SAP MM Interview Questions with SMART ANSWERS

1) What is the use of SAP Material Management module?

Ans:

• SAP Materials Management (MM) is a part of Logistics area and helps to manage the procurement
activity of an organization from procurement.
• It supports all aspects of material management (planning, control etc).
• It is the backbone of the Logistics area which incorporates modules like Sales and Distribution,
Production Planning, Plant Maintenance, Project Systems, Warehouse Management which are
extremely obsessed on Materials Management module.

2) What do you understand from Procurement process in SAP MM?

Ans:

Every organization acquires material or services to complete its business needs. The process of buying
materials and obtaining services from vendors or dealers is procurement.

3) Explain steps in Procurement Lifecycle?

Ans:

Requirement and Information Gathering

• Procurement process starts with gathering information about product and its quantity. Then for
required products and services, it is necessary to look for suppliers who can satisfy the requirements.

Supplier Contact

• After gathering requirements one will look for the suppliers who can fulfill the requirements. Based
on that quotation request or information request can be made to suppliers or direct contact can be
made with them.

Background Review

• Once the supplier is known product/service quality is checked, and any necessities for services such
as installation, warranty and its maintenance are investigated. Some samples of the products can be
obtained for quality examination.

Negotiation

• Some negotiations with suppliers is made regarding price, availability and delivery schedule of the
products/services. After this a contract is signed that is a binding legal document between supplier
and ordering party. A contract will include all necessary information like price and quantity of
material, delivery date, etc.

Order fulfillment

• Ordered material will be shipped, delivered to the ordering party and supplier is paid accordingly.
Training and Installation of product or services may also be included.
Consumption, Maintenance and Disposal

• As the products/service is consumed the performance of the products or services is evaluated and
any follow up service support if required is analyzed.

4) A Purchase requisition is an internal document or external document?

Ans:

Internal document, it is the phase in which purchasing department is informed about the requirement of
items or services required for business purpose.

5) What are the different type of Basic Procurement?

Ans:

There are 2 types of Basic procurement which are shown below −

• Procurement for Stock vs Consumption

• External vs Internal Procurement

6) What is the difference between Procurement for stock vs consumption?

Ans:

Procurement for Stock − A stock material is a material that is kept in stock. These materials are kept in stock
once received from the vendor. The stock of this material keeps on increasing or decreasing based on
amount of the quantity received or issued. To order a material for stock, the material must have a master
record within the system.

Procurement for Direct Consumption − When procurement is for direct consumption i.e. it will be consumed
as soon as it is received, the user should specify the consumption purpose. To order a material for
consumption, the material may have a master record within the system.

7) What is External Procurement?

Ans:

External procurement − It is the process of procuring goods or services from external vendors. There are 3
basic forms of external procurement generally supported by the Purchasing component of IT system.

One time orders are generally used for material and services that are ordered irregularly.

Longer-term contracts with the subsequent issue of release orders – For materials that are being ordered
regularly and in large quantities, we can negotiate deal with the vendor (seller) for pricing or conditions &
record then in a contract. In a contract you also specify the validity date.

Longer-term scheduling agreements and delivery schedules – If a material is ordered on an everyday basis
and is to be delivered according to an exact time schedule, then you set up a scheduling agreement.
8) What is Internal Procurement?

Ans:

Internal Procurement − Large corporate organizations may own multiple separate businesses or companies.
Internal Procurement is process of getting material and services from among identical company. So, each of
these companies maintains a complete bookkeeping system with separate Balance, Profit & Loss Statements
so that when trade occurs between them it will be recorded.

9) What is Special Procurement?

Ans:

Special Procurement

Special stocks are stocks that are managed differently as these stocks did not belong to company and these
are being kept at some particular location.

10) What is Consignment Stock?

Ans:

Consignment Stocks

Material that is available at our store premises, however it still belongs to the vendor (seller)/Owner of the
material. If you utilize the material from consignment stocks, then you have to pay to the vendor.

11) What are the common assignment types in SAP MM system?

Ans:

• Plant to Company code

• Purchasing organization to company code
• Purchasing organization to Plant
• Standard purchasing organization to plant

12) What are the different Info record types?

Ans:

• Standard
• Consignment
• Subcontracting
• Pipeline

13) How do you flag a material for deletion?

Ans:

A deletion flag can be set at client level, plant level or storage location level. Transaction MM06 is used to
mark a material for deletion.
14) What is the use of Purchase Info Record?

Ans:

Purchasing info record stores information on material and vendor supplying that material. For Example:
Vendors current price of a particular material is stored in info record.

15) Where do you maintain Purchase Info Records in SAP MM?

Ans:

Purchase info record can be maintained at plant level or at purchasing organization level.

16) What is Purchase Order?

Ans:

Purchase order is the formal and final confirmation of the requirements which is sent to vendor to supply
material or services. Purchase order will include important information like name of material with its
corresponding plant, details of purchasing organization with its company code, name of vendor, and date
for delivery of material.

17) What do you understand by Goods Receipt in SAP system?

Ans:

After processing of purchase order by vendor, material is delivered to ordering party and this process is
called as goods receipt. So, goods receipt is the phase in which the material is received by the ordering party
and the condition and quality are verified. Once material is verified against quality then goods receipt is
posted.

18) How do you post goods receipt?

Ans:

Path to post Goods Receipt −

Logistics ⇒ Materials Management ⇒ Inventory management ⇒ Goods movement ⇒ Goods movement

T-Code: MIGO
19) What are the different Procurement types that you can create Purchase requisition?

Ans:

Purchase requisition can be created for the following procurement types −

Standard − Getting finished material from vendor.

Subcontracting − Providing raw material to vendor and getting finished material.

Consignment − Procuring material that is kept in company’s premises and paying to vendor for that.

Stock transfer − Getting material from within the organization.

External service − Getting services like maintenance from third party vendor.

20) How can you create a Purchase Order from Purchase Requisition?

Ans:

Purchase Order from purchase requisition can be created by following below steps −

T-Code: ME21N

21) What is Request for Quotation RFQ?

Ans:

Request for quotation is a form of invitation that is sent to vendors to submit quotation indicating pricing
and their terms and conditions.

RFQ contains details about goods or services, quantity, date of delivery and date of bid on which it is to be
submitted.

22) What is the use of document type in SAP system?

Ans:

In SAP system, you use Document Type to define different methods or procedures for a transaction.

23) What is free item in SAP system?

Ans:

The Price will be marked zero for free item. We can tick the item as free item while creating PO in system.

24) Why do you use Material type?

Material type in SAP system is used to group various materials based on some common properties.
25) What is Material Status?

Ans:

It is 2 digit code and is used to determine the material usability.

26) What are the different stock types in SAP system?

Ans:

• Restricted Stock
• Unrestricted Stock
• Quality Inspection Stock
• Blocked Stock
• GR Blocked Stock

27) What do you understand by GR Blocked stock?

Ans:

This is conditionally accepted stock and not the unrestricted stock.

28) What are the different Stock transfer types in SAP system?

Ans:

• Inter Company
• Intra Company
• Intra Plant

29) What is Intra plant stock transfer type in SAP MM?

Ans:

Storage Location to Storage Location

30) What is an Outline agreement?

Ans:

Outline agreement is a long term purchasing agreement with vendor containing terms and conditions
regarding the material that is supplied by vendor.

Outline agreement are valid up to certain period of time and cover a certain predefined quantity or value.

31) Is it possible that you can use scales in Quotation?

Ans:

No
32) What do you understand by Material Master? How Material master is maintained in SAP system?

Ans:

Material master contains information related to different material types like finished product, raw material.
Material master can be used for identifying a product, purchase material, goods issue or good receipt, MRP
and production confirmation.

For Material master data, use T-code: MM01 or go to Logistics → Production → Master Data → Material
Master → Material → Create (General) → immediately

33) What is the use of BOM usage type 1 in SAP system?

Ans:

It is used for Production

34) How do you create Purchase Order or Purchase Requisition from Material Requirement Planning?

Ans:

The PR is created according to the safety stock mentioned for the material or can be triggered from a
requirement. For creating a PO, you need to have the scheduling agreement in place. After the MRP is run
the schedule lines are generated which are nothing but the PO.

35) What is MRP run in SAP system?

Ans:

MRP run or planning run is an engine which is used to fill demand and supply gap. Issues & Receipts are
called MRP Elements. Issues include PIRs, Dependent Requirements, Order Reservations, Sales Orders,
Issuing Stock Transfer Orders, etc. and receipts include Production Orders, Purchase Requisitions, Purchase
Orders, Open Production Orders, Receiving Stock Transfer Order, Schedule lines, etc.

36) How do you check Stock Requirement List in SAP system?

Ans:

This is used to see current stock and planned receipts. Use T-code: MD04

Enter Material and Plant to see list.

37) What is the use of MRP list?

Ans:

MRP List is used to generate static report that contains planning run material wise and it displays time of
MRP run at the top.

Use T-Code: MD05

38) What is the Production Order?

Ans:

A Production order is used to define the material to be produced, plant location where production has to be
done, date and time of production, quantity of goods required. A Production Order also defines which
components and sequence of operations are to be used and how the order costs are to be settled.

39) How do you check the available stock at any point of time?

Ans:

You can use Stock overview to check the available stock at any point of time. Stock overview can be checked
using T-Code: MMBE

40) What is a Contract?

Ans:

Contract is a long term outline agreement between vendor and ordering party over predefined material or
services over certain framework of time. There are two types of contract −

Quantity Contract −

In this type of contract overall value is specified in terms of total quantity of material to be supplied by
vendor.

Value Contract −

In this type of contract overall value is specified in terms of total amount to be paid for that material to the
vendor.

41) What is the movement type for Goods issue reversal?

Ans:

Movement type is 262 in Goods issue reversal.

42) What is the use of Material Document List?

Ans:

Material document list is used to generate any goods movement such as goods receipt, goods issue for a
production order, etc.

43) Can you generate packing/picking lists for goods issue in SAP MM?

Ans:

In SAP EWM you can generate packing list.

44) What is a Scheduling agreement?

Ans:

Scheduling agreement is a long term outline agreement between vendor and ordering party over a
predefined material or service which are procured on predetermined dates over a framework of time.

45) What is Quota Arrangement in SAP system?

Ans:

A particular material can be procured from different vendors depending upon the requirement. So, total
requirement of a material is distributed to different vendor’s i.e. quota is assigned to each source of supply.
This is known as quota arrangement.

46) How do you check Quota Rating?

Ans:

Quota rating = (Quota Allocated Quantity + Quota Base Quantity)/Quota

47) What is the use of Posting Period in SAP system?

Ans:

SAP ERP systems were designed so that business can be conducted in an efficient way. Various documents
like purchase order, request for quotation, goods receipt are essential documents in a business. These
documents need security i.e. if any of documents is posted incorrectly then business can be affected at
various concern levels. So, to secure these documents we have a concept of posting period. Posting period
means it will allow you to post and make changes in the documents only in a specific time period.

48) How do you define Posting Period in a company?

Ans:

Posting period for a company can be defined using five fields which are as follows −

• Maintain Fiscal Year Variant

• Assign Fiscal Year Variant to Company Code
• Define Variants for Open Posting Periods
• Assign Variant to Company Code
• Open and Close Posting Periods

49) What is the last step in Procurement cycle?

Ans:

• Invoice verification marks the end of procurement after purchase order and goods receipt.
• Invoice posting will update all related documents in financial and accounting.
• Blocked invoice that vary from actual invoice can be processed through invoice verification.
50) What are the integral components in SAP MM?

Ans:

The Components of SAP MM are listed below:

• Purchasing
• Inventory management
• Invoice verification
• Physical inventory
• Valuation
• Materials requirements planning
• Materials master
• Service master
• Foreign trade/customs

51) Mention t-code to create Purchase Requisition in MM?

Ans:

Transaction code ME51N can be used to create Purchase Requisition in MM

52) What are the various types of Basic Procurement?

Ans:

Basic procurement is of 2 types as listed below:

• Procurement for Stock vs Consumption

• External vs Internal Procurement

53) List few of the Common Stock Transport Order Movement Types?

Ans:

By utilizing MT 301, one step transfers of materials can be posted. The other different transport scenarios
vary in the MTs by the good receipt and good Issues. Common Goods Issues may utilize MTs 303, 351, 641,
or 643 in the STO. A STOs Good Receipt generally uses MT 101.

54) List the difference between SAP MDM and SAP MM?

Ans:

MM (Material Management) is a module which deals with the day to day operations of inventory
management (stuff related to material valuation, storage, requirement planning etc ) and Procurement
processes ( is related to goods, receipt, Purchase orders BOMs etc).

MDM refers to Master Data management, It is business specific data, which encompasses information
regarding vendor/customer names, Product descriptions, along with banking information.
55) What is Pricing procedure in MM?

Ans:

In the MM module, the Pricing procedure is a channel for determining the prices in purchasing documents.
This give us functionality for assigning different calculation types for various needs. During PO and RFQ
creation In MM module, the pricing procedure is utilized. The total value of material is based on all the
addition and subtraction such as surcharge, discount, tax, freight, etc.

56) What are the steps needed to configure pricing procedure in SAP MM?

Ans:

• Maintaining Condition Table

• Maintaining Access Sequence
• Maintaining the Condition type
• Maintaining the Calculation Schema
• For the vendor, maintaining the Schema Group
• For Purchasing Organizations, maintaining the Schema Groups
• Assigning Schema Group to Purchasing Organization
• Maintaining Schema Determination
• Assigning Schema group to Vendor
• Maintaining condition record

57) What are the various steps involved in Procurement Cycle of SAP MM?

Ans:

• Determining the requirements of material

• Determining the source
• Selecting the vendor and Comparing the Quotations
• Purchase Order Processing
• Purchase Order Follow-Up
• Receiving Goods and managing Inventory
• Verifying the Invoice
• Payment to vendor

58) How can we post goods receipt?

Ans:

In T-Code: MIGO navigate to post Goods Receipt using the path given below −

Logistics -> Materials Management -> Inventory management -> Goods movement -> Goods movement
59) How can a user link a document to a vendor master record?

Ans:

By using the XK01 transaction code the user can successfully link the document with the vendor master
record or by utilizing the following menu path:

SAP Menu -> Logistics -> Material Management -> Purchasing -> Master Data -> Vendor -> Central -> XK01->
Create.

60) What do you mean by Special stocks?

Ans:

Special stocks are all those stocks which are managed separately as they don’t belong to your company or
these are stored at a specific location.

61) What are the various Special Procurement Types in SAP?

Ans:

Lister below the following special procurement types available in the SAP System:

• Consignment
• Subcontracting
• Stock transfer using stock transport order
• Third-Party Processing
• Returnable transport packaging
• Pipeline Handling

62) How would the user change unit of measures in mmr?

Ans:

Please follow the steps below:

• Go to mm02 t.code
• Enter your mat number
• Now select the over screen and then select basic data 1,
• Now you will find basic unit of measure which you can modify.

63) How can G/L Accounts for MM Account Determination be verified?

Ans:

The program RM07C030 verifies all the G/L account definition in your Material Master valuation class. User
can Search it via Company code and Valuation area.
64) In Materials Management (MM), what is Data Archiving?

Ans:

Data archiving removes mass data which is no longer required by the system (but that still should be
available for reporting) from the database. The SAP data archiving concept is typically based on the archiving
objects of the Archive Development Kit (ADK).

65) Define Stock Population?

Ans:

The stock population is known as the total of all stock management units which are encompassed in an
inventory sampling. All these stock management units are exclusively defined through the allocation of the
stock management levels to a given inventory sampling. As a result of this, the stock population is also
defined when the user allocates the level of the stock management.

66) How to make a Dummy Reservation?

Ans:

The user can try to create a new movement type with reference to 201 movement type.

67) How can the user include new custom field in Services tab for a Service PO item?

Ans:

The user can modify the description in the In the user field by customizing (SPRO) and appended a search
help to it.

68) How to create movement type?

Ans:

Assume we are creating movement type 281 Goods issue for a network

Please follow the steps below:

• First, navigate to Transaction OMJJ

• Now the standard movement type 201
• Then click on copy and overwrite the 201 with 281
• Now click the Enter button, then click on Copy all
• Please select the new movement type 281
• Now On the left-hand column screen, click on Reversal/follow-on movement
• At last fill in the reversal movement type
69) What is RTP?

Ans:

RTP (Returnable Transport Packaging) is referred to a multi-trip packaging medium (for instance, containers
or pallets) through which the goods can be transported multiple times between customers and vendors.
Returnable transport packaging from a vendor which is stored at a place on your premises is treated as a
special stock and is clearly assigned as a belonging to the vendor. RTP is vendor’s property, therefore, it is
excluded from the customer’s valuated stock.

