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Oracle Purchasing Functional Interview Questions and Answers
#1
Oracle Purchasing is the application for professional buyers that streamlines purchase order processing while strengthening policy compliance. It is a key component of Oracle Advanced Procurement.

Oracle Purchasing integrates with other modules like Inventory, GL, AP etc and offers a comprehensive procurement solution which helps purchasing professionals reduce the administration costs and thereby Processing  requisitions, requests for quotations,  purchase orders, and receipts quickly and efficiently.
It enables you to focus on Value Analysis, Development of strategic supplier relationships and Management of the procurement process
Oracle Purchasing replaces paper processing with online requisition generation, purchase-order creation, and document approval. It also regulates document access, controls modification activity and approval, and is based on organizational signature and security policies.





1.   What is a Purchase Requisition and define various requisitions

It is a formal request intended to procure/buy something that is needed by the organization. It is created and approved by the department requiring the goods and services.
A purchase requisition typically contains the description and quantity of the goods or services to be purchased, a required delivery date, account number and the amount of money that the purchasing department is authorized to spend for the goods or services. Often, the names of suggested supply sources are also included.
Basically, requisitions are of two types:
Internal requisition and purchase requisition
Internal Requisitions are created if the Items are to be obtained from one Inventory location to another location within the same organization. Here the source of the requisition would be INVENTORY. There is no approval process for internal requisition.
Purchase Requisitions are created if the goods are obtained from external suppliers. Here the source of the requisition would be SUPPLIERS. The purchase requisitions are sent for approvals.
2.   What are the base tables for a Purchase Requisition?
PO_REQUISITION_HEADERS_ALL (SEGMENT1 column in this table represents the requisition number)
This table stores Header information of a Purchase Requisition.
Important columns of this table:
REQUISITION_HEADER_ID:                     It is a unique system generated Requisition identifier
PREPARER_ID:                                         It is a unique identifier of the employee who prepared  the requisition
SEGMENT1:                                             It is the Requisition number
AUTHORIZATION_STATUS:                      Authorization status type
TYPE_LOOKUP_CODE:                            Requisition type
ORG_ID:                                                  Unique Operating unit unique identifier
PO_REQUISITION_LINES_ALL
This table stores information about Requisition lines in a Purchase Requisition. This table stores information related to the line number, item number, item category, item description, item quantities, units, prices, need-by date, deliver-to location, requestor, notes, and suggested supplier information for the requisition line.
Important columns of this table:
REQUISITION_HEADER_ID:               It is a unique system generated Requisition identifier
REQUISITION_LINE_ID:                     Link between PO_REQUISITION_LINES_ALL And PO_REQ_DISTRIBUTIONS_ALL
LINE_NUM:                                        Indicates the Line number
LINE_TYPE_ID:                                   Indicates the Line type
CATEGORY_ID:                                   Unique Item category identifier
ITEM_DESCRIPTION:                          Description of the Item
QUANTITY NUMBER:                         Quantity ordered
PO_REQ_DISTRIBUTIONS_ALL
This table stores information about the accounting distributions of a requisition line. Each requisition line must have at least one accounting distribution. Each row includes the Accounting Flexfield ID and Requisition line quantity.
Important columns of this table:
DISTRIBUTION_ID:                               Unique Requisition distribution identifier
REQUISITION_LINE_ID:                        Unique Requisition line identifier
CODE_COMBINATION_ID:                    Unique General Ledger charge account identifier
DISTRIBUTION_NUM:                           Distribution number
3.   What is a Requisition Import Program?
It is a concurrent program, which is used to import requisition from Oracle or Non-Oracle system.
Data is first loaded in PO_REQUISITION_ALL table. The RIP can then be run, to import the records from the interface table as requisition in Oracle Processing.
RIP creates a requisition line and one or more requisition distribution for each row it finds in the interface table. It then groups these lines on Requisitions according to parameters defined
4.   What tables are affected when you run Requisition Import Program?
PO_REQUISITION_INTERFACE_ALL
PO_REQ_DIST_INTERFACE_ALL
PO_INTERFACE_ERRORS
5.   What are the reports associated with requisition import process?
Requisition Import Run Report: We can view the number of requisitions created and the number of records that showed an error
Requisition Import Exceptions Report: In this report we can see all the rows that fail validation.
6.   When will you use a Requisition Template?
Requisition templates can be used to help you quickly create requisitions. A requisition template contains much of the information needed to create a requisition, thus reducing the amount of data entry required to create a new requisition. If you find yourself repeatedly creating similar requisitions for your group or department, you should consider creating and saving requisition templates as a time-saver.
