You can transfer items directly from one organization to another, or transfer items through intransit inventory. You can also use internal requisitions to replenish inventory to another organization; however, internal requisitions do not support freight charges. You can also transfer inventory between discrete and process organizations. As a result, you must properly handle the costing and accounting of transfers between process and discrete organizations. Transfers  between discrete and process organizations use a transfer price that is set up between the organizations.

Inter-organizational transfers use the following functionality:
Intransit inventory
Intransit inventory represents inventory items that have not arrived at the receiving organization. You can move items from the shipping organization to intransit inventory using the Inter-organization Transfer window. Use the Receipts window to move items to the receiving organization.

Direct Inter-Organization transfer
When the inter-organization relationship is set to direct transfer in the Shipping Networks window, an issue and receipt transaction are performed in one step.

Inter-Organization receipt
Inventory creates the following calculation for material received intransit and material received directly from another organization:
Current average or standard cost from shipping organization multiplied by transaction quantity plus freight charges and transfer credit charges.
For a direct receipt, the organization that receives the material does not perform a transaction. The shipping organization performs a ship transaction to the receiving organization. Inventory considers the transfer a receipt in the receiving organization and updates the cost.

Elemental cost visibility
You can set elemental cost visibility during inter-organization transfers either to preserve the shipping organization's elemental costs or to summarize all elemental costs into the material cost element. Enable this option using the Elemental Visibility Enabled check box on the Main tab in the Shipping Networks window. This option is available for each line in the shipping network, regardless of direction. Combining all cost elements into the material cost element assures that the receiving organization does not have another organization's overhead in its calculation.

Expense subinventories and expense items
When you receive an inter-organization transfer into an expense subinventory, or receive an expense inventory item, set the Oracle Inventory INV: Allow Expense to Asset Transfer profile option is set to Yes. This issues the material from the expense subinventory. When you receive to expense locations or receive expense inventory items, the subinventory expense account is debited for the receiving organization instead of the valuation accounts. The subinventory expense account is charged the total transaction value from the other organization.

Inter-Organization transfers and ledgers
The Inter-Organization Direct Transfer transaction supports transfers from any ledger, including ledgers in different currencies.

Freight transactions
The Free on Board (FOB) point influences the accounting entries generated for the shipment to intransit inventory. The FOB point is determined by how the inter-organization shipping network is defined in the Shipping Networks window. In addition to accounting for the movement of the items, these transactions also update the inter-organization receivable and payable accounts. The FOB point changes the accounting for freight. When FOB is receipt, freight is accrued on the receipt transaction by the shipping organization. When FOB is shipment, freight is accrued on the shipment transaction by the receiving organization. For direct transfers, the receipt and shipment transactions occur at the same time.