Order EBS Order Management Essentials – Question Bank
Oracle E-Business Suite R12.1 Order Management Essentials – Sample Questions
These questions are similar to the ones asked in the actual Test.
How should I know? I know, because although I got my Order Management Certification five years back, I have re-certified with the latest version of the Certification test.
Before you start here are some Key features of the Order Management Certification Exam
– The exam is Computer based and you have 150 minutes to answer 80 Questions.
– The Questions are (mostly) multiple choice type and there is NO penalty for an incorrect answer.
– Some of the Questions may have more than one correct answers. You must get ALL the options correct for you to be awarded points.
– The Official Pass percentage is 60% (But this can vary). You will be told the exact passing percentage before your begin your test.
Here are a few sample questions for you;
Sample Questions
1.) When do you use a Blanket Sales Agreement with a Supplier in Purchasing?
a. You do not know which products to buy
b. You know which products to buy but not the quantities
c. You know which products to buy and the quantities but not the receiving location
d. You know which products to buy and quantities but not the delivery schedule
Answer: d
Explanation:
Blanket purchase agreements and releases allow you to negotiate stable, long-term
contracts while maintaining flexible delivery schedules and order quantity commitments.
You create blanket purchase agreements when you know the details of the goods or
services you plan to buy from a specific supplier, but you do not yet know delivery schedule details. You can use blanket purchase agreements to specify negotiated prices for your items before actually purchasing them.
A blanket purchase agreement is a type of purchase order you issue before you request
actual delivery of goods or services. You normally create a blanket purchase agreement to
document a long-term supplier agreement.
A blanket release is an actual order of goods or services you issue against a blanket purchase agreement. The blanket purchase agreement determines the characteristics and the prices of the items. The release can be created manually or automatically.
Blanket Releases
Once you have an approved blanket agreement you need only create a release to authorize
delivery of goods or services. You can create blanket purchase agreement releases using the
following methods:
• The Releases window
• PO Create Documents workflow
• AutoCreate window
• The Create Releases process
Manually Created Releases
You can manually enter releases against active blanket purchase agreements. You can set up purchasing to warn you if a blanket purchase agreement exists for items that you try to
requisition. Because the blanket purchase agreement is in place, you can create a blanket
release instead of submitting a requisition. If you choose not to enable to warn if a blanket
purchase agreement exists, can submit requisitions and the buyer can create the blanket
release.
Automatically Created Releases
Buyers can expedite creation of releases using the AutoCreate window or by submitting the
Create Releases program. In addition, the PO Create Documents workflow can be set up to
automatically create blanket purchase agreement releases for requisitions that are
submitted, regardless of whether their origin is the Requisitions window or Oracle
iProcurement.
2.) Which of the following are the correct components you define in Human resources for Oracle Purchasing?
a. Employees, Locations, Currency, Hierarchies
b. Employees, Calendar, Organizations, Hierarchies
c. Employees, Locations, Organizations, Hierarchies
d. Employees, Calendar, Currency, Hierarchies
Answer: c
Explanation:
Purchasing Integrations with other Applications
Oracle General Ledger
• Ledgers
• Exchange rates
• Accounting flexfield
• Currency
• Charge Account Combinations
Oracle Human Resources
• Employees (Requestors and Buyers)
• Locations (Receiving)
• Organizations (Receiving)
• Hierarchies (Approval)
Oracle Inventory
• Items
• Demand
• Receipts
Oracle Payables
• Accounting for matched purchase orders
• Suppliers
• Procurement cards
• Purchase orders
Oracle Order Management (Optional)
• Required for internal requisitions
3.) What are the correct RFQ Classes?
a. Catalog RFQ and Standard RFQ
b. Standard RFQ and Bid RFQ
c. Catalog RFQ and Bid RFQ
d. Catalog RFQ, Standard RFQ and Bid RFQ
Answer: c
Explanation:
A request for quotation (RFQ) is a document you use to solicit supplier quotations for goods or services. You usually send a request for a quote to many suppliers to ensure that you get the best price and terms possible.
Supplier Lists
Although you may send an RFQ to only one supplier, usually you send a request for
quotation to many suppliers to ensure that you get the best price and terms possible. With
Oracle Purchasing, you create supplier lists so that you can predefine groups of suppliers to whom you want to send RFQs. You can establish supplier lists according to criteria you
define, such as an item, manufacturing category, geographic location, or more. You can
combine supplier lists to produce many copies of your RFQ automatically.
