Suppose one rule is built based on multiple attributes as done in above example:
The OR condition is applicable when evaluating multiple conditions. In the example above, either the ‘Customer Category’ OR ‘Customer’ OR ‘Sales Channel’ is taken into consideration.

Criteria for the rule:
Criteria can be ‘Item’ or ‘Item Category’


If you select Category as a criterion then you will see “Item Categories
Codes” from the Category Set which is assigned as ‘Default Category Set’
for Order Entry functional area for that OU.
Example:
In our case ‘Order Entry’ has ‘Inv.Item’ category set assigned so we
will be able see category codes from ‘Inv.Item’ Category set only.


Item Validation Organization is referred to validate ‘Item + Category’ combination

Generally Available Flag:
We can set up rules to define when an item or item category is generally not available (the Generally Available box is unselected)
with the conditions available for that rule. For example, Item X is
generally not available, however, since you have set up conditions at
the Rule Level, it is available for a particular customer, or region or
customer class.
Conclusion:
Generally Available box is unselected: Oracle will allow putting order for Criteria + ruling combination
Generally Available box is Selected:      Oracle will not allow putting order for Criteria + Rule combination

This is illustrated in the example below:

Case 1: Unselect Generally Available

This means, Item ‘AS54999’ is generally not available for all, but you want to sell it to Customer ‘A. C. Networks’ only.

So this rule allows putting order for Customer + Item combination.

Case 2: Select Generally Available


This means, Item ‘AS54999’ is generally available but you do not want Customer ‘A. C. Networks’ to order it.
So this rule does not allow putting order for Customer + Item combination



Effect of “OM: Use Materialized View for Items LOV (Honors Item Orderability Rules)”

If the value of the profile option OM: Use Materialized View for Items LOV
(Honors Item Orderability Rules) is set to No, then the Ordered Items
LOV lists all the items of the item validation organization of the
current operating unit. This doesn’t consider the defined item
orderability rules, however if there is a defined rule that prevents the
item from being ordered, then an error message is displayed while
saving the order. You will not be able to save the order. Below is
Simple test case for Item Orderability feature.

Steps to Define the Item Orderability Rule- 

1. Select the Criteria  (Item or Category. And Generally Available or not)
2. Select criteria values (Item Number / Category Code)
3. Select the Rules Level/s (by selecting any combinations of above 11 attributes)
4. Select Rules Level value.