70) How can the user post returnable Transport Packaging (RTP) Quantities at Goods Receipt for
Purchase Order?

Ans:

A quantity of returnable transport packaging can be entered at goods receipt for a purchase order, as listed
below:

• In Inventory Management menu, navigate to Select -> Goods movement -> Goods receipt -> For
purchase order -> PO number known -> or path PO number unknown.
• On the initial screen please enters the movement type (101) and also the order number (or the
selection criteria for the purchase order).
• Now please select and copy the required items.
• Now in the overview screen, choose Edit -> W/o purchase order -> Enter.
• A popup window will appear, Please enter the movement type and the special stock indicator (e.g.
501 M ) for the quantity of returnable transport packaging.
• Now please enters the returnable transport packaging items.
• At last, post the goods movement.

71) How can you transfer Posting of RTP stock between Storage Locations?

Ans:

A transfer posting of RTP stock between two storage locations is entered as listed below:

• In Inventory Management menu, navigate to Goods movement -> Transfer posting -.

• Now enter data to the initial screen:
• Now nvigate to Movement type Transfer posting -> RTP stock -> SLoc to SLoc -> ( -> 311 M ->).
• Now give the plant and the issuing storage location.
• Give vendor and the receiving storage location on the next screen.
• Please enter all the items.
• At last, post the goods movement.
72) What is the difference between the stock transfer between two plants belonging to same
company code and those belonging to different company code?

Ans:

Stock Transfer Order (STO) for Intra Company

• The stock transfer between two plants are done with one Company code
• Purchase Order Type ‘UB’ is used in this case
• Delivery Type ‘NL’ is used
• Goods Movement type is 641 for Intra Company
• Item Category in delivery is NLN

Stock Transfer Purchase Order (STPO) for Intra Company

• Two Different Company Codes are required for Stock Transfer Purchase Orders between two plants
• Purchase Order Type ‘NB’ is used in this case
• Delivery Type ‘NLCC’ is used
• Goods Movement type is 643 for Inter-Company
• Item Category in delivery is NLC

73) WHAT IS SUB-CONTRACTING CYCLE IN MM?

Ans:

In Sub-contracting, we send raw material or input material to sub-contractor and then receive the finished
goods. A sub-contracting PO is created with item category ‘L’. Input material is sent to vendor for processing
with movement type 541. When GR is done using movement type 101, movement type 543 takes place
automatically and takes care of consumed material.

74) WHAT IS THE DIFFERENCE BETWEEN CONTRACTS AND SCHEDULING AGREEMENTS?

Ans:

A contract is a pre-determined long term agreement to supply material or service for a certain period of
time. Specific delivery dates are not mentioned in the contracts. Contracts can be of two types: Value
Contract or Quantity contract

In Scheduling agreements, we can enter scheduling lines which gives details of quantity that should be
delivered on specific date. Plant must be entered in SA so that materials can be delivered at plant. These are
generally used for materials whose requirements are predictable.
75) WHAT IS MEANT BY BATCHES?

Ans:

A batch is a subset of the total stock of a material. It represents a homogeneous unit which has unique
specification. Normally, a batch is assigned to the quantity of material produced during a given production
run. A batch number uniqueness can be assigned at any of the following 3 levels:

At client level: The same batch number can be assigned only once within the entire client.

At material and plant combination level: Same batch number can be assigned to material with different
specification in each plant.

At material number level: A batch assigned to a material has the same specification for all plants where
material is extended. Batch number can be reassigned with a different specification for each material.

76) IF YOU HAVE A MULTI-LINEITEM PO, CAN YOU RELEASE THE PO ITEM BY ITEM?

Ans:

No, a PO is released at the header level meaning a total release or “With Classification”. PRs, on the other
hand, have two release procedures possible. “With Classification” as described above, and “Without
Classification” where it is only possible to release the PR item by item

77) WHAT IS A PRICE COMPARISON?

Ans:

Perform a price comparison using ME49 and one may compare quotations from different vendors.

78) WHAT IS A QUOTATION?

Ans:

Once a vendor has received an RFQ, the vendor will send back a quote that will be legally binding for a certain
period of time. Specifically, a Quotation is an offer by a vendor to a purchasing organization regarding the
supply of material(s) or performance of service(s) subject to specified conditions.

79) WHAT ARE THE DIFFERENT TYPES OF INVOICE VERIFICATION?

Ans:

Invoices based on Purchase Orders. With purchase-order-based Invoice Verification, all of the items of a
purchase order can be settled together, regardless of whether or not an item has been received in several
partial deliveries. All of the deliveries are totaled and posted as one item. Invoices based on Goods Receipts.
With goods receipt-based Invoice Verification, each individual goods receipt is invoiced separately. Invoices
without an order reference. When there is no reference to a PO, it is possible to post the transaction directly
to a Material Account, a G/L Account, or an Asset Account. You can park Invoices that reference POs and GRs
as well as Invoices with no reference in the system. When you park a document or change a parked
document, neither substitution nor validation is supported.

80) WHAT IS THE USE OF ‘SPLIT VALUATION’?

Ans:

Within a valuation area, sometimes, we need to valuate various stocks of a material separately. It can be
because of different origin, quality, status, etc. We use split valuation in such cases. In this case, material is
managed at several partial stocks which are sub-stocks of main material stock. Any transaction, relevant for
valuation, is carried at this partial stock level. In accounting view, we define if we need split valuation for any
material.

81) HOW DO YOU SET ‘AUTOMATIC ACCOUNT ASSIGNMENT’ IN MM?

Ans:

Once OBYC settings are properly done, system finds the correct G/L account using the following data:

Chart of Accounts: Chart of Accounts is determined based on plant or company code used in transaction

Valuation Grouping Code: It is determined based on the valuation area. Valuation Grouping Code is
maintained in t-code OMWD.

Transaction Key: eg. BSX, GBB etc. Transaction keys are determined automatically from the transaction
(invoice verification) or the movement type (inventory management).

Account grouping /Account Modifier (only for offsetting entries, consignment liabilities, and price
differences)

Valuation class of material or (in case of split valuation) the valuation type: The valuation class allows you to
define automatic account determination that is dependent on the material. This can be achieved by assigning
different valuation classes to the materials in material master (Accounting view) and by assigning different
G/L accounts to the posting transaction for every valuation class.

82) WHAT IS A BUSINESS AREA?

Ans:

The business area is an organizational unit within financial accounting. It corresponds to a defined business
segment or area of responsibility, to which value movements recorded in Financial Accounting can be
assigned. It is usually derived automatically as it linked to other organizational units. For eg. Business area
for a combination of plant and division is maintained by t-code OMJ7.
83) WHAT IS A COST CENTER?

Ans:

Cost Center accounting is used for controlling purposes. It is an organizational unit within a controlling area
which represents a defined location of cost incurrence. For example, any department can be a cost center
for recording all expenses incurred for that department.

84) WHAT IS A PROFIT CENTER?

Ans:

Profit Center Accounting evaluates the profit or loss of individual, independent areas within an organization.
Profit center is an organizational unit in controlling to recognize your profit. Profit center is attached to
material master at plant level.

85) HOW TO CREATE TAX CALCULATION PROCEDURE IN MM?

Ans:

Tax can be calculated for each line item of a PO separately based on the tax code. Earlier TAXINJ, which is a
formula based tax procedure, was used. Now, TAXINN, which is a condition based tax procedure, is generally
used. Tax procedure contains the condition type and necessary specification for each condition type.
Account keys are assigned to condition types and these account keys determine the G/L to which the tax
amount is to be posted(OB40). These account keys are maintained using t-code OBCN. (All these transactions
are under Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings). Tax codes are
assigned to country codes and country are linked with tax procedure. Thus, based on tax code,
corresponding tax procedure is determined and then calculation is done based on condition types in that
tax procedure.

86) HOW IS SCRAP MATERIAL TAKEN CARE OF IN SUB-CONTRACTING?

Ans:

Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or Co-Product.
Common practice is to maintain scrap as by-product and receive it back along with processed material.

87) What is RFQ?

Ans:

RFQ is a Request for quotation. It is an invitation that is sent to sellers to submit quotes showing pricing and
also terms and conditions. RFQ also has details regarding the date of delivery, goods and services, quantity,
and date of submission also.
88) What do you mean by consumption-based planning (CBP)?

Ans:

Consumption-based planning or CBP is depended upon past consumption values. It is used to forecast to
find out future requirements. These processes in CBP do not rely on the master production schedule. It is
activated either when the stock level comes below a particular reorder point or when forecast needs
calculating with past consumption values.

89) What is MIRO?

Ans:

MIRO means movement in receipt out. It deals with invoice verification activities in terms of bills that raised
from the vendor’s end. MIRO is basically used by MIRO.

90) What is an RFI?

Ans:

RFI means a request for information. It is used for the business process that assembles written information
about the competencies of sellers.

91) What is an RFP?

Ans:

RFP means Request for Proposal. It is a document where a proposal is sent by a company or agency for the
acquisition of some goods and services to any potential seller to send business proposals.

92) Which steps are used in the RFQ process?

Ans:

There are a number of steps used to process RFQ:

First, enter the t-code (transaction code) as ME41, then enter the RFQ type as ‘AN.’

After this, write down the location, i.e., the late date when the seller submits the quotation. Now, enter the
purchasing group, delivery date, and other information, and press on the click button.

After this, you will be able to watch a new screen wherein you have to fill the item codes. Now enter the item
codes and also the vendor’s details.

Moreover, more requests can be made as per vendors’ details.

93) What is a goods receipt and post goods receipt?

Ans:

When the physical inbound transfer of material and goods are made into the warehouse is known as Goods
receipt. It includes the transfer of those goods that have received from in-plant production or external
vendors. Issuing of goods receipt always results in a hike in stock in the warehouse.

When the receipt of goods are posted with reference to the purchase order with which products or goods
were ordered are known as a post-goods receipt. When the material is sent with reference to a purchase
order, then all departments must make an entry in the system references.

94) How is the vendor created?

Ans:

You can create a vendor by using the transaction code XK01 and performing the following steps:

• Add the vendor name, company code, purchasing organization, account group, and vendor address.
• Add the country, bank key, bank account, and the name of the account holder.
• Save the data.
• This creates a vendor record in the system.

95) What data in material master is maintained at the client level?

Ans:

The general data, i.e., the data applicable to the company as a whole, is stored at the client level. ( apex
training )

96) What is vendor master data?

Ans:

Vendor master data contains details of each vendor that supplies materials or services to an enterprise. The
vendor master data is stored in individual vendor master records consisting of data, such as the vendor’s
name, the vendor’s address, the currency used for the transaction, payment terms, and the contact person’s
name (on the sales staff).
97) What are the different sections in vendor master data?

Ans:

Following are the three sections in vendor master data:

General data— Provides general information about the vendor that can be entered into the system for
creating vendor records. General data can provide the name, address, telephone, and fax of the vendor
through specified search terms. Additional information can also be added to the vendor master record by
the accounting and purchasing departments using the transaction code XK01.

Accounting data —Refers to financial information entered at the company code level. The financial
information includes tax information, bank details, reconciliation account, payment terms, payment
methods, and dunning information. You can enter this financial data using the transaction code FK01.

Purchasing data —Refers to data entered while creating a vendor at the purchasing organization level.
Different purchasing organizations have different purchasing data. The purchasing data includes partner
functions, purchasing default fields, and invoice verification indicators. You can enter this data using the
transaction code MK01.

98) What are the prerequisites for creating a purchasing info record?

Ans:

The prerequisites for creating a purchasing info record are as follows:

Material number —Before creating a purchasing info record, the material number of the material master
record should be known.

Manufacturer part number (MPN) material number —Before ordering a material that has an MPN, you must
know its MPN material number.

Vendor number —You should also know the number on the vendor master record.
99) What are the differences between company-owned special stocks and externally-owned special
stocks?

Ans:

The differences between company-owned special stocks and externally-owned special stocks are listed in
the following table:

Company-Owned Special Stocks

Externally-Owned Special Stocks

Stocks that belong to the company but are stored with the wholesaler or the customer are called company-
owned special stocks.

Stocks that belong to the wholesaler or the customer but are stored at the company are called externally-
owned special stocks.

Company-owned special stocks are managed at the production level.

Externally-owned special stocks are managed at the place where they are stored. ( data science online
training )

Organizational level —If the purchasing info record is for a particular purchasing organization or plant, then
the code specific to that purchasing organization or plant is required.
 SAP MM Interview Questions (Ask 50 Tricky)
Q.What is the difference between the stock transfer between two plants belonging to same company
code and those belonging to different company code?

Answer: A stock transfer from plant to plant generally takes place within a company code. It can, however,
also take place between two company codes, if the plants are assigned to different valuation areas, which
belong to different company codes. Unlike a stock transfer from storage location to storage location, a
stock transfer from plant to plant affects both accounting and Materials Planning, as follows:

Accounting:Accounting is affected if both plants are assigned to different valuation areas. This means that
a stock transfer leads not only to a quantity update but also to a value update (stock value, G/L accounts).
Thus, parallel to the material document for stock transfer, an accounting document is created.

Materials Planning:Materials planning are affected because a change of plant stock is taken into account
by Materials Planning.

What are the important fields in purchasing view?

Answer: RFQ/Quotation Purchase requisition Purchase order Master data (Info record, Source list,
Conditions, Vendors etc.) Outline agreements

Q.What are the steps in automatic account assignment configuration?

Answer: Material type is assigned to A/c Cat Ref.; A/c Cat. Ref is assigned to Val. Class; Val. class assigned
to G/L A/c. Configuration: OMWM : Activate Val. grouping Code OMSK : Create A/c cat. ref and Val. Class;
then A/c cat ref assigned to material type. OMWD : Val. area (plant) assigned to Val. grp. code (0001) OBYC :
Assign Val. modifier (0001), New Val. Class and G/L A/c Now create new material and assign new val. class in
Accounting 1 data screen. Then create PO, GR.

Q.How do you create movement types? What are the steps involved? When will you recommend a
new movement type?

Answer: Transaction code is OMJJ You can copy new movement type which is near-by old one. When we
go to new movement type, if there is no possibility to done transaction with old movement type. Steps: 1)
entry control data 2) short text 3) allowed transactions 4)help text 5)up date control data 6)account
grouping 7)reasons for movement

Q.What is meant by access sequence? When it is used?

Answer: Condition type has an access sequence assigned to it which determines which tables to access for
data and in what sequence. This has a sequence of table based on the most specific to most generic. It can
be used for any new condition type creation.

Q.How does the PO pick up the pricing schema?

Answer: The pricing procedure assigned to a vendor has a calculation schema attached to it. This schema
defines the various conditions pre-requisite, calculation & sequence in the PO. Generally, only one type of
pricing procedure is followed for all the vendors.
Q.What are the steps involved in creating a pricing procedure?

Answer: To create a pricing procedure, the steps will be Create Condition tables Create access sequence by
placing the different condition tables from most specific to the most general. Create the condition types
Assign the Access sequence to the condition type Create the pricing procedure Place the all condition types
in a sequential order as per the business requirement and pricing needs.

Q.What are the types of special stocks available?

Answer: Consignment stock - vendor Components provided to vendor Project stock Consignment stock
customer Pipeline material Orders on hand

Q.What are the types of info records?

Answer: Standard Pipeline Consignment Subcontracting

Q.What is meant by consignment stock?

Answer: Consignment stock is the material which is lying in the premises but is not owned by the Vendor. It
has no value assigned to it until it is taken into own stock. Once it is used in production or to be sold, it is
taken into own stock.

Q.What are the steps involved in consignment cycle?

Answer: Consignment cycle is similar to a standard purchase cycle. The difference it that no accounting
document is created at the time of goods receipts only qty is updated. It is settled once the same is utilized.

Q.Tell me about the subcontracting cycle.

Answer: When the material is sent for subcontracting i.e. some value addition, it is converted into a
different material. It needs a BOM to define the components of the finished item being received.

Q.How is scrap accounted in subcontracting?

Answer: When the material is sent for subcontracting i.e. some value addition, it is converted into a
different material. It needs a BOM to define the components of the finished item being received. The scrap
or the process loss can be adjusted while doing a quality inspection of the material received after
subcontracting.

Q.How are the byproducts taken care of in subcontracting?

Answer: products can be taken care of by defining them in the BOM.

Q.Tell me about the various movement types and usage.

