What are two outcomes when a lot expires on an item with lot control enabled?

Question

Options

• AIt remains an inventory, but is not considered on-hand when the user is performing min-max or
• BIt is issued out of stores.
• CIt cannot be transacted.
• DIt is not included in cycle counts.
• EIt cannot be reserved for a date beyond the expiration date.

Explanation

The correct answers are A and C.

When a lot expires in a lot-controlled inventory system (such as Oracle EBS), two key things happen: the physical stock still exists in the warehouse and shows in inventory records, but the system excludes it from available quantity calculations used in replenishment planning (min-max, reorder point). Additionally, the system blocks any transactions - receipts, issues, transfers - against that expired lot to prevent use of potentially unsafe or non-compliant material.

Why the distractors are wrong:

• B (Issued out of stores): The system does the opposite - it blocks transactions, not auto-issues the material.
• D (Not included in cycle counts): Expired lots are still counted in cycle counts because they physically exist; the system needs an accurate picture of all stock, including expired.
• E (Cannot be reserved beyond the expiration date): This is actually true behavior in many ERP systems, but it is a pre-expiration constraint (you can't reserve it before it expires for a date after it expires), not a consequence of the lot already being expired - making it a distractor in the context of this question.

Memory tip: Think of an expired lot like expired medication on a pharmacy shelf - it's still there (inventory record remains), but the pharmacist can't fill a prescription with it (no transactions), and it won't count toward "available stock" for ordering decisions (excluded from planning).

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