Manually Creating a Request for Quotation
You can send the RFQ to as many suppliers as you want and decide how much item
information to provide to the suppliers. Each RFQ consists of header, line, and shipment
information. In the header, you define the RFQ document type, the ship-to and bill-to
locations, and the effective dates for the quotation. The Line region is where you define the
goods or services for which you want the supplier to quote. Included in this information are your requirements, such as unit of measure and, optionally, a target price for negotiation purposes. You may also include minimum and maximum order quantities and classification for hazardous materials. You specify the terms and conditions for the RFQ. You can request as many shipment quotations as you want.
AutoCreating Requests for Quotation
Purchasing provides automatic creation capabilities for documents. The AutoCreate
Document window has features that simplify the creation of requests for quotation. All
purchase requisition lines available for AutoCreation go into a single requisition pool. Buyers can retrieve only approved requisition lines from the requisition pool and use the
AutoCreate Documents window to create requests for quotation (RFQs). If you have Oracle Sourcing implemented you can also create a Sourcing RFQ. You can choose from Automatic or Manual creation mode to place the requisition line onto a document. You also choose whether you want to create a new RFQ or add the requisition line to an existing RFQ. There are two classes of RFQs: Catal
There are two classes of RFQs: Catalog and Bid. The Catalog class supports price breaks and the Bid class supports shipments. Catalog RFQs and Standard RFQs both have a class of Catalog and can have price breaks entered for either of them. Bid RFQs have a class of Bid and can have shipments entered. A consideration for selecting your type of RFQ is what your ultimate ordering document will
be.
• The Catalog and Standard RFQs support price breaks and can become Blanket
Purchase Agreement through the Quote process.
• The Bid RFQ supports a shipment schedule and can become a Standard or Planned
purchase order through the Quote process.
4.) Which of the Following statements is the INCORRECT statement regarding Document Security, Approvals and Routing?
a. You can create approval hierarchies for Purchase Orders, Purchase
Requisitions, RFQs, Quotations, Purchase Agreements and Releases b. You can enter new document subtypes for Purchase Agreements, RFQs and
Quotations
c. Oracle Purchasing lets you control which groups of employees have access to
each document type and which actions these individuals can take once they
gain access.
d. You cannot enter new document types
Answer: b
Explanation:
Document security, approval and routing is controlled by document type and powered by
Workflow. Document types include the following:
- Requisitions – Purchase and Internal
An internal request for goods or services. These can be filled by a supplier (Purchase)
or internal stores (Internal). - Requests for Quotations – Bid, Catalog and Standard
A document you use to solicit supplier quotations for goods or services you need.
- Quotations – Bid, Catalog and Standard
A statement of the price, terms, and conditions of sale a supplier offers you for
goods or services. - Purchase Orders – Standard and Planned
A contractual document you issue to a supplier when you request delivery of goods
or services for specific dates and locations. - Purchase Agreements – Blanket and Contract
A type of purchase order you issue before you request actual delivery of goods or
services. - Releases – Blanket and Planned
An actual order of goods and services you issue against a blanket purchase
agreement.
You cannot enter new document types; you can enter new document subtypes only for RFQs and quotations. Not all fields on the document types window apply to each document type.
Oracle Purchasing lets you control which groups of employees have access to each document type and which actions these individuals can take once they gain access. This is accomplished by setting the security and access levels for the various document types. For each job or position, you will be able to establish approval authorization rules that define whether the person holding the job or position can approve the document. Documents can also be routed using the employee/supervisor relationship or using position approval
hierarchies.
5.) By default, a Supplier in an Approved Supplier List with the status ‘New’ will PREVENT you from performing
a. PO Approval
b. Sourcing
c. Schedule Confirmation
d. Manufacturer Link
Answer: c
Explanation:
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, and
item relationships is known as an Approved Supplier List (ASL). This repository includes
information about all ASL suppliers with their business statuses:
- Approved – The supplier has demonstrated the ability to satisfy rigorous quality,
cost, and delivery requirements over a sustained period. - Debarred – The supplier is temporarily or permanently disallowed on purchase
orders due to performance failure, ethics violations, and so on. - New – This status may be used based on your company policy to indicate that the
supplier has never placed a purchase order with the procurement organization or
that your company considers this a relatively new supplier.