Answer: 101 GR in unrest. Use 103 GR in Blocked stock 105 Release from Block to Unrest. Use stock. 122
Return to vendor from unrest. Use stock. 124 Return to vendor from blocked stock 301 Plant to Plant
transfer. 309 Material to Material transfer 311 Transfer from stg loc to stg loc 261 Issue for consumption
411 Taking consignment stock into own stock 551 Withdrawal for scrapping
Q.What is meant by scales? Can scales be used in standard purchase order?

Answer: By using scales we can fix the price of a material accordingly, for example, we can fix the material
price. Based on the quantity like For quantity 1 to 100 price is Rs1000 For quantity 101 to 200 price is 900
Like that, you can fix price. A scheduling agreement can be made for Consignment, Subcontracting & stock
transfer. A contract, also known as a blanket PO, can be made for standard items and can be restricted to a
Value or Qty. Based on the calculation schema of that condition & based on access sequence assigned to it.
Condition type in the standard system: Non-deductible input tax = NAVS Depending on the tax code in the
PO item and the tax calculation schema, the system calculates the non-deductible tax portion and inserts it
in the condition type with the category N. The condition type has the calculation rule "absolute amount".
Normally, the access sequence that regulates tax code determination is assigned to the condition type.

Q.What is the difference between a Purchase Requisition and a Purchase Order?

Answer: A PR is an internal document that sends notification to purchase department when some material
is service is required. PR can be generated by department that needs any material or service. A PO is a
document sent to vendor by purchaser which is an official request of mentioned material or services. POs
are generally binding on purchaser, though it depends on terms and conditions mentioned in PO.

Q.What are different Info Records types?

Answer: Different Info Record types are Standard, Consignment, Sub-Contracting and Pipeline.

Q.What is a consignment Stock?

Answer: The stock supplied by the vendor is in the purchasing company’s premises but the company has
no liability for the same. The liability for the company will only arise one the goods are issued from the
consignment stock for use. However, in this case, even before the use, purchasing company can check in
system how much stock is lying in inventory.

Q.What is Sub-Contracting cycle in MM?

Answer: In Sub-contracting, we send raw material or input material to sub-contractor and then receive the
finished goods. A sub-contracting PO is created with item category ‘L’. Input material is sent to vendor for
processing with movement type 541. When GR is done using movement type 101, movement type 543
takes place automatically and takes care of consumed material.

Q.What is meant by Scales in MM?

Answer: When we maintain price in Info Records, we can make use of scales. It is used when price of a
material is dependent on quantity purchased. For eg. For 500 pieces of material ABC, price is Rs. 10,
however, if the order quantity is more than 500, price is Rs. 9. Scales are maintained in various master data
like info record, quota arrangement etc. from where scales can be pulled in a Purchase Order.

Q.How to Flag a material for deletion?

Answer: A material must be flagged for deletion before deleting it using Archive and Delete program. A
deletion flag can be set at client level, plant level or storage location level. Whatever level you flag a
material for deletion, it is flagged for deletion at all corresponding lower levels. Transaction MM06 is used
to flag a material for deletion.
Q.Can a material be used after flagging it for deletion?

Answer: Yes, even after flagging a material for deletion, it can be used till it is actually deleted. It will just
trigger a warning message whenever the material is used. If you want a material to be blocked for any use
with immediate effect, you should use a material status which is there in Basic View 1 for general level or in
MRP 1 view for plant level blocking.

Q.What is the function of OBYC?

Answer: OBYC is t-code used for configuring Automatic Account Posting. Postings are made to G/L
accounts automatically in the case of Inventory Management and Invoice Verification relevant to Financial
and Cost Accounting.

Q.What is valuation grouping code related to OBYC?

Answer: Valuation grouping code is used to group the valuation area, In SAP, we can have valuation level
at Company code level or at plant level. General practice is to use the valuation area at plant level, because
valuation may differ from one plant to another. The valuation grouping code makes it easier to set
automatic account determination. If we need to define common account determination for several
valuation areas, we can assign same valuation grouping code to all those valuation areas. We can maintain
the valuation group code in OMWD for various valuation areas.

Q.What types of special stocks are available?

Answer: Various special stock types available in SAP are Consignment, Subcontracting, pipeline, project,
sales order stock, Returnable transport packaging, stock transfer, and the third party.

Q.What is the difference between Contracts and Scheduling Agreements?

Answer: A contract is a pre-determined long term agreement to supply material or service for a certain
period of time. Specific delivery dates are not mentioned in the contracts. Contracts can be of two types:
Value Contract or Quantity contract In Scheduling agreements, we can enter scheduling lines which gives
details of quantity that should be delivered on specific date. Plant must be entered in SA so that materials
can be delivered at plant. These are generally used for materials whose requirements are predictable.

Q.How can we create new transaction codes in SAP?

Answer: New transaction codes can be created using t-code SE93.

Q.What are release procedures with and without classification?

Answer: Release Strategy with Classification: PR can be released at header level as well as item level. It can
be used for both internal/external documents. Can be set on any field available in structure CEBAN Release
Strategy without Classification: PR can be released only at item level. It can be used only for internal
documents such as PR. This strategy can be used only on 4 parameters which are Account assignment
category, Plant, Material Group and value of PR.

Q.What is meant by batches?

Answer: A batch is a subset of the total stock of a material. It represents a homogeneous unit which has
unique specification. Normally, a batch is assigned to the quantity of material produced during a given
production run. A batch number uniqueness can be assigned at any of the following 3 levels: At client level:
The same batch number can be assigned only once within the entire client. At material and plant
combination level: Same batch number can be assigned to material with different specification in each
plant. At material number level: A batch assigned to a material has the same specification for all plants
where material is extended. Batch number can be reassigned with a different specification for each material.
Q.How to handle free items in PO?

Answer: While creating PO, we can tick the item as free item in item overview section of PO. The price will
be zero for free marked item.

Q.What information is maintained in Accounting View of material master?

Answer: Accounting view is a plant specific view. Besides other information, it contains important
information such as valuation class and price control. Valuation class helps in determining the relevant GL
account used for account posting. It is also used while configuring OBYC settings. Price control indicator
determines if material is maintained at Standard price(S) or Moving average price (V).

Q.What is the use of Material types?

Answer: ‘Material Types’ is used to group various materials based on some common properties. It helps in
maintain material master data for a particular material. Using material types, we can control which all views
are required for a material type, which fields are required or optional, the material number range etc.

Q.What is the use of ‘Partner Functions’ for a vendor?

Answer: Partner Function is used to define responsibilities and duties of other business partners. Some
partner functions are AZ(Alternate payee), CR(Carrier), OA(Ordering address), GS(Goods supplier), PI(Invoice
presented by) etc.

Q.What is the use of ‘Material Status’?

Answer: Material Status helps in determining the usability of a material. It is a 2-digit code which can be
maintained as plant specific material status, cross-plant material status, and distribution material status.

Q.What is the ‘Price Control Indicator’?

Answer: ‘Price Control Indicator’ is maintained in accounting view and is used to determine how a material
will be valuated. It can be Standard Price(S) or Moving Average Price(V). If the indicator is set to S, all
inventory postings are posted at standard price maintained in material master. If there are variances in any
transaction due to different price, the variance is posted in price difference account. If price control
indicator is set at V, goods received will be done at GR price. The moving average price will be adjusted in
material master using weighted average formula. If goods movements or invoice receipts are posted using
a price that differs from the moving average price, the differences are posted to the stock account.

Q.What are various types of Stock transfer?

Answer: The physical movement of stock between different physical locations is called as ‘Stock transfer’.
Stock transfer can be either a single step process or a two-step process. Various Stock transfers are: Inter
Company (Company to Company) Inter Plant/Intra Company (Plant to Plant) Intra Plant (Storage location to
Storage location)

Q.What are various Stock Types?

Answer: In SAP, commonly used stock types are: Unrestricted Stock (Stock that is available for use)
Restricted Stock Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)
Blocked Stock (Stock rejected by quality or production) GR Blocked Stock (Conditionally accepted stock.
Not the unrestricted stock)

Q.What are various procedures for counting Physical Inventory?

Answer: Physical Inventory procedures in SAP MM are as follows: Periodic Inventory (All stocks are
counted on a pre-determined date) Continuous Inventory (stocks are counted continuously during the
entire fiscal year) Cycle Counting (Counting is done at fixed intervals) Inventory Sampling (Randomly
selected material stocks are physically counted on the balance sheet key date. If variances are small enough,
it is presumed that the book inventory balances for the other stocks are correct.)

Q.What are the various functions /features in Purchasing?

Answer: The purchasing view consists of RFQ / Quotation, Purchase Requisition (PR), Purchase Order (PO),
Master Data that has several fields like info record, source list, conditions, vendors etc. and finally Outline
Agreements.

Q.What are the different kinds of special stocks available?

Answer: Special stocks available are consignment stocks (from vendor), subcontracting stocks (to sun-
contractor), project stocks, pipeline materials, sales order stocks, stock transfer and third party.

Q.How do you create a pricing procedure?

Answer: The steps involved in creating a pricing procedure are: 1. Create condition tables 2. Create access
sequence according to the various condition tables 3. Create condition types 4. Assign access sequence to
condition type 5. Create the pricing procedure 6. List down all the condition types in order so as to suit the
business and pricing requirements

Q.How does the consignment cycle operate?

Answer: The various steps in consignment cycle are: 1. Create consignment info record with proper tax
code 2. Create Purchase order with item category K 3. Create output condition record for KONS (output
type) 4. Authorize Goods Receipt (GR) 5. Payment is settled through MRKO transaction even if invoice
verification is not done

Q.What are the kinds of info records available?

Answer: Standard, consignment, subcontracting and pipeline

Q.What is the difference between a contract and scheduling agreement?

Answer: While a scheduling agreement is for consignment, subcontracting and stock transfer, a contract is
for Standard items and can be limited to a certain quantity or value. A contract can be created centrally with
different pricing conditions for every plant whereas a scheduling agreement needs to be created at that
particular plant location. In a contract, only time-dependent conditions can be created whereas in a
scheduling agreement, you can have time-dependent or time-independent conditions subject to the
customizations in the document type.

Q.What is MRP? And how is Lot Size used?

Answer: MRP is short for Materials Requirements Planning and it is a production planning technique that’s
used to manage the manufacturing process. It is basically used to determine your Material Planning
procedure by specifying the various conditions like Reorder Point, Seasonal Requirement, Replenishment,
Vendor Managed, Forecast Based and Master Production Scheduling (MPS). Lot size specifies the nature of
material requirement in terms of Weekly, Monthly, Quantity and Maximum Replenishment.

Q.What are batches and how are they searched?

Answer: A batch is a collection of similar items from your stock that have the same characteristics. For
example, all food items produced on a particular day belong to one batch. Batches are searched using the
standard facility (match code, key F4) based on the batch names or other properties that distinguish them
from others.
Q.How is shelf life managed in SAP? Explain the full-cycle.

Answer: In SAP, there are basically two types of shelf-life: 1. Total Shelf Life – In case the total shelf life is
maintained, then it’s mandatory to enter the minimum shelf life also. During the process of Goods Receipt
(GR), the user will have to enter the manufactured date of the item so that the expiry date is automatically
calculated by the system. 2. Minimum Shelf Life – The date of minimum durability of the item are specified
by using date markings like ‘use-by’ or ‘best-before’. During the process of Goods Receipt (GR), the user will
have to enter the date of GR so that the system can check if the material is usable according to the
requirements in material master. If the minimum remaining shelf life condition is not satisfied, then the
system will not accept the goods receipt.

Q.What is a release strategy? What are release groups and codes?

Answer: The procurement process in SAP needs to be controlled by introducing authorizations at

important stages. This is taken care by the release strategy, which has different codes for assigned users. For
example, if the value of a PO is more than a certain pre-defined limit, then it has to be approved by the
SCM manager with a certain release code. Every company will have different approval mechanisms and the
release strategy can be defined by the users. Release groups are a set of release codes that are used for
authorizing a purchasing document or approving a release strategy. Release code is a 2-character ID that
allows a person to approve or clear a PR or a PO and they are controlled by a step-by-step authorization
system. For example, Code 10 is assigned to the person who creates the PO, Code 20 is the release code
assigned to the Purchase manager for approval. Subsequently, the Department Head will use Code 30 to
approve the release strategy, followed by the Operations Director, who will use Code 40 for final approval.

Q.What is a GR blocked stock and when is it used?

Answer: The GR blocked stock is an option used in the goods receipt process when you are not sure about
the quality of the goods received. In such a case, the stock is maintained as GR blocked either from a
material viewpoint or exclusively for a purchase order item.

Q.EXPLAIN BATCH MANAGEMENT?

Answer: The reason for Batch Management are 1.Defect tracking, 2.Call back activities used for hazardous
materials, chemicals & pharma. Batch levels : 1.Plant 2.Material 3.Client SAP recommends plant level
in SPRO We have to set characteristics ie. Properties class type: -022 at plant level, -023 at client level We
can use split valuation for batches if the value based IM. The Batch No. is valuation type To indicate whether
a batch is usable or not In customizing we can activate batch status management Level AUTO à client (or)
Material MANUAL à Plant (selected) Status Unrestricted can be used & Restricted cannot be used. SLED =
Total shelf life + Production Date in GR If no data in Material Master we have to enter at GR.
 SAP MM Interview Questions and Answers For
Experienced

Q1. What is the difference between a Purchase Requisition and a Purchase

Order?

Ans: A PR is an internal document that sends  notification to purchase department when

some material is service is required. PR can be generated by department that needs any material
or service.

A PO is a document sent to vendor by purchaser which is an official request of mentioned material

or services. POs are generally binding on purchaser, though it depends on terms and conditions
mentioned in PO.

Q2. What MRP procedures are available in MM-CBP (Consumption Based

Planning)?

Ans: Various material planning methods are used in MRP (Material Requirements Planning).
Reorder point procedure (VM) Forecast-based planning (VV) Time-Phased materials planning
(PD) These are specified in material creation (MM01) under the MRP 1 tab.

Q3. Can you change a Purchase Requisition after it has been created?

Ans: Yes. Use Transaction ME52N. Check to see if the PR has already had a PO issued against
it. If so, you must inform the Purchasing Group. Check if the PR has been approved. If so, you
may only make changes to a limited extent and may be subject of approval. Check if the PR was
created by MRP. In this case, you don’t have much control over the modification process. All
changes to items are logged and stored. Information stored includes when the information was
changed, who changed it, what the changes were, etc.

Q4. How do we create Consignment Stocks?

Ans: Everything is the same as a normal PR or PO, except: Enter the item category “K” for the
consignment item. This ensures that the Goods Receipt is posted to the consignment stores and
an invoice receipt cannot be generated for the item. Also, do not enter a net price.

Q5. What is Vendor Evaluation and how do you maintain it?

Ans: Vendor Evaluation helps you select the Source of Supply by a score assigned to a particular
vendor. The scores are on a scale of 1 to 100 and are based on differing criteria. Use Transaction
ME61 and enter the Purchasing Organization and Vendor Number.
Q6. What are the components of the Master Data that details a company’s
procurement; used by, Vendor Evaluation for example?

Ans: The key components of Master Data are: Info Record (ME11), Source List (ME01), Quota
Arrangement (MEQ1), Vendor (MK01), Vendor Evaluation (ME61), and Condition Type (MEKA).

Q7. How do we get a proper list of vendors to send an RFQ?

Ans: Either use the Information Record to see who has sold a particular material to the
organization in the past, or go through the Source List.

Q8. How do you create a Source List?

Ans: Use Transaction ME01. Enter the Material Number and the Plant Data. Enter source list
records, validity period, period of time material is procurable, Vendor Number, responsible
Purchasing Organization (or number of the Agreement or Contract), PPL (if the material can be
procured from another plant), Fixed Source (?), MRP control. Also, a check should be done to see
whether any source list records overlap.

Q9. What are different Info Records types?

Ans: Different Info Record types are Standard, Consignment, Sub-Contracting and Pipeline.

Q10. Under what conditions are “planned orders” created? What may planned
orders be converted to and how is that conversion accomplished?

Ans: Planned orders are always created when the system creates an internal procurement
proposal. In the case of vendor procurement, the MRP Controller may create a planned order or
directly create a PR. The next step for a planned order is to be converted to a PR so it goes to
purchasing and is to eventually become a PO. A planned order can be converted to a PR using
transaction code MD14.

Q11. What is a consignment Stock?

Ans: The stock supplied by the vendor is in the purchasing company’s premises but the company
has no liability for the same. The liability for the company will only arise one the goods are issued
from the consignment stock for use. However, in this case, even before the use, purchasing
company can check in system how much stock is lying in inventory.