If the data of requisition remain the same for repeated purchase of an item, the information can be copied to a template and the same can be copied to the Requisition as many number of times as required.
7.   What is the purpose of choosing a Category when creating a requisition?
The Category box is a required field and is used to define goods and services at a summary or detailed level.
8.   What does the status pre-approved mean?
Pre-Approved is the status of a requisition when an authorized approver has approved the requisition and has forwarded the requisition to another individual to review.
9.   What is the difference between a rejected and a returned requisition?
Only an approver or a reviewer can reject requisition. Only a buyer can return a requisition. A buyer will return a requisition to the preparer for incomplete or inaccurate information.
10.   What is RFQ and differentiate the types of RFQ’s
A Request for Quotation (RFQ) is a formal request sent to the suppliers to find the pricing and other information for an item or items. Based on the information supplied, the supplier quotes a quotation against the RFQ form.
In general, RFQ’s are created before purchasing any item to actually know the price quotes from one or more suppliers.
In Oracle EBS, RFQ’s can be auto created from an existing Purchase Requisition or can be a fresh RFQ.
There are three types of quotations and RFQs that come with Purchasing by default:
  • Catalog: Used for high-volume items or items for which your supplier sends you information regularly. A Catalog quotation or RFQ also includes price breaks at different quantity levels.
  • Standard: Used for items you’ll need only once or not very often, but not necessarily for a specific, fixed quantity, location, and date. For example, you could use a Catalog quotation or RFQ for office supplies, but use a Standard quotation or RFQ for a special type of pen you don’t order very often. A Standard quotation or RFQ also includes price breaks at different quantity levels.
  • Bid: Used for a specific, fixed quantity, location, and date. For example, a Bid would be used for a large or expensive piece of equipment that you’ve never ordered before, or for an item that incurs transportation or other special costs. You cannot specify price breaks for a Bid quotation or RFQ.
11.   What is a Quotation, what are the different types of Quotations available and describe the Quote Analysis?
A quotation is a supplier’s response to RFQ.
Quote analysis is the process of reviewing the quotations given by the suppliers. The best quotation will be selected by analyzing certain factors like price, quality, delivery time etc.
12.   What is a Purchase Order and explain the different types of PO’s available
A Purchase order is a commercial document and first official order issued by the buyer to the supplier, indicating types, quantities, and agreed prices for products or services the supplier will provide to the buyer.
Basically, there are four types of Purchase Orders, viz
Standard Purchase Order
Used for One-time purchases for goods and services. Here you know the item, price, payment terms an delivery schedule
Planned Purchase Order
Created when you have long-term agreement with the supplier. You must specify the details of goods and services, payment terms and the tentative delivery schedule
Blanket Purchase Agreement
Created when the details of items and services, payment terms are known but not specific about the delivery schedule
Contract Purchase Agreement
Created when the terms and conditions of a purchase are known but specific goods and services are not.
[b]13.   What are the base tables that are affected when you create a P.O?[/b]
PO_HEADERS_ALL (SEGMENT1 column in this table represents the Document number)
This table stores header information of a Purchasing Document. You need one row for each document you create.
PO_LINES_ALL
This table stores the line information of a Purchasing Document
PO_LINE_LOCATIONS_ALL
This table contains the information related to purchase order shipment schedules and blanket agreement price breaks. You need one row for each schedule or price break you attach to a document line.
PO_DISTRIBUTIONS_ALL
This table contains the information related to accounting distribution of a purchase order shipment line. You need one row for each distribution line you attach to a purchase order shipment
VENDORS_ALL
This table stores the general information about the suppliers
PO_VENDOR_SITES_ALL
This table stores information about the supplier sites. Each row includes the site address, supplier reference, purchasing, payment, bank, and general information.
PO_RELEASES_ALL
This table stores information related to planned and blanket Purchase Order releases. Each row includes the buyer, date, release status, and release number. Each release must have at least one purchase order shipment.
PO_VENDOR_CONTACTS
This table stores information about contacts related to Supplier site. Each row includes contact name and site.
PO_ACTION_HISTORY
This table stores information about the approval and control history of a Purchasing Document. This table stores one record for each approval or control action an employee takes on a purchase order, purchase agreement, release or requisition.
14.   What is 2-way, 3-way, 4-way matching?
Oracle Payables shares purchase order information from your purchasing system to enable online matching with invoices. Invoiced or billed items are matched to the original purchase orders to ensure that you pay only for the goods or services you ordered and/or received.
Two–Way: Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid.
