The Inventory Organization represents an organization for which you track inventory transactions and balances. These organizations might be manufacturing or distribution centers. Several modules and functions in the Oracle Manufacturing and Supply Chain Management suite secure information by Inventory Organization.

Inventory Organizations are associated with OUs. Each Inventory Organization has a parent OU and can serve other OUs.

Various functions in the Oracle E-Business Suite use this organization classification. For example, to activate the "Purchasing Receiving" function, your responsibility must have access to an organization that is classified as an Inventory Organization.
Through its parent Operating Unit, the Inventory Organization financially impacts the Ledger to which it rolls up. For example, requisition transactions or replenishment of supplies are created against an Inventory Organization, which then have a financial impact on the Ledger.