Q12. What is Sub-Contracting cycle in MM?

Ans: In Sub-contracting, we send raw material or input material to sub-contractor and then receive
the finished goods. A sub-contracting PO is created with item category ‘L’. Input material is sent to
vendor for processing with movement type 541. When GR is done using movement type 101,
movement type 543 takes place automatically and takes care of consumed material.
Q13. What is meant by Scales in MM?

Ans: When we maintain price in Info Records, we can make use of scales. It is used when price of
a material is dependent on quantity purchased. For eg. For 500 pieces of material ABC, price is
Rs. 10, however, if the order quantity is more than 500, price is Rs. 9. Scales are maintained in
various master data like info record, quota arrangement etc. from where scales can be pulled in a
Purchase Order.

Q14. How to Flag a material for deletion?

Ans: A material must be flagged for deletion before deleting it using Archive and Delete program.
A deletion flag can be set at client level, plant level or storage location level. Whatever level you
flag a material for deletion, it is flagged for deletion at all corresponding lower levels. Transaction
MM06 is used to flag a material for deletion.

Q15. Can a material be used after flagging it for deletion?

Yes, even after flagging a material for deletion, it can be used till it is actually deleted. It will just
trigger a warning message whenever the material is used. If you want a material to be blocked for
any use with immediate effect, you should use a material status which is there in Basic View 1 for
general level or in MRP 1 view for plant level blocking.

Q16. What is the function of OBYC?

Ans: OBYC is t-code used for configuring Automatic Account Posting.

Postings are made to G/L accounts automatically in the case of Inventory Management and
Invoice Verification relevant to Financial and Cost Accounting.

Q17. What is valuation grouping code related to OBYC?

Ans: Valuation grouping code is used to group the valuation area, In SAP, we can
have valuation level at Company code level or at plant level.

General practice is to use the valuation area at plant level, because valuation may differ from one
plant to another. The valuation grouping code makes it easier to set automatic account
determination. If we need to define common account determination for several valuation areas, we
can assign same valuation grouping code to all those valuation areas. We can maintain the
valuation group code in OMWD for various valuation areas.

Q18. What types of special stocks are available?

Ans: pecial stock types available in SAP are Consignment, Subcontracting, pipeline, project, sales
order stock, Returnable transport packaging, stock transfer, and the third party.
Q19. What is the difference between Contracts and Scheduling Agreements?

Ans: A contract is a pre-determined long term agreement to supply material or service for a
certain period of time. Specific delivery dates are not mentioned in the contracts. Contracts can be
of two types: Value Contract or Quantity contract

In Scheduling agreements, we can enter scheduling lines which gives details of quantity that
should be delivered on specific date. Plant must be entered in SA so that materials can be
delivered at plant. These are generally used for materials whose requirements are predictable.

Q20. How can we create new transaction codes in SAP?

Ans: New transaction codes can be created using t-code SE93.

Q21. What are release procedures with and without classification?

Ans:

Release Strategy with Classification:

• PR can be released at header level as well as item level.

• It can be used for both internal/external documents.
• Can be set on any field available in structure CEBAN

Release Strategy without Classification:

• PR can be released only at item level.

• It can be used only for internal documents such as PR.
• This strategy can be used only on 4 parameters which are Account assignment category, Plant,
Material Group and value of PR.

Q22. What is meant by batches?

Ans: A batch is a subset of the total stock of a material. It represents a homogeneous unit which
has unique specification. Normally, a batch is assigned to the quantity of material produced during
a given production run. A batch number uniqueness can be assigned at any of the following 3
levels:

At client level: The same batch number can be assigned only once within the entire client.

At material and plant combination level: Same batch number can be assigned to material with
different specification in each plant.

At material number level: A batch assigned to a material has the same specification for all plants
where material is extended. Batch number can be reassigned with a different specification for
each material.
Q23. How to handle free items in PO?

Ans: While creating PO, we can tick the item as free item in item overview section of PO. The
price will be zero for free marked item.

Q24. What information is maintained in Accounting View of material master?

Ans: Accounting view is a plant specific view. Besides other information, it contains important
information such as valuation class and price control. Valuation class helps in determining the
relevant GL account used for account posting. It is also used while configuring OBYC settings.
Price control indicator determines if material is maintained at Standard price(S) or Moving average
price (V).

Q25. What is the use of Material types?

Ans: ‘Material Types’ is used to group various materials based on some common properties. It
helps in maintain material master data for a particular material. Using material types, we can
control which all views are required for a material type, which fields are required or optional, the
material number range etc.

Q26. If you have a multi-lineitem PO, can you release the PO item by item?

Ans: No, a PO is released at the header level meaning a total release or “With Classification”.
PRs, on the other hand, have two release procedures possible. “With Classification” as described
above, and “Without Classification” where it is only possible to release the PR item by item

Q27. What is a Material Type?

Ans: A Material Type describes the characteristics of a material that are important in regards to
Accounting and Inventory Management. A material is assigned a type when you create the
material master record. “Raw Materials”, “Finished Products”, and “Semi-Finished Products” are
examples. In the standard MM module, the Material Type of ROH denotes an externally procured
material, and FERT indicates that the relevant material is produced in-house.

Q28. What is a price comparison?

Ans: Perform a price comparison using ME49 and one may compare quotations from different
vendors.

Q29. What is a Source List?

Ans: The Source List identifies preferred sources of supply for certain materials. If it’s been
maintained, it will ID both the source of supply and the time period. The Source List facilitates
gaining a fixed source of supply, blocked source of supply, and/or helps us to select the proffered
source during the source determination process.
Q30.What are the various “steps” in the MM Cycle from material creation through
invoice?

Ans: The following creates a rough picture of the MM Cycle. Create material, create vendor,
assign material to vendor, procure raw material through PR, locate vendor for certain material,
processing GR, goods issue, and invoice verification.

Q31. Give some examples of the information relating to a material’s

storage/warehousing?

Ans: Some examples are Unit of Issue, Storage Conditions, Packaging Dimensions, Gross
Weight, Volume, and Hazardous Materials Number. Also, there are various Storage Strategies
information and options.

Q32. What are the various features of Consignment Stocks?

Ans: Consignment Stocks remain the legal property of the Vendor until the organization withdraws
the material from the consignment stores. The invoice can be due at set periods of time, for
example monthly, and it is also a configuration possibility that the organization will take ownership
of the stock after a certain period of time. Consignment Stock is allocated to the available stock
because the Consignment Stock is managed under the same material number as your company’s
stock. The most important characteristic of Consignment Stock is that it isn’t valuated. When the
material is withdrawn, it is valuated at the price of the respective vendor. Before procuring the
stock, consideration should be given if one consignment is coming from multiple vendors. If so, we
can manage all of them independently at the price of the individual vendors.

Q33. What is a Quotation?

Ans: Once a vendor has received an RFQ, the vendor will send back a quote that will be legally
binding for a certain period of time. Specifically, a Quotation is an offer by a vendor to a
purchasing organization regarding the supply of material(s) or performance of service(s) subject to
specified conditions.

Q34. What is the Source List?

Ans: The Source List identifies preferred sources of supply for certain materials. If the Source List
has been properly maintained, it will identify both the source of a material and the period of time in
which you can order the material from the source.

Q35. What is an Invoice Verification?

Ans: The Invoice Verification component completes the material procurement process and allows
credit memos to be processed. Invoice Verification includes entering invoices and credit memos
that have been received, checking accuracy of invoices with respect to price and arithmetic, and
checking block invoices (these are the ones which differ too much from the original PO).
Q36. What are the different types of Invoice Verification?

Ans: Invoices based on Purchase Orders. With purchase-order-based Invoice Verification, all of
the items of a purchase order can be settled together, regardless of whether or not an item has
been received in several partial deliveries. All of the deliveries are totaled and posted as one item.
Invoices based on Goods Receipts. With goods receipt-based Invoice Verification, each individual
goods receipt is invoiced separately. Invoices without an order reference. When there is no
reference to a PO, it is possible to post the transaction directly to a Material Account, a G/L
Account, or an Asset Account. You can park Invoices that reference POs and GRs as well as
Invoices with no reference in the system. When you park a document or change a parked
document, neither substitution nor validation is supported.

Q37. Why would an organization need to allow Negative Stocks?

Ans: Negative Stocks are necessary when Goods Issues are entered necessarily (business
process reasons) prior to the corresponding Goods Receipts and the material is already located
physically in the warehouse.

Q38. What is the use of ‘Partner Functions’ for a vendor?

Ans: Partner Function is used to define responsibilities and duties of other business partners.
Some partner functions are AZ(Alternate payee), CR(Carrier), OA(Ordering address), GS(Goods
supplier), PI(Invoice presented by) etc.

Q39. What is the use of ‘Material Status’?

Ans: Material Status helps in determining the usability of a material. It is a 2-digit code which can
be maintained as plant specific material status, cross-plant material status, and distribution
material status.

Q40. What is the ‘Price Control Indicator’?

Ans: Price Control Indicator’ is maintained in accounting view and is used to determine how a
material will be valuated. It can be Standard Price(S) or Moving Average Price(V). If the indicator
is set to S, all inventory postings are posted at standard price maintained in material master. If
there are variances in any transaction due to different price, the variance is posted in price
difference account.

If price control indicator is set at V, goods received will be done at GR price. The moving average
price will be adjusted in material master using weighted average formula. If goods movements or
invoice receipts are posted using a price that differs from the moving average price, the
differences are posted to the stock account.
Q41. What are various types of Stock transfer?

Ans: The physical movement of stock between different physical locations is called as ‘Stock
transfer’. Stock transfer can be either a single step process or a two-step process.

Various Stock transfers are:

• Inter Company (Company to Company)

• Inter Plant/Intra Company (Plant to Plant)
• Intra Plant (Storage location to Storage location)

Q42. What are various Stock Types?

Ans: In SAP, commonly used stock types are:

• Unrestricted Stock (Stock that is available for use)

• Restricted Stock
• Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)
• Blocked Stock (Stock rejected by quality or production)
• GR Blocked Stock (Conditionally accepted stock. Not the unrestricted stock)

Q43. What are various procedures for counting Physical Inventory?

Ans: Physical Inventory procedures in SAP MM are as follows:

• Periodic Inventory (All stocks are counted on a pre-determined date)

• Continuous Inventory (stocks are counted continuously during the entire fiscal year)
• Cycle Counting (Counting is done at fixed intervals)
• Inventory Sampling (Randomly selected material stocks are physically counted on the balance
sheet key date. If variances are small enough, it is presumed that the book inventory balances for
the other stocks are correct.)

Q44. What is the use of ‘Split Valuation’?

Ans: Within a valuation area, sometimes, we need to valuate various stocks of a

material separately. It can be because of different origin, quality, status, etc. We use
split valuation in such cases. In this case, material is managed at several partial stocks
which are sub-stocks of main material stock. Any transaction, relevant for valuation, is
carried at this partial stock level. In accounting view, we define if we need split valuation
for any material.
Q45. What are the various stock valuation methods?

Ans: Stock revaluation can be done by following three methods:

• LIFO(Last In First Out): Materials received last are consumed first. You can assume example of
elevator where people who enter last exit first!
• FIFO(First In Firs Out): Materials received first are consumed first.
• Lowest Value Method: Stocks are valued at their original price or the current market price whichever
is lower.

Q46. What are the organizational levels of the Enterprise Structure in R/3?

Ans: The top level of the organizational plan is the Client, followed by Company Code, which
represents a unit with its own accounting, balance, P&L, and possibly identity (subsidiary). The
next level down is Plant, an operational unit within a company (HQ, Assembly Plant, Call Center,
etc.). The Purchasing Organization is the legally responsibly group for external transactions. This
group is further subdivided into Purchasing Groups.

Q47. How do you set ‘Automatic Account Assignment’ in MM?

Ans: Once OBYC settings are properly done, system finds the correct G/L account using the
following data:

Chart of Accounts: Chart of Accounts is determined based on plant or company code used in
transaction

Valuation Grouping Code: It is determined based on the valuation area. Valuation Grouping Code
is maintained in t-code OMWD.

Transaction Key: eg. BSX, GBB etc. Transaction keys are determined automatically from the
transaction (invoice verification) or the movement type (inventory management).

Account grouping /Account Modifier (only for offsetting entries, consignment liabilities, and price
differences)

Valuation class of material or (in case of split valuation) the valuation type: The valuation class
allows you to define automatic account determination that is dependent on the material. This can
be achieved by assigning different valuation classes to the materials in material master
(Accounting view) and by assigning different G/L accounts to the posting transaction for every
valuation class.
Q48. What is ‘Transaction Keys’ while setting OBYC?

Ans: Since each movement type is assigned to a ‘value string’ which in turn is identified with a
transaction key, the goods movement determines the correct transaction key. Transaction Keys’
are pre-defined in the system to enable transaction postings in Inventory Management and
Accounting (Invoice Verification).

Examples of pre-defined transaction keys are:

• BSX (Inventory Postings)

• WRX (GR/IR Clearing Postings)
• PRD (Cost/Price differences)
• UMB (Revenue/Expenses from revaluation)
• GBB (Offsetting entries in Stock postings)
• BSX, WRX, and PRD are relevant for a GR with reference to a purchase order for a material with
standard price control. The transaction key UMB is used when the standard price has changed and
the movement is posted to a previous period. GBB is used to identify the GL account to post to as
the offsetting entry to the stock account (when not referencing a purchase order) such as
miscellaneous goods receipts, goods issues for sales orders with no account assignment, and
scrapping etc.

Q49. What is a Business Area?

Ans: The business area is an organizational unit within financial accounting. It corresponds to a
defined business segment or area of responsibility, to which value movements recorded in
Financial Accounting can be assigned. It is usually derived automatically as it linked to other
organizational units. For eg. Business area for a combination of plant and division is maintained by
t-code OMJ7.

Q50. What is a Cost Center?

Ans: Cost Center accounting is used for controlling purposes. It is an organizational unit within a
controlling area which represents a defined location of cost incurrence. For example, any
department can be a cost center for recording all expenses incurred for that department.

Q51. What is a Profit Center?

Ans: Profit Center Accounting evaluates the profit or loss of individual, independent areas within
an organization. Profit center is an organizational unit in controlling to recognize your profit. Profit
center is attached to material master at plant level.
Q52. How to create Tax calculation procedure in MM?

Ans: Tax can be calculated for each line item of a PO separately based on the tax code. Earlier
TAXINJ, which is a formula based tax procedure, was used. Now, TAXINN, which is a condition
based tax procedure, is generally used. Tax procedure contains the condition type and necessary
specification for each condition type. Account keys are assigned to condition types and these
account keys determine the G/L to which the tax amount is to be posted(OB40). These account
keys are maintained using t-code OBCN. (All these transactions are under Financial Accounting
Global Settings Tax on Sales/Purchases Basic Settings). Tax codes are assigned to country
codes and country are linked with tax procedure. Thus, based on tax code, corresponding tax
procedure is determined and then calculation is done based on condition types in that tax
procedure.

Q53. How is scrap material taken care of in sub-contracting?

Ans: Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or Co-
Product. Common practice is to maintain scrap as by-product and receive it back along with
processed material.

Q54. How are the by-products taken care of in sub-contracting?

Ans: When you create BOM using CS01, we can maintain main components with + ve quantities
and By Products / Scraps with – ve quantities.

When you make Goods Receipt for Subcontracting Purchase Order with 101 movement type,
components are automatically consumed with movement type 543 By Products / Scrap are
updated as stock provided to vendor movement type 545. Now we can receive this scrap/ By
product back in company’s inventory using movement type 542 (reversal of 541) with t-code
MB1B.

Q55. What are the commonly used movement types in Sub-Contracting

process?

Ans:

• 541 – Issues of goods from warehouse to subcontractoru2019s stock

• 542 – Reversals of goods issues from warehouse to subcontractoru2019s stock
• 543 – Consumption from subcontracting stock (Automatic updating during GR)
• 544- Co-products receiving
• 545- Goods receipt of by-products from subcontracting (Stock provided to vendor)
• 101 – Finished good/ Sub-Contracted good received after processing
Q56. What are accounting entries in standard sub-contracting process?

Ans: Accounting entries in standard sub-contracting process are as follows:

• For finished goods received:

• Debit stock account of assembly(FG) (BSX)
• Credit Change in Stock (BSV)
• For amount payable to vendor:
• Debit SC/JW charges (FRL)
• Credit GR/IR (WRX)
• For material provided to vendor:
• Debit Consumption Account of components (GBB-VBO)
• Credit Stock account of components (BSX)
• If there is a price difference and customization is done for accounting for price difference in
subcontracting, PRD transaction key comes in picture.

