How to Calculate Freight Charges in Order Management

Solution and Content contributed by Bill Foster.

This is a workaround solution for one of the most asked question by Clients implementing Order Management “How to Calculate Freight Charges?” Thanks to Bill for sharing this wonderful solution. Oracle doesn’t have solution for this even in R12.

Problem:  Add Freight Charges to a Sales Order in Order Management and have Oracle/Vertex tell how much (if any) Taxes should be charged on the Freight Charges.


  • Use an Item called ‘FREIGHT’ which is basically treated as any other Item where you can establish the tax code on the line and charge tax on freight appropriately. Setup the Item in Inventory and have to pick and ship it for each order.
  • Use a “Promotional Modifier” which is qualified by many different pricing attributes (including Freight Terms, Shipping Method, Order Category, etc.).  So the idea is – “Buy any item and get Freight at ‘X’ price”.  This solution works for the credit card orders, cash / check orders and advance pay.  Net payment term orders typically use actual freight cost. You may also have to setup a new defaulting rule to handle defaulting the line type based on the item being FREIGHT.  This was to ensure the correct COGS account was used to account for the freight.
  • Profile Options to Consider:
    • OM: Charges for Included Item: When this profile option is set to ‘Y’, and the calculate price flag of the order line with an included item is either Calculate Price (Y) or Partial Price (P), then the eligible freight charges are applied to the order line. For backordered lines within Included Items, both the profile options OM: Charges for backorders and OM: Charges for Included Item need to be set to Y to view and apply any freight charges.
    • OM: Charges for backorders: If the profile option is set to ‘Y’, the system will set the calculate price flag to ‘P’ and freight charges are calculated for backorder lines. If the profile option is set to ‘N’, the system will set the calculated price flag to ‘N’ and freight charges are not calculated for backorder lines.
    • QP: Selling Price Rounding Options: Determines if your freight charges are rounded. See: Oracle Advance Pricing Implementation Guide, Profile Options.
    • OM: Interface Freight Tax Code From Line: The default value set at site level is ‘No’, so that existing customers are not impacted due to the change. Tax_code is now interfaced to AR for freight lines that are interfaced as revenue lines when the profile is set to ‘Yes’. Tax code is populated in the same way as the sales order line along with which this freight line is interfaced.
    • Tax: Inventory Item for Freight: This profile option is used only when the freight item is passed as revenue line. If you set the value of this profile option to Inventory Item then the Invoicing module passes this item for freight charges, which will be treated as revenue lines. This profile option can only be set at the Application or Site level.
    • Tax: Invoice Freight as Revenue:  If the Receivables profile option TAX: Allow Tax Code Override is set to ‘YES’, and profile option TAX: Invoice Freight as Revenue is set to ‘YES’, then freight charges are treated as revenue lines, and the Invoicing module will pass VAT tax and associated sales credits for processing.
    • OM: Credit Salesperson for Freight on Sales: This profile option specifies whether to credit the Salesperson on the invoicing line or order header for freight charges when the freight charges are treated as revenue.
    • Debugging Freight and Special ChargesClick Here
    • Metalink Notes to Consider:
      • 391160.1
      • 394055.1
      • 362820.1
      • 428243.1
      • 392938.1
      • 227719.1
      • 258981.1

Hope this helps anyone interested.  Surely this is not the only solution, but this can be achieved with no customizations and use seeded functionality only.


Oracle Inventory Terminology

Terms used in the conventional Inventory system and as referred in Oracle Inventory may be different. A brief explanation of the ‘Oracle Inventory’ term’s vis-à-vis the existing terminology is provided the following paragraphs. These terms are extensively used in documenting the ‘Inventory – To Be’ flows and it is recommended that the various users of this system get acquainted with the same.Item Validation Organization: The organization that contains your master list of items. You define it by setting the OE: Item Validation Organization profile option.

Logical organization: A business unit that tracks items for accounting purposes but does not physically exist.

Organization: A business unit such as a plant, warehouse, division, department, and so on. Order Management refers to organizations as warehouses on all Order Management windows and reports.

Destination organization: An inventory organization that receives item shipments from a given Organization.

Workday calendar: A calendar that identifies available workdays for one or more organizations. Master Scheduling/MRP, Inventory, Work in Process, and Capacity plan and schedule activities based on a calendar’s available workdays.

Workday exception set: An entity that defines mutually exclusive sets of workday exceptions. For each organization, you can specify a workday calendar and exception set.

Primary unit of measure: The stocking unit of measure for an item in a particular organization.

Unit of measure: The unit that the quantity of an item is expressed.