Navigation:
Purchasing Responsibility
Supply Base > Supplier Status
Each item/supplier combination must be assigned a status. These statuses are defined by
your organization based on your business needs. When you define a status, you define a set of business rules that control whether an action is allowed or prevented. For each status and action combination, indicate whether the action is allowed or prevented.
The four predefined actions for business rules you can associate with each status are:
- PO Approval – Approval of a purchase order to a supplier
- Sourcing – When sourcing planned orders, Planning should assign suppliers with
this business rule set to Allowed - Schedule Confirmation – Confirmation of a schedule for a supplier
- Manufacturer Link – Associates a manufacturer with a distributor in the ASL
The four actions come seeded with Oracle Applications and you cannot add new ones.Once you define a set of statuses, you can then associate a status with a supplier-commodity/item combination in the ASL.
6.) What will be the highest priority for the receiving tolerances of your PO receipts?
a. Organization Level
b. Supplier Level
c. Item Level
d. Purchase Order Level
Answer: d
Explanation:
Oracle Purchasing lets you control the items you order through receiving, inspection,
transfer and internal delivery. These features allow you to indicate the quantity, quality and internal delivery of the items you receive.
With Oracle Purchasing/iProcurement you can:
- Use routing controls at the organization, supplier, item, or order level to enforce
material movement through receiving. For example, you can require inspection for
some items and dock-to-stock receipt for others. - Define receiving tolerances at the organization, supplier, item, and order level,
with the lowest level overriding previous levels. You can define tolerances for receipt
quantity, on time delivery, and receiving location. You can assign looser tolerances to
low-value items that you consume at high volumes. You can set enforcement options
to ignore, warn the user, or reject transactions that violate the tolerances - Specify match approval levels. You can specify two-, three-, and four-way match
approval levels on a purchase order line. Purchasing uses your receiving and
inspection information to ensure that you only accept and pay for the items you
order, receive, or inspect. Choose the three-way match approval level if you want to
receive items before you allow payment. Choose the four-way match approval level
if you require inspection and acceptance of receipts before authorizing payment. - Use Advance Shipment Notices (ASNs) to enter receipts in the Enter Receipts
window, reducing data entry time. - Print the receiving and inspection documentation you need. For example, you can
prepare for incoming receipts by printing the Expected Receipts Report to help you
identify items and quantities you expect to receive. You can use this report to plan
your work, identify receipts satisfying an urgent demand, and control unexpected
receipts. Finally, you can produce summary and detail receiving transaction reports
by item, supplier, purchase order number, and/or receiving date range. - Track, update, and record the receipt of intransit and inter-organization shipments.
- Record receipt of unordered items based on your item, supplier, or organization
defaults.
For example, if your organization does not allow receipt of unordered items, you
should not be able to enter a receipt unless it is matched to an order shipment. - Automatically update related supply information, inventory balances, WIP
operations, requisition details, and purchase order details while entering a single
receiving transaction. - Receive services, inventory, expense, and outside processing items using one
screen. You acknowledge receipt of services by receiving amounts of the service,
generally related to receipt of an invoice. You receive inventory items to expense or
asset subinventories, you receive expense items to the requestor, and you receive
outside processing to the shop floor (designated operations in your manufacturing
process). - Distinguish closed for invoicing from closed for receiving. Purchasing automatically
closes your purchase order for receipt when it is fully received. You can manually
close partially received purchase orders if you no longer expect any more receipts
against them.
Close for invoicing and close for receiving are managed using tolerances. You can
specify that when you have received a certain percentage of a shipment, Purchasing
will close the receipt. This is a soft close, and you can reopen the receipt. Oracle
Purchasing rolls up closing to the line and header level, and Closed information does
not show in the Open Purchase Orders report. Also, if there is a remaining balance,
closed quantities are no longer visible as supply scheduled receipts to MRP/ATP. - Decide how you accrue un-invoiced receipts. For instance, you can accrue receipts
perpetually or at period-end for expense items. Oracle Purchasing uses perpetual
accrual for your inventory and shop floor item receipts. Oracle Purchasing and
Inventory together provide you with perpetual visibility and control on your accrued
liabilities for inventory items. Inventory lets you maintain the value of your
inventories on a perpetual basis.