Q57. What are the possible values of procurement type in Material Master?

Ans: Procurement type is maintained in MRP1 view of material master. This is a plant specific
view as MRP is done at plant level. Various procurement types in material master are as follows:

• In-house production (E)

• External procurement (F)
• No procurement
• Both Procurement types (X)

Q58. What are the requirements for an ‘MRP Run’?

Ans:

• MRP should be activated in that plant

• Master Data for MRP should be maintained (Planning Calendar etc.)
• MRP data for material should be maintained
• MRP1 view should be maintained (e.g.. Reorder point, Safety stock etc.)
• MRP2 view should be maintained (e.g.. Plan delivery time etc.)
• MRP can be run using MD03

Q59. What is a MRP Area?

Ans: MRP Area is an organizational unit for which material requirement planning can be carried
out independently. MRP Areas are of three types:

1. Plant MRP Area

2. MRP Areas for Storage Locations
3. MRP Areas for Subcontractors

After defining MRP areas, MRP area is assigned to material in material master.
Q60. What is MRP list?

Ans: The system creates MRP lists during the planning run. The MRP list always displays the
future stock/requirements situation at the time of the last planning run. The MRP list is stored in
the system until it is either deleted manually or replaced by a new list from a subsequent planning
run.

Q61. How will items be returned to the vendor?

Ans: When you are posting a Goods Receipt for a PO, you can also enter items that you want to
return to the vendor. To do this, you no longer have to reference the purchase order with which the
goods were originally delivered. From the item overview, choose 161 (Return for PO) as the
default value for the Movement Type. Enter the data for the return item(s) and post the document.

Q62. Where do you perform a Goods Issue?

Ans: Use Transaction MIGO. It is possible that when MIGO is accessed that a different document
screen appears than the one required. This occurs because SAP remembers the last Goods
Movement transaction accessed per user login. To reach the Goods Issue Purchase Order
screen, click the Dropdown Icon in the transaction field and select “Goods Issue”.

Q63. How do you perform a Goods Issue?

Ans: Use Transaction MIGO. On the initial screen, enter the header data (you need not enter the
Movement Type or the Plant as these are automatically copied from the order). Choose Goods
Issue Æ Create with Reference Æ To Order… If you know the order number, enter it directly.
Using the By-products Indicator, you can simultaneously post the Goods Receipt of planned by-
products. Using the Choose transaction/events indicator, you can display all transactions/events
for an order and choose the transaction/events for which you want to post a Goods Issue. Copy
the desired item(s). Check data on the overview screen. Post the document.

Q64. How do you perform an Invoice Verification?

Ans: If the Invoice refers to an existing document (PO, etc.), then the system pulls up all of the
relevant information like Vendor, Material, Quantity, Terms of Delivery, and Payment Terms etc.
When the Invoice is entered, the system will find the relevant account. Automatic posting for Sales
Tax, Cash Discount, Corrections etc. When the Invoice is posted, certain data such as Average
Price of Material and Price History are updated. Use Transaction MIRO.

Q65. How do you display parked documents?

Ans: There are two possible transactions to use here. They are FB03 and FBV3. The first
shows all posted document types. This is the best choice if you think the document has
been posted to you actual balance. The later shows only parked documents that have not
yet posted to your expenditure balance. These documents are still encumbrances. It is the
best choice if you are trying to find which documents are still awaiting completion or
approval. This transaction is very similar to the FBV2 transaction used with P-Card
reconciliation and marking parked documents complete.
Q66. What do the W, V, and F fields show about the status of a document in
FBV3?

Ans: An X under the W column means the document is subject to Workflow. Most documents on
this screen should have an X in this column. However, not all documents are subject to workflow
(cash deposits etc.). An X in the V column means that the document has been marked as
complete. If they are subject to Workflow, they have been sent to Workflow for approval when they
were marked complete. An X in the F column means that the document has been approved and
posted to expenditures. This column will always be empty in this screen. An X under W, but no X
under V means that you have not marked the document as complete. If it hasn’t been marked as
complete, use FBV2 to check the document and, if it is correct, mark it as complete.

Q67. What MRP procedures in Consumption Based Planning?

Ans: MRP procedures in CBP are as follows:

• Reorder Point Procedure

• Forecast based Planning
• Time phased material planning

Q68. What is the difference between standard purchasing organization and

reference purchasing organization?

Ans: Purchasing organization is an organizational unit within Logistics. A standard purchasing

organization must be provided to one or more plants for which it is directly responsible for
procurements.

A purchasing organization is assigned to reference purchase organization to avail conditions and

centrally agreed contracts or release orders contained in the assigned reference purchasing
organization

Q69. Why do we use document types in SAP?

Ans: Document types are used to distinguish the business transactions to be posted. It also helps
in determining the account types to be posted and subsequent transactions to complete the
process. Document types are defined at client level.

Q70. Can we receive the goods before the scheduled delivery date in scheduling
agreement?

Ans: No, we cannot receive the goods before scheduled delivery date. GR can be posted on or
after the scheduled dates. Though, SAP has provided some OSS notes to resolve this. (708973,
741385)

Q71. Can changes be made in PO once it is released?

Ans: This can be controlled by settings given in release indicator in PO release procedure. If it is a
significant change, it will re-trigger approval cycle.
Q72. What is the use of ‘Info Update’ indicator in purchasing documents?

Ans: This indicator is used to decide if the info record is to be created/updated or not based on
this purchasing document.

Q73. What is a Material Ledger?

Ans: A material ledger retains all transactions that relate to the purchase and use of materials for
producing goods. Material ledger data is valuation and control data for a material in a plant for a
specific posting period. Material ledger contains data for material movements that are relevant to
the valuation of the material.

Q74. What is a ‘Return Delivery’?

Ans: Return Delivery is used if we want to return goods to a vendor for any reason such as bad
quality, or bad packaging etc. In normal cases, return delivery is done by movement type 122. For
creating return delivery, reason for return is a mandatory field.

Q75. How to deactivate a vendor so that it cannot be used for further

transactions?

Ans: A vendor can be blocked at various levels as follows:

• All Company Code

• Single Company Code
• All Purchasing Organization
• Single Purchasing Organization

Q76. What is EAN?

Ans: An article can be carried in different units of measure. An European article number (EAN) is
created as a unique indicator for each of these units of measure. The most important use of EANs
within a company is to identify articles at the point of sale (POS) using the barcode.

Q77. What are basic tables used for Material Master?

Ans: Some of the basic tables used in Material master are:

• MAKT: Material Descriptions

• MARA: General Material Data
• MARD: Storage Location Data for Material
• MVER: Material Consumption
• MARC: Plant Data for Material
• MVKE: Sales Data for Material
• MAST: Material to BOM lin
Q78. What are the different ways to organize purchasing organizations?

Ans: A Purchasing Organization may be responsible for multiple plants and this is referred to as
“Distributed Purchasing”. On the other hand, “Centralized Purchasing” features one Purchasing
Organization per Plant. A Purchasing Organization doesn’t necessarily need to be assigned to a
Company Code. This would enable procurement for every company code as long as buyers are
acting for an individual Plant, and that Plant is assigned to the Purchasing Organization. Hence, a
plant may be assigned to more than one Purchasing Organization.

Q79. What are “Special StAns: ocks”?

Ans: Special Stocks are stocks that are accounted for but are not owned by the client, or are not
stored at a regular facility. Consignment, sales order, and project stock are examples.

Q80. What are some of the options available to transfer materials from one plant
to another?

Ans: Although it is possible to transfer materials from one plant to another without a Stock
Transport Order, many advantages are lost including entering a vendor number, planning a goods
receipt in the receiving plant, monitoring process from PO history, and the ability to create STO
directly from a MRP PR.

Q81. What are some of the common Stock Transport Order Movement Types?

Ans: One step transfers of materials can be posted using MT 301. Other various transport
scenarios differ in the MTs by the Goods Issues and Good Receipts. Common Goods Issues may
use MTs 303, 351, 641, or 643 in the STO. A STOs Good Receipt often uses MT 101.

Q82. What is the difference between a Purchase Order and a Purchase

Requisition?

Ans: A Purchase Requisition is a document type that gives notification of a need for materials or
services. A Purchase Order is a document type that is a formal request for materials or services
from an outside vendor or plant. Procurement types may be defined at the line item and can be
standard, subcontracting, consignment, stock transfer, or an external service.

Q83. What is an “indirectly created” Purchase Requisition?

Ans: An indirectly created Purchase Requisition has been initiated by CBP, the PS Project
System, PM Maintenance, and Service Management, or PP Production Planning and Control. The
“directly created” Purchase Requisition, on the other hand, is created by a person manually in the
requesting department specifying what materials/services, units, and a delivery date.
Q84. What is an RFQ and how is it different from the Quotation Form?

Ans: A RFQ is a purchasing document and an invitation to a vender(s) for quotation regarding
needed materials or services. If multiple an RFQ is sent to multiple vendors, the system can
automatically determine the best quote and send rejection letters in response to all others. The
RFQ and the Quotation Form are one in the same in the system as vendor’s quotes are entered
directly in the RFQ.

Q85. What are the transactions that will result in a change of stock?

Ans: A Goods Receipt is a posting acknowledging the arrival of materials from a vendor or
production, which results in an increase in warehouse stock, a Goods Issue which results in a
reduction in stock, or a Stock Transfer moving materials from one location to another.

Q86. When would it be prudent to post goods movements via the Shipping
Application?

Ans: If picking, packing, and transportation operations need to be planned in detail. Also, in
shipping, you can manage movements like returns from customers, vendors, and returns to stock.
Movement Types in shipping start with a 6.

Q87. What is a Reservation?

Ans: A Reservation is a document used to make sure that the warehouse keeps a certain amount
of a material or materials ready for transfer at a later date. It contains information on what,
quantity, when, where from and to. Reservations help effective procurement by utilizing the MRP
system to avoid out of/lack of stock situations.

Q88. Can you manually generate a Purchase Requisition referencing a Purchase

Order or a Scheduling Agreement?

Ans: A Purchase Requisition cannot be created with reference to either of these, as they are
documents controlled by the purchasing organizations. Requirements can be automatically
generated with MRP that reference a Scheduling Agreement if the source list is maintained for
item-vendor combination.

Q89. How is GR/IR account related to Inventory?

Ans: If you are involved with inventory, then you need the GR/IR account (Inventory Account)
when the IR is posted. If you are not involved about inventory, then the system does not need the
GR/IR account when the IR is posted; the system needs a G/L instead of the GR/IR account.

Q90. How do planned and unplanned consumption affect Movement Types?

Ans: In a customized Movement Type, you have defined which consumption value gets posted in
the movement. Many will always be planned or unplanned, but for some there is a dependency on
if the movement references a reservation. This would be planned consumption.
Q91. What are Departmental Views?

Ans: All functional areas of the system use the same material master data. The material master
data is defined in individual screens (departmental views) that can be added as needed. Thus a
material can be created with only basic data and other departments can add other information
later as it becomes available.

Q92. Is Material Data valid for all organizational levels?

Ans: Control of master data depends largely on how each company sets up its Organizational
levels - centralized or decentralized. Some material data is valid for all organizational levels while
other data is valid only at certain levels. (I.e.: client, plant, sales org., etc.).

Q93. Why would you want to create physical inventory sheets to perform an
inventory cycle-count on a material or materials?

Ans: For a cycle counting procedure, physical inventory documents need to be created. These are
used to record inventory levels of the material being cycle counted. Use transaction MICN. Click
on the Execute button. On screen “Batch Input: Create Physical Inventory Documents for Cycle
Counting”, perform the following, Click on the Generate Session button and Click on the Process
Session button. This procedure details how to create the physical inventory documents for cycle
counting in a batch, rather than one at a time, based on certain criteria. This would print physical
inventory documents for all material/batches that meet those requirements.

Q94. What is the difference between a Blanket Purchase Order and the
Framework Order?

Ans: In general, the Blanket POs are used for consumable materials such as office paper with a
short text, with item category B. There need not be a corresponding master record, for the
simplicity of the procurement. The FO, Framework Order, document type is used. Here, the PO
validity period as well as the limits are to be mentioned. The GR, or Service Entry for the PO are
not necessary in the case of Blanket POs. One need not mention the account assignment
category during creation of the PO. It can be U, or unknown and be changed at the time of IR.

Q95. What is Release Procedure?

Ans: Release Procedure is approving certain documents like PRs or POs by criteria defined in the
configuration. It is sensible to define separate release procedures for different groups of materials
for which different departments are responsible, and to define separate procedures for investment
goods and consumption goods.
Q96. How do you create a movement type? When will movement type numbers
be odd?

Ans: When prompted by a dialog box after an activity, you copy a movement type. Select the field
“Movement Type” and “Continue”. In the Define Work area, enter the movement type to be copied
in From: and the name your new movement type in the To: field. Now choose Continue. Choose
the desired movement type you want then choose Edit ÆCopy as and re-type the selected
movement type with the new type copy all dependent entries and make sure to begin with a proper
prefix (9,X,Z). All control indicators are copied to the new movement type. Review the new
movement type changing any necessary controls. Reversal movement types are numbered as the
number type plus one. The reversal for movement type 451 (Returns From Customer) is 452. As a
last step before saving your settings, add a copy the reversal movement type and enter it in
Reversal/follow-on movement types.

Q97. How do you adopt standard settings for the Message Determination Facility
In MM-PUR?

Ans: The Message Determination Facility is by default active and message determination schema
is supplied for all purchasing documents including POs, PRs, RFQs etc. All of the desired
message types must be maintained. Choose Master data Æ Messages Æ Purchasing document
Æ Create or Change from the Purchasing menu. Add the message type and pick the key
combination. The key combination decides the condition table where the condition record is
stored. Enter all needed items. Next screen, create the individual condition records. Using the
menu options Goto Æ Means of Communication, enter the proper peripheral, or output for each
message record. Save.

Q98. How do you set price control for receipts (goods/invoice) telling the system
how to value stocks?

Ans: Transaction Code OMW1 allows you to set price control to S (Standard Price) or V (Moving
Average Price). Under Standard Price (S), the materials and accounting documents are both valid.
The one with the lower value will be posted with a price variance entry.

Q99. How do you access the Materials Management Configuration Menu?

Ans: Transaction Code OLMS has a host of options that are not accessible through the IMG.

Q100. How are the various MM configuration Transactions accessed?

Ans: Transaction Codes OLMD accesses MM-CBP, OLMB accesses MM-IM, OLME accesses
MM-PUR, OLML accesses MM-Warehouse Management, OLMS accesses Material Master Data,
and OLMW is the proper transaction for valuation and account assignment.

Q101. What are some of the more important Materials Management Tables?

Ans: EINA contains general data of the (Purchasing) Information Record; EINE includes
Purchasing Organization of the same. MAKT is the Materials Description table, MARA-General
Materials data, MARC-Plant Data for Materials, MARD-Storage Location Data for Material, MAST-
Material to BOM Link, MBEW-Material Valuation, and MKPF-Header Material Document. Some of
the tables that directly pertain to the document types are T156 Movement Type and T023/T024
Groups Material and Purchasing.
Q102. Can you add custom fields to POs and RFQs?

Ans: Yes. You must add custom fields to the customer including structures I_EKKODB and
I_EKPODB. Create a project via CMOD for enhancement MM06E005. Follow the documentation
for MM06E005, and create the sub-screens for function group XM06 using transaction SE80. Add
fields to the appropriate screen. It is recommended that you call the screen fields EKPO_CI-name
or EKKO_CI-name. This simplifies transferring data to/from the screen. Put code in
EXIT_SAPMM06E_018 to transfer data from subscreen to structure E_CI_EKPO. Put code in
EXIT_SAPMM06E_016 to transfer data from database to sub-screen using structure I_CI_EKPO.
In the PBO of the sub-screen, do any processing to make fields display only, or hide them.

Q103. When can a Production Resource/Tool be defined as a material?

Ans: Inventory functions are to be carried out for that PRT. The information required to be input is
dependent upon which department views are being created. Thus, material master information is
typically entered at different times by numerous system users. Note that to add a view, the “Create
Material” transaction is used rather than the “Change Material” transaction.

Q104. When creating a new Material, what may prompt some of the possible
Material Types?

Ans: Pressing F4 gives a list of choices. Select the material type for the material you are creating.
For example, FHMI for Prod. Resources/tools, ROH for Raw Materials, FERT for Finished
Products, etc.

Q105. How do you create a Vendor?