Unit of measure class: A group of units of measure and their corresponding base unit of measure. The standard unit classes are Length, Weight, Volume, Area, Time, and Pack.

Unit of measure conversions: Numerical factors that enable you to perform transactions in units other than the primary unit of the item being transacted.

Category: Code used to group items with similar characteristics, such as plastics, metals, or glass items.

Category set:  A feature in Inventory where users may define their own group of categories. Typical category sets include purchasing, materials, costing, and planning.

Purchased item: Purchased item is an item that you buy and receive. If an item is also an inventory item, you may also be able to stock it.

Standard item: Any item that can have a bill or be a component on a bill except planning items, option classes, or models. Standard items include purchased items, subassemblies, and finished products.

Substitute item: An item that can be used in place of a component. Master Scheduling/MRP suggests substitutes items on some reports.

Inventory item: Items you stock in inventory. You control inventory for inventory items by quantity and value. Typically, the inventory item remains an asset until you consume it. You recognize the cost of an inventory item as an expense when you consume it or sell it. You generally value the inventory for an item by multiplying the item standard cost by the quantity on hand.

Item attribute control level: To maintain item attributes at the item master attribute level or the Organization specific level by defining item attribute control consistent with your company policies. For example, if your company determines serial number control at headquarters regardless of where items are used, you define and maintain serial number attribute control at the item master level. If each organization maintains serial number control locally, they maintain those attributes at the organization specific level.

Item attributes: Specific characteristics of an item, such as order cost, item status, revision control, COGS account, etc.

Item master level attribute: An item attribute you control at the item master level as opposed to controlling at the organization level.

Item status: Code used to control the transaction activity of an item.

Deletion constraint: A business rule that restricts the entities you can delete. A deletion constraint is a test that must succeed before an item, bill, or routing can be deleted.

Current on–hand quantity: Total quantity of the item on–hand before a transaction is processed.

On–hand quantity: The physical quantity of an item existing in inventory.

Subinventory: Subdivision of an organization, representing either a physical area or a logical grouping of items, such as a storeroom or receiving dock.

Locator: Physical area within a Subinventory where you store material, such as a row, aisle, bin, or shelf.

Locator control: An Oracle manufacturing technique for enforcing use of locators during a material transaction.

Revision: A particular version of an item, bill of material, or routing.

Revision control: An inventory control option that tracks inventory by item revision and forces you to specify a revision for each material transaction.

Lot: A specific batch of an item identified by a number.

Lot control: An Oracle Manufacturing technique for enforcing use of lot numbers during material transactions thus enabling the tracking of batches of items throughout their movement in and out of inventory.

Serial number: A number assigned to each unit of an item and used to track the item.

Serial numbers control: A manufacturing technique for enforcing use of serial numbers during a material transaction.

Min–max planning: An inventory planning method used to determine when and how much to order based on a fixed user–entered minimum and maximum inventory levels.

Reorder point planning: An inventory planning method used to determine when and how much to order based on customer service level, safety stock, carrying cost, order setup cost, lead time and average demand.

Safety stock: Quantity of stock planned to have in inventory to protect against fluctuations in demand and/or supply.

ABC classification: A method of classifying items in decreasing order of importance, such as annual dollar volume or your company’s transaction history.

Cycle counting: An inventory accuracy analysis technique where inventory is counted on a cyclic schedule rather than once a year.

Physicals inventory: A periodic reconciliation of item counts with system on–hand quantities.

Account alias: An easily recognized name or label representing an account charged on miscellaneous transactions. You may view, report, and reserve against an account alias.

Inter–organization transfer: Transfer of items from one inventory organization to another You can have freight charges and transfer credits associated with inter–organization transfer. You can choose to ship items directly or have them go through intransit inventory.

Material transaction: Transfer between, issue from, receipt to, or adjustment to an inventory organization, subinventory, or locator. Receipt of completed assemblies into inventory from a job or repetitive schedule. Issue of component items from inventory to work in process.

Transaction cost: The cost per unit at which the transaction quantity is valued.

Transaction interface: An open interface table through which you can import transactions.

Transaction manager: A concurrent program that controls your manufacturing transactions.

Receipt: A shipment from one supplier that can include many items ordered on many purchase orders.

Return to supplier: A transaction that allows you to return to the supplier items from a fully or partially received purchase order and receive credit for them.

Supplier: Provider of goods or services.

Accounting period: The fiscal period a company uses to report financial results, such as a calendar month or fiscal period.

Average costing: A costing method which can be used to cost transactions in both inventory only and manufacturing (inventory and work in process) environments. As you perform transactions, the system uses the transaction price or cost and automatically recalculates the average unit cost of your items.

