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Inventory Organization

Inventory Organization, is an organization for which you track inventory transactions and balances, and/or an organization that manufactures or distributes products.

Examples of Inventory Organizations


The following applications secure information by inventory organization: Oracle Inventory, Bills of Material, Engineering, Work in Process, Master Scheduling/MRP, Capacity, and Purchasing receiving functions.

To run any of these applications, you must choose an organization that has been classified as an inventory organization.

An Inventory organization may be one of the following:

  • A physical entity like a warehouse where inventory is stored and transacted.
  • A logical entity like an item master organization which only holds items with no transactions.

Organization Structure

Org Structure

Inventory Organization Structure

Inventory Org Structure

Defining Organizations:

Classify the Organization

  • Choose an organization classification to describe the general purpose of your organization.
  • Examples of organization classifications are inventory organization, legal company, and HR organization.
  • Choose inventory organization as your organization classification to use your organization for inventory management.

Set of Books

  • Tie each inventory organization to an operating unit. Each operating unit is associated to a legal entity and a general ledger set of books.

Inventory Parameters

  • Use the Organization Parameters window to complete your organization definition for inventory purposes.
  • Define receiving parameters if you receive items on purchase orders, internal orders, and intransit interorganization shipments.

Things to keep in mind:

  • Sets of Books: You can tie one Oracle General Ledger set of books to each inventory organization.
  • Costing Methods: You set your costing method (Standard or Average) at the organizational level. The item attribute control level determines the costing organization.
  • Item Costs: Oracle Inventory keeps one cost per item per inventory organization.
  • Movement Between Inventory Sites: You can use intransit inventory for interorganization transfers.
  • Planning Method: You can choose how to plan your items.
  • Forecasting: You can forecast your items.
  • Accuracy Analysis: You can perform a cycle count or a physical inventory.