Ans: Use Transaction Code XK01. Add the Vendor name, Company Code, Purchasing
Organization, Account Group, and the Vendor address. Next add the country, Bank Key, Bank
Account, Account Holder (an actual name), and then save the data.

Q106. How are materials assigned to vendors?

Ans: Information Record links materials to the vendor, thus facilitating the process of selecting
quotations. Use Transaction Code ME11 or Logistics Æ Material Management Æ Purchasing and
then Master Data Æ Info Record Æ Create.

Q107. What data does the Information Record contain?

Ans: The Information Records has data on Units of Measure, Vendor price changes after a certain
level, what materials have been procured by a specific vendor, price and conditions for relevant
Purchase Organization, Tolerance limits for over/under delivery, Vendor evaluation data, planned
delivery time, and availability time the vendor can supply the material.
Q108. How do you create the Information Record based on the Material Master
record?

Ans: In the IMG, Master Data Æ Info Record Æ Create. Enter Vendor Number, Material Number,
Purchasing Organization or Plant Number. Enter the number of the Information Record if external
number assignments are used (left blank, the system will assign a number). Enter the General
Data for the Vendor, order unit, origin data, and supply option, Customs Tariff Number. Next, enter
the Vendor’s planned delivery time (used for scheduling), responsible Purchasing Group, and
Standard PO quantity (used in conjunction with price scales for price determination). Check the
Control Data. The tolerance data and the responsible purchasing group are taken as default
values from the Material Master record. Enter the net price. Now, from the top of the screen Go To
Æ Texts to display the text overview. You can enter the info memo or the PO text. If the PO text is
already defined in the Material Master record, it appears as a default value. Save the record

Q109. What is the difference between a PR with a Master Record and without a
Master Record for the material being ordered?

Ans: If the master record exists, then all of the information about the Source List, Information
Record, and Vendor Evaluation already exist in the system. If we don’t have a Master record for
the material we are ordering, the material is generally being ordered for direct usage or
consumption. You can specify which consumption account is to be charged which is also known
as Account Assignment. For example, we assign the purchase costs associated with a requisition
to our sales order or cost center. If the first situation exists, many times purchasing enters into a
longer-term purchasing agreement with a Vendor, which is called an “Outline Agreement”. If the
Outline Agreement is done, then Purchasing cannot issue a purchase order against a PR. It can
only set up such an agreement (either a “Contract” or a “Scheduling Agreement”).
Most Asked SAP MM Interview Question and Answers
1) What is SAP MM? / What do you understand by SAP MM?
We know that SAP stands for Systems, Applications & Products in Data Processing. SAP MM is a
functional module in SAP that deals with procurement handling and material management. In SAP
MM, MM stands for Material Management. The SAP MM module contains master data, material
valuation, invoice verification, material requirement planning, system configuration, transactions,
etc., to complete the procurement to pay process.

2) What are the key advantages of SAP MM or SAP Material

Management?
SAP MM is one of the largest functional modules in SAP. This module mainly deals with the
Procurement Process, Master Data (Material & Vendor Master), Inventory Management, Valuation
of Material & Account Determination, Material Requirement Planning, Invoice Verification, etc.

Following are the main key advantages of SAP MM or SAP Material Management:

o SAP MM reduces material costs by avoiding stocking unnecessary or obsolete materials.

o In SAP MM, inventory losses are minimized because it provides multi-location inventory.
o SAP MM reduces direct labor costs, and labor can be used efficiently.
o It can improve the delivery time and increase transparency across the organization.
o It provides the lot and serial traceability.
o It also provides bin management, scheduling, and resourcing.
o It reduces the manufacturing cycle times and can be controlled effectively.
o It provides effective inventory management and reduces expenditure on unwanted material storage.
o It also provides inventory replenishment and product life cycle management.

3) What are the main master files used in SAP MM?

The main master files used in SAP MM are:

o Material master file

o Inventory master file
o Vendor master file
4) What are the most necessary components of SAP MM or SAP
Material Management?
The most necessary components of SAP MM or SAP Material Management are:

o Vendor Selection
o Source determination
o Invoice Verification
o Order Processing
o Order follow up
o Determine requirements
o Goods receipts and Inventory management

5) What do you understand by goods receipt and post goods receipt?

Goods Receipt: In SAP MM, goods receipt is the physical inbound transfer for goods or material
into the warehouse. It specifies the transfer of goods used to post goods received from external
vendors or in-plant production. All goods receipts result in an increase in stock in the warehouse.

Post-Goods Receipt: The Post Goods Receipt specifies the reference to the purchase order with
which the goods were ordered. It is used to post the receipt of goods with reference orders after
purchase. If the material is delivered for some purchase order, it is important for all departments
involved that the goods receipt entry in the system references this purchase order.

6) What are the different types of stocks used in SAP MM?

Following are the three different types of stocks used in SAP MM:

o Valuated Stock
o Non-valuated stock
o Special Stock

Here, the valuated stock is further divided into three parts:

1. Unrestricted stock
2. Blocked stock
3. Quality Inspection Stock
The Special Stock is classified as follows:

1. Stock Transport Order

2. Subcontracting
3. Consignment
4. Returnable Transport Packaging
5. Stock Transport Order
6. Pipeline Handling
7. Third-Party Processing

7) What do you understand by Consignment Stock?

The Consignment Stocks are used to specify those materials that are still available in the store
premises but belong to the owner or seller. When the buyer uses the consignment stocks, he has to
pay for them.

8) Which type of document is a purchase requisition, internal, or

external document?
A purchase requisition is an internal document, and it is the phase in which purchasing department
is informed about the requirement of items or services required for business purposes.

9) What are the different info record types in SAP MM?

The different info record types in SAP MM are:

o Standard
o Pipeline
o Subcontracting
o Consignment

10) What do you understand by an internal procurement?

The big corporate organizations own multiple separate businesses or companies. Here, internal
procurement is a process of getting material and services from identical companies. So, each of
these companies maintains a complete bookkeeping system with separate Balance, Profit & Loss
Statements so that when a trade occurs between them, it will be recorded.

11) What do you understand by Special Procurement in SAP MM?

In SAP MM, Special Procurement is used to specify those stocks that do not belong to a company,
and these are kept at different locations.
12) What are the different steps used in Procurement Lifecycle?
Explain them in detail.
Following are the different steps used in Procurement Lifecycle:

Requirement and Information Gathering

The procurement process begins with gathering information about a product and its quantity first. Then for
required products and services, it is necessary to look for suppliers who can satisfy the requirements.

Supplier Contact

This step comes after requirement and information gathering. After gathering requirements, one
will look for the suppliers who can fulfill the requirements. Based on that, we can make a quotation
request or information request to the suppliers or direct contact with them.

Background Review

Once the supplier is known, product/service quality is checked, and any necessities for services such
as Installation, warranty, and maintenance are investigated. Some samples of the products can be
obtained for qualifying examination.

Negotiation

Some negotiations with suppliers are made regarding the products/services' price, availability, and
delivery schedule of the products/services. In this step, a contract is signed, a binding legal document
between the supplier and the ordering party. A contract will include all necessary information like
price and quantity of material, delivery date, etc.

Order fulfillment

Ordered material will be shipped, delivered to the ordering party, and the supplier is paid
accordingly. Training and Installation of products or services may also be included.

Consumption, Maintenance, and Disposal

As the products/service is consumed, the performance of the products or services is evaluated, and
any follow-up service support, if required, is analyzed.
13) What are the different types of special stocks available in SAP
MM?
Different types of special stocks available in SAP MM are:

o Subcontracting
o Consignment
o Project
o Pipeline
o Sales order
o Stock transfer
o Returnable packaging with a customer, etc.

14) What are some common assignment types in the SAP Material
Management system?
Following is a list of some common assignment types in the SAP Material Management system:

o Purchasing organization to company code

o Standard purchasing organization to plant
o Plant to Company code
o Purchasing organization to Plant

15) What are the important fields in the purchasing view in SAP MM?
The most important fields in the purchasing view in SAP MM are:

o The base unit of measure

o Order unit
o Purchasing group
o Material group
o Valid from
o Tax indicator for the material
o Manufacturer part number
o Manufacturer, etc.
16) What do you understand by a Purchase Order?
A Purchase Order is a type of confirmation list that a buyer sends to his sender to confirm the requirements
finally. The Purchase Order not only includes the names and quantity of materials, but it also has valuable
information like details of purchasing company with a company code, name of material along with the
corresponding Plant, and date for delivery of material.

17) What is the importance of the batch record in SAP MM?

In SAP MM, a batch is used to specify the quantity of a particular product, which is processed or produced
simultaneously with the same parameters. The materials produced in these batches have the same values and
characteristics. On the other hand, the batch record is used to give information about a particular batch
product and is mainly used in knowing whether the product has gone through GMP (Good Manufacturing
Process).

18) How can you link a document to a vendor master record?

We can link a document to a vendor master record by using the XK01 transaction code or by using the
following menu path:

1. SAP Menu > Logistics > Material Management > Purchasing > Master Data > Vendor > Central > X
K01- Create.

19) What are some common assignment types in the SAP Material
Management system?
Some of the most common assignment types in the SAP Material Management system are:

o Purchasing organization to company code

o Plant to Company code
o Standard purchasing organization to plant
o Purchasing organization to Plant etc.

20) What type of data mainly the information record contains?

The information record mainly contains the data related to the units of measurement, such as the products,
vendor price, materials used by specific vendors, etc. It also contains information on the tolerance limit of
the under-delivery of data, planned delivery time, vendor evaluation data, availability status for goods, etc.
21) What transaction code is used to delete a batch in SAP MM?
In SAP MM, the transaction code MSC2N is used to delete a batch. There is an alternate way to delete a
batch record which we can do by flagging the batch master record.

22) How can you release a purchase order? Which Transaction Code
is used to display and reset the release of a purchase order?
We can release a purchase order at the header level. It is not possible to release a single item in the purchase
order, and we have to release all the items at a time. The ME29N Transaction Code is used to display and
reset the release of a purchase order.

23) What is the transaction code used to extend the material view in
SAP MM?
In SAP MM, the transaction code MM50 is used to extend the material view.

24) What do you understand by Consignment Stock?

Consignment Stock is the material that is available at our store premises but still belongs to the vendor
(seller)/Owner of the material. That's why we have to pay the vendor for utilizing the material from
consignment stocks.

25) What do you understand by Source List? What is the transaction

code used for creating the Source List?
The Source List is used to identify the sources of supply for materials. The transaction code ME01 is used
for creating the Source List.

26) What is the full form of ERS in the context of SAP MM?
In SAP MM, ERS stands for Evaluated Receipts Settlement. It refers to the process of settling down receipts
of the goods automatically. In the ERS process, an agreement between the vendor and the user that vendors
do not prepare an invoice for the goods ordered. Rather, the system would automatically generate and post
the invoice document based on the purchase order and goods receipts.
27) What are the pre-requisites for creating a purchasing info record
in SAP MM?
Following is the list of pre-requisites used for creating a purchasing info record in SAP MM:

o Material Number
o MPN ( Manufacturer Part Number )
o Vendor Number
o Organizational level code

28) How can you flag a material for deletion in SAP MM?
We can set a deletion flag at the client level, plant level, or storage location level. The Transaction Code
MM06 is used to mark material for deletion.

29) How can you change the standard price in the SAP master
material?
There is no way to update or change the standard price for the material data directly. However, we can
perform the following steps to change the standard price:

o Fill in the future fields price (MBEW-ZKPRS) and the materials' effective data (MBEW-ZKDAT).
o Select Logistics > Material Management > Valuation > Valuation Price Determination > Future Price.

30) What is the use of keeping a record of the information of

purchase?
It is necessary to keep a record of purchase information because it collects various information of the
vendors and the materials supplied by them. For example, the current price at which the vendor sells the
material is recorded in the purchase record.

31) What do you understand by the terms Planned delivery and GR

processing time?
Planned delivery: The term Planned delivery specifies the number of calendar days required to obtain the
material.

GR processing: The term GR processing specifies the number of workdays required after receiving the
material for inspection and placement into storage.
32) What do you understand by Goods Receipt in SAP system?
After the vendor process the purchase order, the material is delivered to the ordering party. This process is
called a goods receipt. So, the Goods Receipts is the phase in which the ordering party receives the material,
and the condition and quality are verified. Once the material is verified against the quality, then the Goods
Receipt is posted.

33) What do you understand by purchase requisition?

A purchase requisition is a primary document used as part of the accounting method to launch merchandise
or supply purchase. We have to process the purchase order for suitable controls, monitor the legitimacy of
purchase, and identify the business requirement for the products.

34) What is the full form of RFQ in SAP MM? Why is it used?
In SAP MM, the full form of RFQ is Request For Quotation. It is an invitation sent to sellers to provide
the quotation showing pricing and the terms and conditions for that purchase. RFQ also contains information
about the date of delivery, goods and services, quantity, and submission date.

35) What do you understand by the terms production order and

purchase order?
Production order: The term production order specifies which material needs to be prepared at which time
and location. It is also concerned about the quantity required. It also determines the components and
sequence of operations and the order costs that need to be resolved.

Purchase order: The Purchase order is issued by the Vendor or the factory to supply a certain quantity of
products and services at a particular time and location.

36) What is the purpose of the material valuation?

In SAP MM, material valuation is a module necessary to determine the stock value of materials.

37) What is the use of document type in the SAP system?

In the SAP system, the document type indicates different procedures for a transaction within the
system.

38) What is the storage location in SAP MM?

In SAP MM, a storage location is where we can store our stock of goods within the premises of a
plant. Each plant has at least one storage location assigned to it.
39) What is the use of Purchase Info Record?
The Purchase Info Record is used to store information about the material and the VendorVendor
who supplies that material.

40) How can you create a vendor account group in SAP MM?
We can create a vendor account group in SAP MM by following the steps given below:

Select display IMG > Financial Accounting > Accounts Payable/Receivable >Vendor Accounts >
Master Records > Preparation of creating vendor master records > Define Accounts groups with
Screen Layout

41) What are the different Procurement types that we can establish
Purchase requisition in SAP MM?
We can create a purchase requisition for the following procurement types:

o Stock transfer: It is used to specify a transfer of material within the organization.

o Subcontracting: It is used for sending raw material to the seller and getting back finished material.
o Standard: It is used for getting back finished material from the seller.
o External service: It is used to specify the availing services from third-party sellers like maintenance.
o Consignment: It is used to pay the seller regarding the procuring material available on the company's
premises.

42) What do you understand by master data?

Master Data is created centrally and is valid for almost all applications, and it remains constant over
time, but we have to update it regularly. For example, the VendorVendor is a type of master data,
and it is used for creating purchase orders.

43) What do you understand by consumption-based planning (CBP)?

CBP stands for Consumption-Based Planning, which is used to forecast to find out the future
requirements. It is dependent upon past consumption values. Based on CBP, the net requirement of
goods is calculated. CBP is activated either when the stock level comes below a particular reorder
point or when the forecast needs to calculate past consumption values.
44) What do you understand by the term material requirement
planning (MRP)?
In SAP MM, MRP stands for Material Requirement Planning. It is a module or a sort of planning tool
in SAP ERP (Enterprise Resource Planning). It is used to assist procurement and production planners
in establishing realistic and possible plans to help initiate procurement and production procedures.

45) What is the difference between the terms MRP and CBP?
The primary difference between the term CBP and MRP is that when we plan material, we use MRP
to predict the requirements of materials based on SOP (sales and operations planning). On the other
hand, in CBP, we have to forecast the MM (material management) depending upon the historical
demand for materials.

46) What do you understand by a transaction code in SAP MM?

A transaction code is made of letters, numbers, or both. It is entered in the command field at the
top of an SAP GUI screen. Each function in SAP ERP has an associated SAP transaction code that
facilitates you to access any function in SAP directly. A transaction code is also called t-code.

47) What is a material ledger in SAP MM?

In SAP MM, a material ledger is used to retain all transactions related to purchasing and using
materials for producing goods. Material ledger data is valuation and control data for a material in a
plant for a specific posting period. The material ledger contains data for material movements that
are relevant to the valuation of the material.

48) How can a vendor return be processed without a purchase order

reference?
A vendor return can be processed without a purchase order reference by following the steps given
below:

o First, observe the return column and then select Item Detail > MIGO_GR > Goods Receipt for Purchase
Order.
o Use the movement type 161 if the intention is to deduct the stock; otherwise, use the 162 to undo the
changes.
o Ensure that the document is a return purchase order, and then save the document.
o We can also use transaction code M21N for this purpose.
49) What do you understand by the Master Production Schedule
(MSP) in SAP MM?
In SAP MM, MSP stands for Master Production Schedule. It is used to plan for individual commodities
that need to produce in each time, such as production, inventory, staffing, etc. It is linked to
manufacturing, where the plan shows how much and when each product will be demanded.