Oracle Purchasing automatically records your accrued liability in your general ledger
as you enter receiving transactions. Oracle Purchasing also provides you with
complete visibility and control of your inventories values, accrued liabilities for
inventory and non-inventory items, purchase price variances, and invoice price
variances. Purchasing also provides you with the information you need to facilitate
your period close and your inventory, purchasing, and payables reconciliation
process. - Track the quantity and destination of internally delivered items you know exactly
what items you receive and where to deliver them within your organization. - Define which of your items require inspection. Oracle Purchasing lets you inspect
received items before you move the items into stock or deliver them to the
requestor. You can accept or reject items and provide detailed information about
your inspection results.
Purchasing lets you review your inspection results on-line. You can review your
inspection results by receipt number, purchase order number, supplier, item, and/or transaction date range. Oracle Purchasing also provides summary and detail reports
to help you analyze your suppliers’ performance. You can produce supplier quality
reports by buyer, supplier, and item. You can use the receiving inspection register to
review your inspections by receipt. - Correct receiving transaction errors. Purchasing automatically updates the
inventory balances if you correct the quantities of items that have already been
moved into inventory.
7.) Which of the following statements is the INCORRECT one regarding suppliers.
a. Purchase orders need supplier information.
b. Supplier is required when creating a Purchase Requisition
c. You receive goods or services from a supplier.
d. You must pay the supplier for the goods or services purchased.
Answer: b
Explanation:
Supplier information is a vital component of Oracle Purchasing. You must define a supplier before performing most activities within Oracle Purchasing. The following examples list the areas in which you use suppliers.
- A recommended supplier is optionally entered on a requisition.
- A supplier is needed to send a request for quote.
- That same supplier is used when entering a quotation.
- Purchase orders need supplier information.
- You receive goods or services from a supplier.
- You return goods to a supplier.
- You must pay the supplier for the goods or services purchased.
8.) What is NOT a benefit of using Autocreate in Purchasing?
a. Helps maintain a safety stock level
b. Ensures Ordering from negotiated sources
c. Simplifies consolidation of similar requests
d. Streamlines the procurement process
Answer: b
Explanation:
AutoCreate
The AutoCreate window can be used to search for approved requisitions in the requisition
line pool. Those requisitions can be used as a basis for creating RFQs, standard purchase
orders, blanket purchase agreement releases and planned purchase orders. Buyer
intervention is required to search the requisition pool and create the purchase documents.
Use the Create Releases Program
The Create Releases program is a concurrent request that may be scheduled to run periodically. The Create Releases program can be used to generate blanket purchase agreement releases. Buyer intervention can be eliminated for certain types of purchases by using the Create Releases program.
Workflow
The PO Requisition Approval workflow automatically runs the PO Create Documents
workflow. Depending upon your implementation decisions, the PO Create Documents
workflow will end with unapproved or approved standard purchase orders or blanket
purchase agreement releases. Using the PO Create Documents workflow can make it
possible to eliminate buyer intervention for certain types of purchases.
The Oracle Purchasing AutoCreate window can be used to search for requisition lines for
specific items or similar items. After finding requisition lines, you can make decisions about how to consolidate similar requests and ensure the resulting purchase documents are sent to the appropriate suppliers.
9.) Following Are the Steps to close the Purchasing Accounting Periods.
I.) Process remaining inventory transactions
II.) Close the purchasing period
III.) Post all receipts
IV.) Write off accrued transactions as necessary
V.) Process period-end receipt accruals
VI.) Create manual journal entry for write-offs
VII.) Run Accrual Rebuild Reconciliation Report
VIII.) Review Uninvoiced Receipts report
Which is the correct sequence to follow these steps?
a.) IV, VIII, VII, I, II, V, III, VI
b.) III, VIII, V, II, I, VII, IV, VI
c.) VIII, V, I, II, III, IV, VI, VII
d.) I, VIII, IV, VI, III, VII, V, II
Answer: b
Explanation:
- At the end of each accounting period, companies must complete the closing process
in Payables and reconcile Payables activity for the period. - You close a Payables period after you have completed accounting for transactions
for the period and you have transferred the accounting entries to general ledger.
A week before your first period close, create a copy of the production database and then do
a dry run following your period close procedures. The dry run will help you identify
problems and issues well in advance of the actual period close.
Review the Uninvoiced Receipts report
The Uninvoiced Receipts Report should be run before the Receipt Accrual – Period-End
process. With this report, you can review all or specific uninvoiced receipts for both period
end and online accruals. Uninvoiced receipts are goods and services you have received that your supplier did not invoice yet. This report indicates exactly what you have to accrue and for what amount, and helps you analyze your receipt accrual entries. The accrual amount is the difference between the quantity received and the quantity billed multiplied by the unit price of the item.
