R12: Is Inventory setup mandatory for Operating Unit setup?

Hello,
I am doing the setup of an operating unit for a business on a fresh R12 install.
Is the setting up of the Inventory Organization (with all the info like e.g material account, cost of goods sold etc) is mandatory even if the business will not setup inventory module?
Vik

Hello Manish,
In the example you gave, when talking about
Jain, Manish wrote:
..the system specifically ask you to enter the Inventory Organization field with the inv org you have defined.are you referring to the setup from Financial Options --> Supplier-Purchasing tab --> where we have a field "Inventory Organization"?
This is not a required field and can left null.
Or If we do not have the Operating Unit with "Inventory Organization" as classification, an error will popup when setting up payables?
The problem is that, we have to ask the client about the accounting key for material, COGS etc... and he want to know why we need this since he does not use Inventory module.
Vik

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