Standard costing: A costing method where a predetermined standard cost is used for charging material, resource, overhead, period close, job close, and cost update transactions and valuing inventory. Any deviation in actual costs from the predetermined standard is recorded as a variance.

My initial experience upgrading database from Oracle 11g to Oracle 12c (Part -1)

Just wanted to share some experience upgrading database from Oracle 11g  to Oracle 12c; One thing I want to avoid is just go over best practices  instead I want to go over some of the stuff that we encountered.. May  be because of  bug ; some of them may be because of undocumented changes to Oracle 12c ;Some of them may be because of lack of in-dept research.

First thing that was noticed after upgrade was some of our home grown scripts failed. Further investigation revealed that Oracle 12c does not support  sqlplus -sl option ;Instead it has to be sqlplus -s -l. As per Oracle Support, Oracle 12c behavior is correct one and the Oracle 10g/11g behavior was a bug that was fixed in Oracle 12c.

Second issue is  one of our internal  application failed with following error:  “Caused by: java.sql.SQLException: ORA-28040: No matching authentication protocol”. There are multiple ways to fix/workaround this issue.  One of fix/workaround  is to set SQLNET.ALLOWED_LOGON_VERSION_SERVER in sqlnet.ora file to lower Oracle version like 8 or 9 10 . This parameter actually specifies the authentication protocol  that a client is allowed to use not the actual version of that client.  Therefore even though the parameter value implies Oracle version , the internal check is really against the authentication protocol.

Now now some background about the authentication protocol behavior. In earlier Oracle versions there was a 1-1 relation between authentication protocol and Oracle client version. This behavior changed in Oracle 10g , starting with Oracle 10g, this is no longer a 1-1 relation between authentication protocol and Oracle client version.  So what is the problem?  the problem lies in the fact that both Oracle 10g and 11g use SHA-1 protocol where as Oracle 12c uses SHA-2 protocol.  While SHA-2 protocol by itself is not causing the error, It is the default setting for SQLNET.ALLOWED_LOGON_VERSION_SERVER that is causing the error. In earlier versions , the default was 8 whereas it is 11 in Oracle 12c; therefore all  client versions 10 and below may get ORA-28040 error.

Please note that  SQLNET.ALLOWED_LOGON_VERSION parameter is deprecated in Oracle Database 12c and replaced with SQLNET.ALLOWED_LOGON_VERSION_SERVER  and SQLNET.ALLOWED_LOGON_VERSION_CLIENT.

Other ways to fix the above issue is to upgrade your client like JDBC drivers to  12c to match authentication protocols.

BrightStar helps organization upgrade from 11g to 12c to make the organization future ready. Contact us at today


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Enterprise Cloud Services to Reach $31.9 Billion in 2017

The global enterprise cloud-based services market will reach $31.9 billion in 2017 against $18.3 billion in 2012, according to research group Analysys Mason. This forecast report presents an enterprise cloud services forecast for both IaaS and SaaS and both revenue and ARPU forecasts for large enterprises and SMEs.

According to the research group, the annual growth of the segment is expected to reach 17% in 2013 but it may diminish in subsequent years. While the enterprise public cloud services market continues to grow, it is at a slower overall rate than in our previous forecast, particularly in developed countries.

The average growth of economically developed countries is expected at 11% until 2017. The markets in these regions – representing more than 90% of total volume – represent $28.7 billion against $17 billion in 2012. Emerging markets are expected to grow stronger (over 20%) but because of their importance in terms of volume, they will not exceed 10% in 2017.

This slowing of growth is the result of difficult economic conditions worldwide and slower-than-anticipated adoption of new IT technology by both large and small enterprises.

Software-as-a-service (SaaS) will account for 66% of revenue in 2010, while 33% is related to infrastructure-as-a-service (IaaS). This revenue split will change over the next five years and the group expects that share of revenue from IaaS will increase to 43% by 2017. Gartner research recently predicted that 77% of companies plan to increase their spending on SaaS in the next two years.

Analysys Mason expects Communications service providers (CSPs) are expected to account for 18 percent of worldwide enterprise cloud services revenue by 2017 as they bundle more offerings with core connectivity with cloud computing.

SEMs with one and 249 employees accounted for 43% of total public cloud services revenue by the end of 2012 largely because of fewer security-related concerns when adopting cloud services.

SMEs’ awareness of public cloud solutions will continue to increase the usability of SME cloud services will continue to increase as vendors and CSPs create affordable, easy-to-use solutions CSPs will continue to add solutions to their portfolios that are targeted towards SMEs.