Three–Way: Purchase order, receipt, and invoice quantities must match within tolerance before the corresponding invoice can be paid.
Four–Way: Purchase order, receipt, accepted, and invoice quantities must match within tolerance before the corresponding invoice can be paid.
15.   Explain the P2P process flow
Procure to pay (p2p) is a process of requesting, purchasing, receiving, paying for and accounting for goods and services.  Procure to Pay Lifecycle is one of the important business Process in Oracle Applications. It’s the flow that gets the goods required to do business.  It involves the transactional flow of data that is sent to a supplier as well as the data that surrounds the fulfillment of the actual order and payment for the product or service.
Create a requisition>> create RFQ>> create a quotation from quote analysis>> generate a PO>>receipt of material>> create Invoice in payables>> transfer to GL
16.   What is an approval hierarchy?
Approval hierarchies let you automatically route documents for approval. There are two kinds of approval hierarchies in Purchasing: position hierarchy and employee/supervisor relationships.
17.   What are the documents that use PO_HEADERS_ALL?
The following are the documents that use PO_HEADERS_ALL
RFQ’s, Quotations, Standard Purchase Order, Planned Purchase Order, Blanket Purchase Order and Contracts
18.   Can the original Purchase Order be viewed in any way without resorting to SQL, for a revised Purchase Order?
The original version of a revised PO cannot be viewed from the PO form or PO summary form. Information on the original PO can be obtained from the PO_HEADERS_ARCHIVE and PO_LINES_ARCHIVE tables using the PO_HEADER_ID column as a common reference using SQL only.
19.   Can we automatically ‘Close’ the Purchase order without receiving the full quantity?
The Receipt Close Tolerance lets you specify a quantity percentage within which Purchasing closes a partially received shipment. For example, if your Receipt Close Tolerance is 5% and you receive 96% of an expected shipment, Purchasing automatically closes this shipment for receiving.
20.   When does a Purchase Order line get the Status ‘Closed for Receiving’?
Goods have been received on the system against this line but an invoice has not been
matched to the order.
21.   Can we match an Invoice against a line even when it is ‘Closed for Invoicing’?
The Close for invoicing status does not prevent you from matching an invoice to a purchase order or to a receipt.
22.   What does create internal order conc request do?
Create internal order request will transfer the IR info to OM interface tables.
23.   Explain the Receipt Routing
Receipt Routing is of three types: Direct, Standard and Inspection
In Direct once the goods arrive at the destination, we directly move them to a specific Sub-Inv
In Standard once the goods are at the destination, we receive it at the receiving point first and then move them to the Sub-Inv.
In Inspection once the goods are at the destination, we receive it at the receiving point and then we perform inspection and accordingly we either accept it or reject them.
24.  What are the different Purchasing modes in Receiving? 
There are three modes:
Online: Receipts are processed online. If there are any errors, they are shown on the FORM itself, and don’t let you IGNORE and PROCEED.
Immediate: Receipts are processed immediately, but no errors are shown. Errors are recorded in REC_TRANSACTION_INTERFACE table.
Batch: Receipts are processed in batch, but no errors are shown. Errors are recorded in REC_TRANSACTION_INTERFACE table.
Note: In all the above two cases, it requires Receiving Transaction Processor to be run periodically.
25.  Which tables are updated When you save a Received Data in a form?
RCV_SHIPMENT_HEADERS:                               It contains supplier shipment header data like Shipment date, supplier Name
RCV_TRANSACTIONS_INTERFACE:                 It contains received data like Item name, quantity, and receiving location
RCV_SHIPMENT_LINES
MTL_MATERIAL_TRANSACTIONS_TEMP
PO_LINE_LOCATIONS_ALL
PO_DISTRIBUTIONS_ALL
26.  What are the major transactions in RECEIVING? 
Purchase Order Receipts
Internal Requisition Receipts
Inventory Inter-Org Transfer Receipts
Customer Return Receipts
27.   What is Pay on Receipt AutoInvoice Program?
By running this program, we can automatically create an invoice for a PO when we enter a receipt for the respective PO.
28.  What is Invoice Validation Process?
Before you can pay or create accounting entries for any invoice, the Invoice Validation process must validate the invoice.
Invoice Validation checks the matching, tax, period status, exchange rate, and distribution information for invoices you enter and automatically applies holds to exception invoices. If an invoice has a hold, you can release the hold by correcting the exception that caused Invoice Validation to apply the hold by updating the invoice or the purchase order, or changing the invoice tolerances.
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Awesome and very useful information, many thanks for sharing
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