50) What is the use of the Confirmation Control Key (CCK)?

The Confirmation Control Key or CCK is used to specify whether a notification for shipping is an
expected purchase order item or not.

51) What are the different accounts used in Invoicing?

Following are the different accounts used in Invoicing:

o Vendor accounts
o Stock accounts
o GR/IR clearing accounts
o Tax account
o Price differences account Cash difference clearing account Freight clearing account.

52) What is a Batch Information Cockpit in SAP MM?

The Batch Information Cockpit (BIC) is the main switching point having a wide range of options for
scrutiny and control. In SAP MM, the BIC stores all the information related to analyzing a particular
batch at a single location.

53) What do you understand by the Lot Size in SAP MM?

In SAP MM, the Lot Size is the number of materials used for re-ordering. It can be static, periodic,
optimum, or fixed in attributes.

54) What do you understand by release group in SAP MM?

In SAP MM, the release group is a two-digit code assigned with a class and contains one or more
release strategies. For example, release group 01 is defined for purchase requisitions, and release
group 02 is defined for the purchase order.
55) What is the use of 'Split Valuation' in SAP MM?
In SAP MM, the Split Valuation is used in cases where we need to evaluate various material stocks
separately. It can be because of different origins, quality, status, etc. In Split Valuation, the material
is managed at several partial stocks, which are sub-stocks of main material stock. Any transaction
relevant for valuation is carried at this partial stock level. In the accounting view, we define if we
need a split valuation for any material.

56) How is Material Valuation associated with Financial Accounting?

In SAP MM, Material valuation is directly associated with Financial Accounting. If you make any
changes in the stock value, it also updates the G/L account in Financial Accounting.

57) What are the accounts created in SAP MM? What is the
importance of the assignment of these accounts?
In SAP MM, the assignment of account is necessary for the purchase order item. It is important as it
determines the following things:

o Account assignment type

o An account that will be charged when you post the invoice or goods receipt
o Account assignment data that you have to provide

58) How is the list of all reservations in the system displayed?

The list of all reservations can be displayed by running the RM07RESL report in SAP MM.

To change a batch record, we can use the transaction code MSC2N. Following is the navigation path
of changing the batch record:

1. SAP Menu -> Logistics -> Materials Management -> Material Master -> Batch -
>> Change
The Questions
1. What is meant by scales? ↑
You can fix a price in the info record for a say qty from 1-100 price RS150 & if the order
qty is 101- 500- the prices is 140. Scales cannot be used directly in PO but can be pulled
into the PO from various master data like info records, quota arrangements.

2. What are the Main Master Files used in Mm? ↑

• Material master file

• Inventory master file

• Vendor master file
3. What do you mean by goods receipt and post goods receipt? ↑
Goods receipt is the physical inbound transfer for goods or material into the warehouse. It
is the transfer of goods which is used to post goods received from external vendors or
from in-plant production. All goods receipts result in an increase in stock in the
warehouse.

Post-Goods Receipt is used to post the receipt of goods with reference to the purchase
order with which the goods were ordered. If the material is delivered for some purchase
order, it is important for all of the departments involved that the goods receipt entry in the
system references this purchase order.

4. Can you Release the Po Item by Item When you have a Multiline-item Po? ↑
No, you cannot release the PO item by item. PO can be released at the header level by using
the with classification release procedure.

5. Is it possible that you can use scales in Quotation? ↑

No

6. How to Release Purchase Order? Which Transaction Code is used to display as well as
reset the Release of Po? ↑
You can release a purchase order at header level. You cannot release a single item in
purchase order. You need to release all the items at a time. The ME29N transaction code is
used to display as well as reset the release of purchase order.
7. Define ERS. ↑
ERS stands for Evaluated Receipts Settlement. It refers to the process of settling down
receipts of the goods in an automatic manner. In this process, an agreement is made
between the vendor and the user that vendors do not prepare any invoice for the goods
ordered. Rather, the system would automatically generate and post the invoice document
on the basis of purchase order and receipts of goods.

8. Why is record of the information of purchase useful? ↑

It is essential because it collects various information on the vendor and the materials
supplied by them. For instance the current price at which the vendor is selling the material
is recorded in the purchase record.

9. Define purchase requisition. ↑

A purchase requisition is a primary document which is used as part of the accounting
method to launch a merchandise or supply purchase. By processing a purchase order,
suitable controls can monitor the legitimacy of purchase, as well as identify the business
requirement for the products.

10. What Is Stochastic Block? ↑

Stochastic Blocking is the process of checking the incoming invoices. In this process,
blocking of the invoices is done randomly. Invoices with high value have the highest
probability to get blocked. It is set for the whole invoice instead at the item level. When
posting of the invoice is done, an R is set in the Payment Block field in the document
header data.

11. How can Batch Records be changed? ↑

You can change a batch record by using the transaction code MSC2N. The navigation path
of changing the batch record is:

SAP Menu -> Logistics -> Materials Management -> Material Master -> Batch -» Change.

You can change the batch record, but you should note that these changes are also available
for review.
12. What is Internal Procurement? ↑
Large corporate organizations may own multiple separate businesses or companies.
Internal Procurement is process of getting material and services from among identical
company. So, each of these companies maintains a complete bookkeeping system with
separate Balance, Profit & Loss Statements so that when trade occurs between them it will
be recorded.

13. Give the Names of the Tables where the Material Master Data is Stored. ↑
The MARA and MARC are the two tables where the master data is stored.

14. What are the components of the Master Data that details a companys Procurement used
by, Vendor Evaluation for example? ↑
The key components of Master Data are:

• Info Record (ME11)

• Source List (ME01)
• Quota Arrangement (MEQ1)
• Vendor (MK01)
• Vendor Evaluation (ME61)
• Condition Type (MEKA).
15. What is the code used for extension of the view of material? ↑
The code used for the transaction of the material view is MM50.

16. A Purchase requisition is an internal document or external document? ↑

Internal document, it is the phase in which purchasing department is informed about the
requirement of items or services required for business purpose.

17. What are the different accounts used in Invoicing? ↑

• Vendor accounts

• Stock accounts
• GR/IR clearing accounts
• Tax account
• Price differences account Cash difference clearing account Freight clearing
account
18. How many Company Codes can be assigned to a Company? ↑
You can assign one or more company codes to a company.
19. Explain reservation. ↑
Reservation is the blocking of the stock beforehand so that its availability is ensured later
in time. It ensures that the stock is made available and can be used as per requirement.

20. Can a Company Code be assigned to many Plants? ↑

Yes, you can assign a company code to many plants.

21. What is a Material Master File? ↑

the complete information related to managing a material is stored and maintained in a
data record in the material master, which is sorted on the basis of different criteria.

22. What is External Procurement? ↑

It is the process of procuring goods or services from external vendors. There are 3 basic
forms of external procurement generally supported by the Purchasing component of IT
system.

23. List out the essential components of material management. ↑

• Determine requirements

• Source determination
• Vendor Selection
• Order Processing
• Order follow up
• Goods receipts and Inventory management
• Invoice Verification
24. What is a request for quotation (RFQ) document? ↑
RFQ or Request for Quotation also known as Invitation for Bid is a document which an
organization submits to one or more potential suppliers to invite them for the bidding
process for a product or service.

25. What do you mean by the Lot Size? ↑

The lot size is the quantity of materials used for re-ordering. It can be static, periodic,
optimum, or fixed in attributes.

26. Give the Names of the Tables where the Header Level and Item Data are Stored in a
Purchase Order. ↑
The EKKO and EKPO are the two tables where the header and item level data are stored,
respectively.
27. What is the Menu Path to define Material Type Attributes? ↑
The following is the menu path to define material type attributes:

Select Logistics Master Data: Material Master -> Material -> Control data -> Define material
type attributes.

28. What Is Release Strategy? How many Release Points can be involved in a Release
Process? ↑
The release strategy specifies the release codes with which a purchase document must be
released and the sequence in which the release must be used. you can define a maximum
of eight release codes with their respective release strategies. you can involve 8 release
points in a release process.

29. What are the Plant-specific Data in Material? ↑

The MRP data and forecast data are the plant-specific data in material.

30. What Is Goods Issue Reversal? ↑

The process of issuing the material back to the stock of material is known as a goods issue
reversal. For example, if goods issued to the production order are 500 kg of material and
only 300 kg is consumed, then the rest 200 kg is returned to stock.

31. List the Movement Types for Unplanned Goods received. ↑

• 501

• 561
• 531
32. How do you flag a material for deletion? ↑
A deletion flag can be set at client level, plant level or storage location level. Transaction
MM06 is used to mark a material for deletion.

33. What Is the Transaction Code to Set Price Control for Receipts (goods/invoice)? ↑
The transaction code OMW1 is used to set price control for receipts (goods/invoice).

34. What is the use of ‘Split Valuation’? ↑

Within a valuation area, sometimes, we need to valuate various stocks of a material
separately. It can be because of different origin, quality, status, etc. We use split valuation
in such cases. In this case, material is managed at several partial stocks which are sub-
stocks of main material stock. Any transaction, relevant for valuation, is carried at this
partial stock level. In accounting view, we define if we need split valuation for any
material.
35. How are parked documents showed? ↑
Parked documents are showed with the codes FBV3 and FB03. FBV3 displays the parked
sheets whereas FB03 shows all the posted sheets. It is useful to use FBV3 if one needs to
know if any documents still need approval or if they still need completion.

36. What is movement in receipt out (MIRO)? ↑

MIRO or Movement in Receipt Out deals with invoice verification activities for bills raised
from the vendors end. So, basically, MIRO is booked by the finance department.

37. Can a Company Code be assigned to many Plants? ↑

You can assign many company codes in a chart of accounts.

38. What do you mean by Release Group? ↑

The transaction codes ME54 and ME29N are used to define the release procedures for PR
and PO, respectively.

39. What is returnable transport packaging (RTP)? ↑

Returnable transport packaging (RTP) is a multi-trip packaging medium in which goods
can be transported more than once between retailers and customers.

40. How is quota rating checked? ↑

he formula for checking the quota rating is addition of the base quantity of the quota and
the allocated quantity quota and divides it by the overall quota.

41. How can you create a Purchasing Information Record? ↑

You can create a purchasing information record either manually or automatically by
setting the Info update indicator when maintaining a quotation, a purchase order, or an
agreement.

42. What is a Cost Center? ↑

Cost Center accounting is used for controlling purposes. It is an organizational unit within
a controlling area which represents a defined location of cost incurrence. For example, any
department can be a cost center for recording all expenses incurred for that department.

43. What Transaction Code is used to extend the Material View? ↑

The MM50 transaction code is used to extend the material view.
44. What is a planned order in material management? ↑
A planned order is sent to an industry and is a material requirement planning request for
the procurement of a particular material at a determined time. It specifies when the
internal material movement needs to be made and the amount of material that is
demanded.

45. What Is the Purpose of Material Valuation? ↑

Material valuation in SAP MM module is necessary to determine the stock value of
materials.

46. What is a Material Ledger? ↑

A material ledger retains all transactions that relate to the purchase and use of materials
for producing goods. Material ledger data is valuation and control data for a material in a
plant for a specific posting period. Material ledger contains data for material movements
that are relevant to the valuation of the material.

47. What is the Role of the Confirmation Control Key? ↑

The confirmation control key is used to specify whether or not a notification for shipping is
expected PO item.

48. What is Batch Information Cockpit? ↑

The Batch Information Cockpit (BIC) is the main switching point having a wide range of
options for scrutiny and control. It stores all the information related to the analysis of a
particular batch at a single location.

49. How is the list of all Reservations in the Systems Displayed? ↑

The reservation list can be displayed by running the RM07RESL report.

50. Define Storage Location in SAP. ↑

In SAP system, a storage location is the place where you can store your stock of goods,
within the premises of a plant. Each plant has at least one storage location assigned to it.

51. What do you mean by Release Group? ↑

Release group is a two-digit code that is assigned with a class and contains one or more
release strategies. For example, release group 01 is defined for purchase requisitions and
release group 02 is defined for purchase order.
52. What is meant by master data? ↑
Master Data is basically created centrally and is valid for almost all the applications. It
remains constant over time but it is required to update it on a regular basis. For example,
the Vendor is a type of master data and he is used for creating purchase orders.

53. How Material Valuation is associated with Financial Accounting? ↑

Material valuation in MM module is associated with Financial Accounting as any change in
the stock value also updates the G/L account in Financial Accounting.

54. What is a transaction code in material management? ↑

A transaction code (or t–code) consists of letters, numbers, or both, and is entered in the
command field at the top of any SAP GUI screen. Each function in SAP ERP has an SAP
transaction code associated with it. You can directly access any function in SAP using t-
codes.

55. What is the code used for reservation? ↑

The Transactional code used for reservation is MB21.

56. What is a Scheduling agreement? ↑

Scheduling agreement is a long term outline agreement between vendor and ordering
party over a predefined material or service which are procured on predetermined dates
over a framework of time.

57. What are Purchasing Information Records? ↑

The purchasing information records, also known as info record, contain information
related to the material and vendor who is supplying the material. It also contains details
about the material, such as the current price of the material.

58. Where is Material Master Data saved? ↑

Tables MARA and MARC.

59. What is the use of BOM usage type 1 in SAP system? ↑

It is used for Production.

60. What is EAN? ↑

An article can be carried in different units of measure. An European article number (EAN)
is created as a unique indicator for each of these units of measure. The most important use
of EANs within a company is to identify articles at the point of sale (POS) using the
barcode.
61. What is the Source of Error "not Allowed" in case of Custom Movement Type Creation? ↑
You need to check the allowed transaction for the customized movement types and use the
OMJJ transaction code.

62. How do you access the Materials Management Configuration Menu? ↑

Transaction Code OLMS has a host of options that are not accessible through the IMG.

63. What is Master Data nn MM Module? ↑

Master data in MM module acts as a reference data defining various business entities and
plays a key role in the core operation of a business.

64. Can you add Custom Fields to Purchase Order(s) and Request for Quotation(s)? ↑
Yes, you can add custom fields to a Purchase Order and Request for Quotation.

65. What are the features of material management? ↑

• Purchasing

• Production and material control

• Non-production stores
• Transportation
• Material handling
• Receiving
66. What is a Profit Center? ↑
Profit Center Accounting evaluates the profit or loss of individual, independent areas
within an organization. Profit center is an organizational unit in controlling to recognize
your profit. Profit center is attached to material master at plant level.

67. Mention, for the stock transport order, some movement types. ↑
Some of the movement types are 351, 641, 643 for the stock order. Another one is 301
which can be used an easy way for transferring materials.

68. How do you define a Release Procedure for Prs and Pos? ↑
Use Transaction ME54 and ME28 respectively.

69. How is scrap material taken care of in sub-contracting? ↑

Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or Co-
Product. Common practice is to maintain scrap as by-product and receive it back along
with processed material.
70. What are quotations in SAP material management? ↑
Quotations in SAP MM are certain requests for vendors which provides us with some
information about their best prices, terms and conditions, schedules of deliveries and
other information in order to select the best source for our procurement needs.

71. Can Forecast Model be selected automatically? ↑

The forecast model can be selected automatically by entering the value J in the Forecast
Model field in the Material Master record where the value J is used for Automatic Model
Selection.

72. What are the Benefits of document Parking? ↑

The benefit of document parking is that you can modify the invoice in a parked status
whereas the invoice that is placed on hold cannot be modified.

73. What is Intra plant stock transfer type in SAP MM? ↑

Storage Location to Storage Location.

74. What is the Lot Size Attribute of a Material? ↑

The lot size attribute represents the reorder quantity for a material. A material can have a
periodic, optimum, or a static or fixed lot size.

75. What is the Transaction Code to convert Planned Order into Purchase Requisition (pr)? ↑
MD14 is the transaction code to convert planned order into PR.

76. What do you understand by GR Blocked stock? ↑

This is conditionally accepted stock and not the unrestricted stock.

77. What is the type for the reversal of the issue of the goods? ↑
The transactional type for the reversal of the issue of the goods is the number 262.

78. Mention t-code to create Purchase Requisition in MM. ↑

Transaction code ME51N can be used to create Purchase Requisition in MM.

79. How is the value of the Cross-company-code Stock Displayed? ↑

You need to perform the following steps to display the value of the cross-company-code
stock in transit:

Select Environment-> Stock-> Stock in transit.