Process period-end receipt accruals
Use the Receipt Accruals – Period-End process to create period-end accruals for your
uninvoiced receipts for Expense distributions. Purchasing creates an accrual journal entry in your general ledger for each uninvoiced receipt you choose using this window. Each time you create accrual entries for a specific uninvoiced receipt, Purchasing marks this receipt as accrued and ignores it the next time you run the Receipt Accrual – Period-End process. Purchasing creates accrual entries only up to the quantity the supplier did not invoice for partially invoiced receipts.
Once the Receipt Accruals – Period-End process completes, use Journal Import with a source of Purchasing to import the journal into General Ledger. The journal is assigned a reversal period based on the category setup. This journal must be reversed in the subsequent period and posted. If the journal is not reversed and posted, your uninvoiced receipt liability will be overstated.
Close the purchasing period
Use the Control Purchasing Periods window to control the purchasing periods defined in the Accounting Calendar window. Purchasing lets you create journal entries only for transactions you enter in an open purchasing period. Use the Control Purchasing Periods window to change the status of the period to Closed. Once the Purchasing period is closed, the corresponding Payables period cannot be re-opened unless the purchasing period is re-opened. Each period in the purchasing calendar will have one of the following statuses:
- Closed – When you close a purchasing period, Purchasing does not allow further
accruals during the period. Purchasing reverses the status of accrued purchase order
lines that are set to accrue at period end so that you can accrue them in the next
period if you need to. - Future – Use this option if you want to open the purchasing period in the future.
This option is available only when the current status is Never Opened. - Never Opened – Purchasing displays this default status if you have not opened the
period in the past. - Open – Use this option to open the purchasing period.
- Permanently Closed – Use this option if you do not want to re-open the period in
the future. This option is irreversible.
Process remaining inventory transactions
Process any remaining inventory transactions and close the inventory accounting period.
Run Accrual Rebuild Reconciliation Report
The Accrual Reconciliation Report can be used to analyze the balance of the perpetual
receipt accrual accounts (Inventory AP Accrual account). You only need to use this report if you are accruing on receipt. For each Inventory AP Accrual account you can choose to order by item or supplier and see detailed information including the purchase order number, receipt, and transaction quantity and transaction amount. You can review this report to identify the following problems in receiving, purchasing, inventory, work in process, or accounts payable transactions:
- Mismatches in receipt and invoice quantities
- Discrepancies in supplier billing
- Invoices matched to the wrong purchase order
- Receipts matched to the wrong purchase order
- Miscellaneous transactions from Inventory or Work in Process that use the A/P
accrual accounts in error - Sales tax and freight charged to the A/P accrual accounts by mistake
For inquiries during the accounting period, use the Accrual Reconciliation report.
Write off accrued transactions as necessary
After you have researched the reported accrual balances, you can use the Accrual Write-Offs window to indicate which entries you wish to remove and write off from this report.
Create a manual journal entry for write-offs
You can use the Accrual Write-Off Report as supporting detail for your manual journal entry. Keep in mind that the best way to make corrections to fix discrepancies you identify is to reverse invoice distributions and re-match to the correct purchase order.
10.) What is the INCORRECT statement regarding using Mass Update on Purchasing Documents?
a. Documents with the Approved Status will change in to Requires Re-Approval status after running the ‘Mass Update on Purchasing Documents’ program
b. Document revision and archival will not take place
c. Mass updates can be done for documents with the following statuses: Approved, Requires Approval, Pre-Approved, Incomplete, Rejected, and in-Process
d. You can run the Mass Update of Purchasing Documents program from within
Purchasing.
Answer: a
Explanation:
The Mass Update program is designed to streamline the process of maintaining
organizational changes. You can update the person name (buyer, approver, deliver-to) in an existing purchasing documents. The Mass Update of Purchasing Documents program
updates person information on Oracle Purchasing documents from a previous (old) person
to a new person.
The following Purchasing documents will be updated:
- Standard Purchase Order
- Blanket Purchase Agreements
- Blanket Releases
- Planned Purchase Orders
- Planned Releases
- Contract Agreements
You can run the Mass Update of Purchasing Documents program from within Purchasing.
Documents will remain in the same status after the person name update. Document
revision and archival will not take place. Mass updates can be done for documents with the
following statuses: Approved, Requires Approval, Pre-Approved, Incomplete, Rejected, and In-Process.
More Questions? Have a look at: