Understanding Adjustments for Return to Vendor Stock

The return to vendor (RTV) feature in PeopleSoft Purchasing can generate an adjustment in PeopleSoft Inventory in order to scrap stock received from a supplier. There are a variety of business reasons for scrapping RTV stock; including, receiving defective materials or perishable items shipped in error. When you return or scrap goods purchased from a supplier, you enter a Return to Vendor (RTV) transaction in PeopleSoft Purchasing. Typically, this RTV transaction specifies the purchase order from which the materials were acquired; however, returns can be processed in PeopleSoft Purchasing without referencing the original purchase order if this detail is no longer available. Once you've created an RTV ID in PeopleSoft Purchasing, steps are taken in PeopleSoft Inventory to remove any stock that has already been put away and update the inventory quantity balances. Note that if the stock is rejected upon receipt and does not get put away in PeopleSoft Inventory, then it does not impact inventory balances and is handled exclusively in PeopleSoft Purchasing. If the stock was put away into a PeopleSoft Inventory business unit, then the RTV transaction (Purchasing, Return To Vendor, Add/Update RTV) determines what actions are taken in PeopleSoft Inventory:

  • When the RTV line disposition is Ship, inventory personnel retrieve the stock from the current material storage location and ship the stock back to the supplier. A material stock request (MSR) is created to record this action.

  • When the RTV line disposition is Destroy, inventory personnel retrieve and destroy the stock. An inventory adjustment is used to record this action.

This section discusses scrapping inventory stock when the RTV line disposition is Destroy. For information on shipping inventory stock back to the supplier, when the RTV line disposition is Ship, see the "Creating Order for Fulfillment" topic of this documentation.

See Creating Return to Vendor (RTV) Stock Requests.

Note: The entire return-to-vendor feature includes elements of PeopleSoft Purchasing, Payables, Cost Management, and Inventory. For a complete understanding of RTV, see the PeopleSoft Purchasing .

See .Understanding the RTV Business Process

Using the RTV Inventory Destroy Option

Based on your organization's needs, select an RTV Inventory Destroy Option. This option determines how users record an inventory adjustment transaction to scrap supplier-received stock. The options for the RTV Inventory Destroy Option field are:

  1. Express The express option enables a user to use one step to record the RTV in PeopleSoft Purchasing and create the adjustment transaction in PeopleSoft Inventory. When the RTV transaction is saved in PeopleSoft Purchasing, the system generates an XML message using the INVENTORY_ADJUSTMENT EIP.

    Note: For RTV lines using an inventory business unit that utilizes a warehouse management system (WMS) for their warehousing processes, the express option cannot be used because it could cause the stock quantities between the PeopleSoft Inventory business unit and the WMS to become out of balance. The Use External Warehouse Control check box on the Inventory Definition - Business Unit Options page controls the integration to a WMS.

  2. Manual The manual option splits the RTV creation and the adjustment transaction creation into separate steps. In this method, a user must create the RTV transaction in PeopleSoft Purchasing and then a user must create the adjustment transaction to retrieve and destroy the rejected stock using the Adjustments component (Inventory, Manage Inventory, Adjustments).

The RTV Inventory Destroy Option field has the following default hierarchy to the individual RTV line:

  • The RTV Inventory Destroy Option field can be defined for the Purchasing business unit using the Purchasing Definition - Business Unit Options page (Set Up Financials/Supply Chain, Business Unit Related, Purchasing, Purchasing Definition, Business Unit Options). The values of Express or Manual can be used in this RTV Inventory Destroy Option field.

  • The RTV Inventory Destroy Option field can be defined for the user using the Procurement - Receiver Setup page of the Define User Preferences component (Set Up Financials/Supply Chain, Common Definitions, User Preferences, Define User Preferences, Procurement, select the Receiver / RTV Setup link). The value at the user-level overrides the business unit-level. The values of Express, Manual, or Default to Business Unit can be used in this RTV Inventory Destroy Option field.

  • The default value for the RTV Inventory Destroy Option field is placed in the line level of the RTV transaction in the Inventory Process field (Purchasing, Return To Vendor, Add/Update RTV, Source Information tab). The values of Express or Manual can be changed for the individual RTV line. The RTV line disposition field must have the value of Destroy in order to display the RTV Inventory Destroy Options.

To scrap RTV stock using the RTV Inventory Destroy Option of Manual:

  1. Create a Destroy RTV transaction in PeopleSoft Purchasing ((Purchasing, Return To Vendor, Add/Update RTV).

  2. Add a scrap adjustment using the Adjustments page (Inventory, Manage Inventory, Adjustments). Select the value of Scrap RTV in the Adjustment Type field and enter the needed information.

  3. Save the Adjustments page to update the RTV Line (RTV_LN) and RTV Line Distribution (RTV_LN_DISTRIB) tables in PeopleSoft Purchasing with the destroyed quantities. It also updates the line status in the RTV Line table if the adjusted quantity is greater than or equal to the return quantity.

To scrap RTV stock using the RTV Inventory Destroy Option of Express:

  1. Create a Destroy RTV transaction in PeopleSoft Purchasing ((Purchasing, Return To Vendor, Add/Update RTV).

  2. When you save the RTV transaction, the system launches the INVENTORY_ADJUSTMENT EIP and creates an Scrap RTV adjustment in PeopleSoft Inventory. The Quantity Adjustments process (SCM Integrations, Process Transactions, Inventory, Quantity Adjustments) updates the RTV Line (RTV_LN) and RTV Line Distribution (RTV_LN_DISTRIB) tables in PeopleSoft Purchasing with the destroyed quantities. It also updates the line status in the RTV Line table if the adjusted quantity is greater than or equal to the return quantity.

For information on the setup of the return to vendor feature, see the Managing Vendor Returns topic of the PeopleSoft Purchasing .