for approval but funds not at allocated, that time status becomes “Pre
approved” Once funds allocated become “Approved”

30) Can you reopen Closed and Fully Closed PO?

Closed Purchase Order --- Yes U can open
Finally Closed PO---------- No

31) Why person cannot approve his own document?

Document access Check box (Owner can Approve) Enable

32) What is “Run –Fill Employee Hierarchy Process”?

Once You Set position hierarchy U need to run this then only Position Hierarchy
works properly

33) What are fields are grade out when you create blanket PO?
Promised Date and Need By date

34) PO statues?
Approved, Canceled, In process, In Complete, Pre Approved, Rejected, Returned.

35) What are the distribution accounts in po?

Charge, Budget, Accrual, variance

36) What are Line types? Different Line types in Po?

Oracle Purchasing provides the line type feature so that you can clearly
differentiate orders for goods from those for services or outside processing. In
addition, the services related line types support a broad range of service categories
including general business services, consulting services, and contingent labor.
Amount: Receive items by amount. You cannot change the unit of measure and
unit price on purchasing document lines.
Fixed Price: If Oracle Services Procurement is implemented, enter services by
amount only. Receive items by amount. You cannot change the unit of measure
and unit price on purchasing document lines.
Quantity: Receive items by quantity. Outside Processing line types must have this
value basis.
Rate: If Oracle Services Procurement is implemented, enter services by rate
(price) and amount. Receive items by amount.
Attention: You can not change line type attributes after transactions have been
created for that line type.
Enter the Purchase Basis for the line type.
Goods: For quantity value based line types. (Quantity)
 Services: For amount and fixed price based line types.(Amount)
Temp Labor: If Oracle Services Procurement is implemented, for fixed price and
rate based line types

37) What are lookup codes and Quality inspection codes?

Use the Oracle Purchasing Lookups window to define lookup codes in

Purchasing. Purchasing uses lookup codes to define lists of values throughout the
system. A lookup category is called a lookup type, and the allowable values for
the lookup type are called lookup codes. You can add your own codes to those
initially provided for some of the lookup types, depending on your Access Level.

Use the Quality Inspection Codes window to define and update your inspection
codes. You can define as many codes for inspection as you want. Each code must
have a corresponding numerical ranking, which provides an inspection scale. You
use these inspection codes when you receive and inspect the items you ordered.

38) What are Destination Types?

The destination type determines the final destination of the purchased items.
Choose one of the following options:
Expense - The goods are delivered to the requestor at an expense location. The
destination subinventory is not applicable.
Inventory - The goods are received into inventory upon delivery. You can choose
this option only if the item is stock enabled in the ship-to organization.
Shop Floor - The goods are delivered to an outside processing operation defined
by Work in Process. You can choose this option only for outside processing
items.

. AME is possible in PO approval ??

NO. AME for Req approval

Q. Can we create Position heiracchy for Requisition Approval

Yes

Q. vacation rule has to be created by the same user...if being as a first person in the
approver goup the user not able to create vacation rule and goes on leave...then any other way,
by which we can handle that out of scope

Q. Can I get the recording version of yesterda's session?

No.

Q. Where did we do setups for taxes

Ebiz Tax

Q. Is AME diff in 11i and R12

Conceptually, AME is same or 11i and R12 but the look and feel and navigation is completely
different.

Q. Any profile for confidentiality of Quotation?

No. Anybody with access to quote and quote analysis screen has access to quotations

Q. when we delete approved record, if it is by other user, will he be notified for the same
No.

Q. How to protct cofidentialiy and modification of quot from others

- to prevent access to quote screen
- make the quote screen read only

Q. is there any work flow proces behind this?

no

Q. Can we have PO without RFQ or quotes for that matter.

Yes. We can have PO with RFQ and quotes. But its not a good practice.
Purchase Manager can be questioned why he gave order to some supplier. He will always have
2-3 quotes with him.

Q. but for blanket type of PO do you think quotes are required?

2 ways to determine price for an item
- Quotations - document provided by vendor to supply at a price
- Blanket PO - agreement between vendor and us

Q. If we dont want other buyer can see qout of other buyer even they have access to RFQ screen
??
only related buyer only can see his Quot not other one which is not related to him ??
Personalization. Without personalization, its not possible.

Q. Can we copy Catalog RFQ to Standard quotation?

Yes. Copy Catalog RFQ to Catalaog quote or Standard quotation. Copy Bid RFQ to Bid quotation.

Q. Can you show us Creating PO from Requisition having RFQ as Source Doc.
RFQ cannot be source doc. We can have Quote as Source and we will be creating PO from Req
using Quote as Source.

Q. Yes but not for release.

Question not clear

Q. What about negotion process in this ??

Negotiation is possible in Oracle Sourcing. Out of Scope.

Q. Are u going to take Planned Purchase order

Yes. That will be covered later.

Q. Will we cover Schedule release VMIand Consigned.?

Out of scope. Inventory related. Kindly attend Inventory training.

Q. Is there any analytics available in this release to freeze the minimum quote automatically?
No. Quote analysis and approval is a manual process. No automation is provided.

Q. Can you cover the Advance Pricing intergration in Purchasing?

This will be covered conceptually. There wont be any practicals on the same.

Q. What about Bill of distribution??

Sourcing Rules - ASL is required. Will cover Sourcing rules later.

Q. Sourcing means for RFQ ??

Selecting the Source of Supply of material.
Sourcing - Sourcing Rules - automatically create PO from requisitions

Q. While using ASL for Commodity theall items listed under that commodity will get imapcted .
believe it's true can u confirm .
Yes. I will show you guys a chart

Q. How the Supplier status behave differently in Global & Local ASL?
Local ASL will override Global
Local (M1) - debarred Global - Approved

PO for M1 - will not allow

PO for M2 - should allow

But local is specific to that org not for others. so for M2 it should allowed.

Q. what is category level supplier?

The supplier will be ASL for all items which fall under that category.

Q. then where do we define that?

That is defined in ASL

Q. Where do we define the range of items under that category?

Linked while defining Items

Q. AND is approved for Item not for category so Item shoud be presidance. and it should allowed.
Item shoud have more presidance then category.
NO. Category is having higher precedence. So, if a Supplier is debarred for a category then he is
debarred for all items under that category.

Q. Can we create Req to Release Item if is not matching on Requisition and BPA. but ASL is set.
Question is not clear

Q. what if allocation for ASL is <100 %

For manual PR, 100% allocation does not matter. 100% allocation is required only for planned
orders. For manual PR the PO will be raised against the supplier with highest allocation.

Q. What does Sourcing Assignment signify?

Sourcing Assignment will determine which supplier to source an item for a given ORG

Q. If we have one org then can we do transaction in Master Org

Yes. No restriction. Best practice that we should not do any transaction in Master Inv Org.

Q. What isTCA??
Trading Community Architecture. Covered in AR. This is party, customer relationship and stored
in HZ tables.

Q. How intercompany sourcing happens and how PO will be managed in two companies?
Internal Requisition/Internal Sales Orders

Q. What is the need to add the price into price list...when we have given price for the item in
Inventory setup?
Price that we mentioned is the Purchase list price. But for OM, it picks the price from Price list.

Q. While giving the value in Price list...do we add our all the cost and profit in that
For internal items, the transfer price is calculated based on the cost + the transfer options.

Q. What does create internal order conc request do?

Create internal order request will transfer the IR info to OM interface tables.
Q. Why is the cost zero for Internal Orders?
We did not enter any cost for the item, so the cost was zero.

Q. could you please show this cost thing by raising external sales order?
Out of Scope. OM class is required.

Q. Cost is zero for internal sales order, however you told that it will be 10% addition of the cost of
that item then why it is not 10 % addition in the cost?

Q. Why is the cost of the Item zero?

The cost of the Item was zero because we did not enter the cost of the item.

Q. Where do we enter the cost?

We enter the cost while defining the Item.

Q. How does the price default while creating IR?

The price of the item while creating IR, is the cost of the Item.

Q. Can you clarify where we set up zero cost for an Item for IR?
We did not specify the zero for IR. If we do not enter the cost, it will be considered as zero.

Q. Can we change PO Currency?

Yes. We can change PO currency. It defaults from supplier setup but we can change it.

Q. Can you explain what is confirming order ?

Sometimes, the Purchase manager requests for certain items over phone. Then he sends the PO
just to confirm the verbal order. If the vendor thinks that this is a duplicate order and delivers
double, it could cause problem, so he sends a PO with a message that it is confirming order.

What is Difference Between Blanket release and Planned Release?

Blanket release is against blanket purchase agreement and planned release is against planned
orders.

Under what Circumstance we'll use Blanket and Planned Agreement

In blanket, the price of the agreement is fixed but the quantity is not fixed. We get price breaks in
Blanket for volume discounts.
In planned, the shipment is tentative. It does not have any price breaks so no volume discounts.

So, blanket is for high volume transactions.

Q. For planned orders, Schedule is available but blanket is for as and when required?
The schedule in planned Orders is just tentative. The actual schedule is determined later.
Blanket can have an effective date range. Planned does not have any effective date range.

Q. Can you cover Advance Pricing?

Not in scope.

Q. What is the way for adding items or modify BPA from supplier point of view..are they need
have oracle apps installed with Oracle iSupplier portal?
They will have access to Oracle iSupplier portal which is a web based application. No installation
is required.

What is Value Sets? What are Types Of Value Sets?

