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Following are prerequisite before Assigning category to an Item.

  1. Organization must be defined in Oracle.
  2. Item must be defined.
  3. Category set name and Category Combination Should be defined.

In Below example Item 'NewTestItem' is considered. Its inventory item id is 83456 and belong to 'Vision operation' Organization with Org id 106.
Category Set name 'Inventory' with category Set id '1' and Category 'NONE' with category id '5' is needs to be assigned to the Item.
Below Code can be used for Assigning the Category set and Category Combination for the item 'NewTestItem'.
Code is tested in Oracel11i (11.5.10).

DECLARE

X_RETURN_STATUS  VARCHAR2(1000);
X_ERRORCODE         NUMBER;
X_MSG_COUNT        NUMBER;
X_MSG_DATA          VARCHAR2(1000);

BEGIN

  --Apps Initialization is available in another section. Use the below link to know in detail
        Apps_Initialize;

INV_ITEM_CATEGORY_PUB.CREATE_CATEGORY_ASSIGNMENT
                                                (  P_API_VERSION            => 1.0, 
                                                   P_INIT_MSG_LIST         => FND_API.G_FALSE, 
                                                   P_COMMIT                   => FND_API.G_FALSE, 
                                                   X_RETURN_STATUS       => X_RETURN_STATUS, 
                                                   X_ERRORCODE              => X_ERRORCODE, 
                                                   X_MSG_COUNT             => X_MSG_COUNT, 
                                                   X_MSG_DATA               => X_MSG_DATA, 
                                                   P_CATEGORY_ID           => 5, 
                                                   P_CATEGORY_SET_ID    => 1, 
                                                   P_INVENTORY_ITEM_ID  => 83456, 
                                                   P_ORGANIZATION_ID     => 106);

   IF x_return_status = fnd_api.g_ret_sts_success
   THEN
      COMMIT;
      DBMS_OUTPUT.put_line ('Item Category Assignment using API is Successful');
   ELSE
      BEGIN
         IF (fnd_msg_pub.count_msg > 1)
         THEN
            FOR k IN 1 .. fnd_msg_pub.count_msg
            LOOP
               fnd_msg_pub.get (p_msg_index            => k,
                                             p_encoded            => 'F',
                                             p_data                 => x_msg_data,
                                             p_msg_index_out   => x_msg_index_out
                                            );

               DBMS_OUTPUT.PUT_LINE('x_msg_data:= ' || x_msg_data);
               IF x_msg_data IS NOT NULL
               THEN
                  l_error_message := l_error_message || '-' || x_msg_data;
               END IF;
            END LOOP;
         ELSE
            --Only one error
            fnd_msg_pub.get (p_msg_index             => 1,
                                           p_encoded            => 'F',
                                           p_data                 => x_msg_data,
                                           p_msg_index_out   => x_msg_index_out
                                         );
            l_error_message := x_msg_data;
         END IF;

         DBMS_OUTPUT.put_line (   'Error encountered by the API is '
                               || l_error_message
                              );
         ROLLBACK;
      EXCEPTION
         WHEN OTHERS
         THEN
            l_error_message := SQLERRM;
            DBMS_OUTPUT.put_line (   'Error encountered by the API is '
                                  || l_error_message
                                 );
      END;
   END IF;

EXCEPTION
  WHEN OTHERS THEN
      DBMS_OUTPUT.put_line('Error in Assigning Category to an Item and error is '||SUBSTR(SQLERRM,1,200));
END;
/