Oracle Application Object Library uses values; value sets and validation tables as important components of key
FLEXFIELDs, descriptive FLEXFIELDs, and Standard Request Submission. This section helps you understand,
use and change values, value sets, and validation tables. When you first define your FLEXFIELDs, you choose
how many segments you want to use and what order you want them to appear. You also choose how you want to
validate each of your segments. The decisions you make affect how you define your value sets and your values.
You define your value sets first, either before or while you define your FLEXFIELD segment structures. You
typically define your individual values only after your FLEXFIELD has been completely defined (and frozen and
compiled). Depending on what type of value set you use, you may not need to predefine individual values at all
before you can use your FLEXFIELD.
You can share value sets among segments in different FLEXFIELDs, segments in different structures of the same
FLEXFIELD, and even segments within the same FLEXFIELD structure. You can share value sets across key and
descriptive FLEXFIELDs. You can also use value sets for report parameters for your reports that use the Standard
Request Submission feature.
Because the conditions you specify for your value sets determine what values you can use with them, you should
plan both your values and your value sets at the same time. For example, if your values are 01, 02 instead of 1, 2,
you would define the value set with Right–Justify Zero–fill set to Yes.
Value set is nothing but List of Values with validations. We can use the Value Sets when ever the Concurrent
Program has parameters and while defining the Flex Fields. We have to attach the value sets to the Concurrent
Program. Validations are depending on Client Requirement.

Value sets are of 8 types.

There are several validation types that affect the way users enter and use segment or parameter values:
1. None (not validated at all)
2. Independent
3. Dependent
4. Table
5. Special (advanced)
6. Pair (advanced)
7. Translatable Independent
8. Translatable Dependent

You cannot change the validation type of an existing value set, since your changes affect all FLEXFIELDs and
report parameters that use the same value set.

None: You use a None type value set when you want to allow users to enter any value so long as that value meets
the value set formatting rules. That is, the value must not exceed the maximum length you define for your value
set, and it must meet any format requirements for that value set. For example, if the value set does not allow
alphabetic characters, your user could not enter the value ABC, but could enter the value 456 (for a value set with
maximum length of three). The values of the segment using this value set are not otherwise validated, and they do
not have descriptions. Because a NONE value set is not validated, a segment that uses this value set does not
provide a list of values for your users. A segment that uses this value set (that is, a non–validated segment) cannot
use FLEXFIELD value security rules to restrict the values a user can enter.

Independent > An Independent value set provides a predefined list of values for a segment. These values can
have an associated description. For example, the value 01 could have a description of ‘Company 01’. The meaning
of a value in this value set does not depend on the value of any other segment. Independent values are stored in
an Oracle Application Object Library table. You define independent values using an Oracle Applications window,
Segment Values.

Table > A table–validated value set provides a predefined list of values like an independent set, but its values are
stored in an application table. You define which table you want to use, along with a WHERE cause to limit the
values you want to use for your set. Typically, you use a table–validated set when you have a table whose values
are already maintained in an application table (for example, a table of vendor names maintained by a Define
Vendors form). Table validation also provides some advanced features such as allowing a segment to depend
upon multiple prior segments in the same structure.

Dependent > A dependent value set is similar to an independent value set, except that the available values in the
list and the meaning of a given value depend on which independent value was selected in a prior segment of the
FLEXFIELD structure. You can think of a dependent value set as a collection of little value sets, with one little set
for each independent value in the corresponding independent value set. You must define your independent value
set before you define the dependent value set that depends on it. You define dependent values in the Segment
Values windows, and your values are stored in an Oracle Application Object Library table.

Special and Pair Value Sets:

Special and pair value sets provide a mechanism to allow a”FLEXFIELD–within–a–FLEXFIELD”. These value sets
are primarily used for Standard Request Submission parameters. You do not generally use these value sets for
normal FLEXFIELD segments. Special and Pair value sets use special validation routines you define. For example,
you can define validation routines to provide another FLEXFIELD as a value set for a single segment or to provide
a range FLEXFIELD as a value set for a pair of segments.

Translatable Independent and Translatable Dependent :

A Translatable Independent value set is similar to Independent value set in that it provides a predefined list of
values for a segment. However, a translated value can be used. A Translatable Dependent value set is similar to
Dependent value set in that the available values in the list and the meaning of a given value depend on which
independent value was selected in a prior segment of the FLEXFIELD structure. However, a translated value can
be used. FLEXFIELD Value Security cannot be used with Translatable Independent or Translatable Dependent
value sets. For format validation, translatable value sets must use the format type Char. The maximum size must
be no greater than 150. The Number Only option and the Right–justify and Zero–Fill Numbers option cannot be
used with translatable value sets. Range FLEXFIELDs cannot use Translatable Independent or Translatable
Dependent value sets