80. What is the Transaction Code to display Material of Sap MM? ↑
MM03 is the transaction code to display material of SAP MM.

81. What Is a Standard Service Catalog (ssc)? ↑

A Standard Service Catalog (SSC) is a general standardized catalog that contains the
detailed explanation of services. The descriptions of these services are stored as master
records and help to remove data duplication.

82. What is Special Procurement? ↑

Special stocks are stocks that are managed differently as these stocks did not belong to
company and these are being kept at some particular location.

83. Can we change the Industry Sector of an existing Material? ↑

No, once assigned you cannot change the industry sector of an existing material.

84. Where do We define Payment Terms in PO? ↑

The payment terms in PO represent the agreements of customers and vendors. you can
define the payment terms in PO in the master records of customers and vendors.

85. What are the benefits or uses of material management? ↑

• Material valuation

• Multi-location inventory
• Bin management
• The lot and serial traceability
• Product life cycle management
• Inventory replenishment
• Scheduling and resourcing
86. What is Price Comparison? ↑
Price comparison is used to compare quotations from different vendors. You can use
transaction code ME49 to perform a price comparison between different vendors.

87. What Is the Release Procedure? ↑

The release procedure allows you to create condition records for the planning process. It is
used to creating Purchase Requisitions (PR), Purchase Orders (PO), Request for Quotation
(RFQ), Outline Agreements, and Service Entry Sheets.
88. What do you mean by Material Numbers In SAP? ↑
Material numbers are unique numbers used to identify a material.

89. Tcode for Stock overview? ↑

MMBE.

90. What is the Creation Indicator? ↑

The creation indicator defines whether or not the planned orders, purchase requisitions,
or schedule lines must be created for materials that are procured externally. It also defines
whether or not MRP lists need to be created.

91. How is a receipt posted? ↑

The goods receipt can be posted by going to the option of logistics and then to the
materials management and then the inventory management and the choosing the goods
movement and then choosing the T code which is MIGO.

92. What is a request for information (RFI)? ↑

A request for information or RFI is a basic business process which collects written
information about the capabilities of suppliers. It generally follows a format which can be
used for comparative purposes.

93. What Is Release Code? ↑

The release code is a two-character field or ID that represents the person responsible for
the approval of the release procedure.

94. How many Company Codes can be assigned to a Plant? ↑

You can assign only one company code to a plant.

95. What are the different types of ERPs? ↑

Different types of ERPs are as follows: SAP, Microsoft dynamics, People Soft, Oracles,
Siebel, BAAN. These are some of the different types of Enterprise Resource Planning.

96. Can you include An Roh (raw Material) Type In the Sales View? ↑
Usually, the raw materials cannot be included in the sales view. However, the raw
materials can be included in the sales view only when they are sold to procure finished
products in return.

97. What is Material Status? ↑

It is 2 digit code and is used to determine the material usability.
98. What is NetWeaver? ↑
NetWeaver is an incorporated technology in which every product in the MySAP group can
be used in a single go of a server which is known as SAP Web Application Server. This
technology is very useful and helps the user efficiently. One of the advantages of using this
is that the data related to SAP can be accessed by the enterprise through or even through
mobile. This is not only cost effective but also time effective. If one uses this a lot of money
is saved which could otherwise go in training a new user in the SAPclient.

99. What is consumption-based planning (CBP)? ↑

It is based on past consumption values which makes use of the forecast or other statistical
procedures to determine future requirements. It is triggered when the stock level falls
below a predefined reorder point or by forecast requirements calculated using past
consumption values.

100. What is SAP MM and what do you know about it? ↑

It is one of the modules in SAP that deals with the management of materials and
procurement process. It also includes master data, account determination, material
valuation, inventory management, invoice verification, material requirement planning, etc.

101. What are the different type of Basic Procurement? ↑

• Procurement for Stock vs Consumption

• External vs Internal Procurement

102. Name the T Code for Invoice Verification. ↑
An invoice is verified by using the OLMR T code.

103. How many Charts of Accounts can be assigned In a Company? ↑

In a company, only one chart of accounts can be assigned.

104. What is the movement type for Goods issue reversal? ↑

Movement type is 262 in Goods issue reversal.

105. What is invoice processing? ↑

Invoice processing is a process a company’s account payable uses to manage supplier
invoices. It begins when you accept an invoice and ends when payment has been made and
reported in the general ledger.
106. Why would an Organization need to allow Negative Stocks? ↑
Negative Stocks are necessary when Goods issues are entered necessarily (business
process reasons) prior to the corresponding Goods Receipts and the material is already
located physically in the warehouse.

107. Define Valuation Class. ↑

Valuation class is a group of different materials that share some common properties. This
group is defined so that you do not have to manage a separate account for each material.

108. Can we change the Material Type of a Material? ↑

Yes, we can change the material type of a material.

109. How do you configure the Release Procedure? ↑

Use Transaction OMGQ.

110. What is master data management? ↑

Master data management is a comprehensive method of enabling an enterprise to link all
of its critical data to a common point of reference. When properly done, MDM improves
data quality, while streamlining data sharing across personnel and departments. In
addition, MDM can facilitate computing in multiple system architectures, platforms, and
applications.

111. What is material requirement planning (MRP)? ↑

It is a module in SAP enterprise resource planning. It is a type of planning tool to help
production and procurement planners to create feasible and realistic plans which helps to
quickly initiate procurement and production process.

112. How to create a Batch? ↑

You can create a batch record manually by using the transaction code MSC1N. The
navigation path of creating a batch is:

SAP Menu -> Logistics -> Materials Management -> Material Master -> Batch -> Create.

113. What is the Menu Path to create a document/e-mail Notification for your Supplier? ↑
The following is the menu path to create a document/e-mail notification for your supplier:

Select Material Management-> Logistics Invoice Verification -> Message Determination.

114. What do you mean by Forecast-based Planning? ↑
Forecast-based planning is a process used in consumption-based planning which depends
on predictions of future requirements calculated on the basis of forecast.

115. What is planned delivery and GR processing time? ↑

The meaning of planned delivery is the number of business days in which the person is
expected to receive the materials and goods. The GR processing time is the number of
business day in which the person has to inspect and place the material in the storage, after
obtaining the goods and materials.

116. What is Vendor Sub-range? ↑

The vendor sub-range is defined as a subdivision of the total range of products provided
by a vendor. Vendor sub-ranges are required when you create or maintain Material Master
data.

117. What is the Transaction Code to create Movement Types? ↑

OMJJ is the transaction code to create movement types.

118. Can you generate packing/picking lists for goods issue in SAP MM? ↑
In SAP EWM you can generate packing list.

119. How to make a Dummy Reservation? ↑

The user can try to create a new movement type with reference to 201 movement type.

120. Why does the Invoices get blocked? ↑

• Variance in the invoice item

• Amount of an invoice item

• Stochastic block
• Manual block
121. Mention the last stage in the cycle of procurement? ↑
The last stage of the procurement cycle is the verification of the invoice. This also updates
the documents which are related in the accounts and finances. There is a difference
between the real invoice and the blocked one the real invoice can be handled by
verification of the invoice.

122. How can you disable a reservation In MRP? ↑

Use Transaction Code OPPI to check “block stock”.
123. What do you mean source list and what is the code of the source list? ↑
The source list is to identify the home of the supply from where the materials come. The
code for creating the source list: ME01.

124. What Transaction Codes are used With Reservations? ↑

• The MB21 transaction code: Creates a reservation.

• The MB22 transaction code: Changes a reservation.

• The MB23 transaction code: Displays a reservation.
• The MB25 transaction code: Displays lists of reservations.
125. How can the Logical Value for the Stock Items be found? ↑
You need to use the MC49 transaction code to find the logical value of the stock items by
date.

126. What Is Valuation area? ↑

Valuation area is the organizational level at which the material valuation is carried out.

127. Mention the code to access the Material Requirement Planning list. ↑
For accessing a single item one can use the code MD05.

128. What is free item in SAP system? ↑

The Price will be marked zero for free item. We can tick the item as free item while
creating PO in system.

129. How do you create a Vendor? ↑

Use Transaction Code XK01. Add the Vendor name, Company Code, Purchasing
Organization, Account Group, and the Vendor address. Next add the country, Bank Key,
Bank Account, Account Holder (an actual name), and then save the data.

130. What is the Transaction Code to access the Materials Management Configuration
Menu? ↑
The OLMS transaction code is used to access the Materials Management Configuration
menu.

131. What are contracts in material management? ↑

A contract is a long-term agreement with a vendor to supply a material or provide a
service for a certain period of time. These are specified consequently in release orders
issued against the contract when the customer requires them.
132. Define stock population. ↑
Stock population is the total of all stock management units included in an inventory
sampling. These stock management units are uniquely defined through the allocation of
the stock management levels to a given inventory sampling. As a result, the stock
population is also defined when you allocate stock management levels.

133. How is GR/IR account related to Inventory? ↑

If you are involved with inventory, then you need the GR/IR account (Inventory Account)
when the IR is posted. If you are not involved about inventory, then the system does not
need the GR/IR account when the IR is posted; the system needs a G/L instead of the
GR/IR account.

134. What is a special stock in material management? ↑

Special Stocks are the stocks which belong to a company code. These are not placed in any
storage location & no physical inventory is performed.

135. What is a One-time Vendor? ↑

A one-time vendor is the vendor who rarely or only once supplies the materials or articles
to your company. For such vendors, you do not need to create a separate master record
because the master records have no use after the business transaction is completed.
Therefore, you can collectively create a master record for all the one-time vendors.

136. What Is Lifo Valuation? ↑

LIFO is a balance sheet valuation technique. It stands for last in-first out principle, i.e. the
material added to the stock in last is valuated first. In this technique, the pricing of old
material in stock is not affected by the pricing of new material. In this technique, a layer of
stock increased or decreased is created for a fiscal year, on the basis of which the valuation
is done.

137. How to Determine Stock Value? ↑

The stock value of the materials is calculated using the following formula:

Stock value = Stock quantity * Material price.

138. What is the code for deleting a particular batch? ↑

The code for deleting a batch is MSC2N. Alternatively, if one flags the batch of the master
record then the batch record can be deleted completely.
139. What is production order and purchase order? ↑
A production order determines which material is to be prepared, at which location, and at
what time and how much quantity is required. It also defines which components and
sequence of operations are to be used and how the order costs are to be resolved.

A purchase order is a formal request or guidance from a purchasing organization to a

vendor or a factory to supply or provide a certain quantity of goods or services at or by a
certain point in time.

140. How can a Stock Transfer be monitored in Purchasing? ↑

A storage location is a unique four-character alphanumeric key; therefore, it cannot be
common for two plants.

141. How are User Defaults Set for Views? ↑

You can set user defaults for views by selecting Defaults->Views.

142. What is a Price Comparison? ↑

Perform a price comparison using ME49 and one may compare quotations from different
vendors.

143. What is movement in goods out (MIGO)? ↑

MIGO or Movement in Goods Out is used for goods movement such as goods issue, goods
receipt, plant to plant transfer, storage location to storage location transfer, etc. Basically,
MIGO is booked by the logistics department where the goods are actually received.

144. What is inventory management? ↑

Inventory management is used to manage the inventory for the goods. It is based on
several key processes. Definition of movement types, reservations, goods issue, and goods
receipt.

145. What do you mean by Physical Inventory? ↑

Physical inventory is the recording of actual stock levels (quantities) of materials by
counting, weighing, or measuring at a given storage location at a specific time.

146. How do you check Stock Requirement List in SAP system? ↑

This is used to see current stock and planned receipts. Use T-code: MD04. Enter Material
and Plant to see list.
147. What is MRP run in SAP system? ↑
MRP run or planning run is an engine which is used to fill demand and supply gap. Issues &
Receipts are called MRP Elements. Issues include PIRs, Dependent Requirements, Order
Reservations, Sales Orders, Issuing Stock Transfer Orders, etc. and receipts include
Production Orders, Purchase Requisitions, Purchase Orders, Open Production Orders,
Receiving Stock Transfer Order, Schedule lines, etc.

148. What Is Movement Type? ↑

While implementing the goods movement in an organization, the movement type is
required to be entered. It is a three-digit identification key that is entered as per the
movement type. The following are the common movement types that are used in SAP:

• 102: Goods that are receipt against a purchase order

• 201: Goods that are issued
• 321: Goods released from quality inspection stock
149. What is a request for proposal (RFP)? ↑
RFP or Request for Proposal is a document which requests a proposal, which is generally
made through a bidding process by an agency or a company for the acquisition of some
commodity, asset, or service to any potential suppliers to submit business proposals.

150. What is essential for creating a record of purchase information? ↑

The essential information for making a record of purchase information is as follows The
number of the material, the part number of the manufacturer, the number of the vendor,
the level code of the organization.

151. Define consignment stock. ↑

During the consignment process, when a vendor provides material or goods, the company
stores it in their stores. The vendor remains the owner of the material until a customer
takes it. The liability arises as soon as the material is removed from the stores.

152. Can we receive the goods before the scheduled delivery date in scheduling
agreement? ↑
No, we cannot receive the goods before scheduled delivery date. GR can be posted on or
after the scheduled dates. Though, SAP has provided some OSS notes to resolve this.
(708973, 741385)
153. What is Quota Arrangement in SAP system? ↑
A particular material can be procured from different vendors depending upon the
requirement. So, total requirement of a material is distributed to different vendor’s i.e.
quota is assigned to each source of supply. This is known as quota arrangement.

154. What is a Batch? ↑

A batch is a group of materials combined together quantity-wise for various reasons. Very
often, the materials with the same characteristics and values are grouped into a batch. For
example, in a chemical industry, a certain number of containers of a specific product may
be considered a batch as these products were produced at the same time and have the
same physical and chemical characteristics.

155. What is movement type and mention a few standard movement types? ↑
Movement types are used as indicators of what is the purpose of the goods movement (e.g.
from the storage location to a storage location, receipt from the purchase order, issue for
the delivery, receipt from production).

156. What is the Transaction Code to create a Material Type? ↑

MOS2 is the transaction code to create a material type.

157. How to delete a Batch? ↑

You can delete a batch by using the MSC2N transaction code. You can delete a batch record
by flagging the batch master record. For this, you need to first select the batch in the
Change mode.

158. What is Master production schedule (MSP)? ↑

It is a plan for individual commodities to be produced in each time period such as staffing,
production, etc. It is mostly linked with manufacturing in which the plan denotes when and
how much of each product will be demanded.

159. What is the process order? ↑

Process Orders (PP-PI-POR) are the central component used for the accurate planning and
execution of process manufacturing. A process order represents the production of batches
(materials) in a production run or the rendering of services.
160. How can a Stock Transfer be monitored in Purchasing? ↑
A stock transfer can be monitored in Purchasing by using the following stock documents:

• Purchase requisition
• Stock transport order (STO)
• Stock transport scheduling agreement
161. How is a Class created? ↑
A class is a collection of the group of the characteristics for a particular object. You need to
enter the class name and a description for it and then select the group. After saving the
details, the class is created. Alternatively, you can use CL01 T-code for this purpose.

162. How do you check Quota Rating? ↑

Quota rating = (Quota Allocated Quantity + Quota Base Quantity)/Quota

163. What are the different Stock transfer types in SAP system? ↑
• Inter Company

• Intra Company
• Intra Plant
164. What is the difference between MRP and CBP? ↑
In material requirement planning, the prediction of material requirement is based on sales
and operations planning while in, consumption-based planning the prediction of material
requirement is made, based on historical demand for materials.
 Master Data in SAP MM

1. What is Master data in MM module?

The master data in the MM module acts as reference data, defining various business entities
and playing a key role in the core operation of the business.
2. How is master data important in MM module?

The master data in the MM module contains all of the basic information needed to manage
material. The data is stored and sorted on the basis of different criteria, such as the descriptive
nature of the material (size, dimension, and weight) and the control functions of the material
(material type and industry sector). Apart from data maintained by the user, the master data
also stores data that is automatically updated by the system (such as stock levels).
3. What are the various types of master data in MM module?

The different types of master data in the MM module are as follows:

· Material master

· Vendor master

· Purchasing information record

· Source list
· Quota arrangement
4. What is a Material Master file?

A material master file stores and maintains all of the information related to managing a
material. The material master is sorted on the basis of different criteria.
5. Why are material master records used in SAP?

Material master records are used in the SAP R/3 system to manage material-specific data. The
material information stored in material master records is used by all logistics areas in the SAP
R/3 system. The material master records integrate all material-specific data into a single
database object that eliminates the problem of data redundancy. Because material master
records store data in a single database object, the same data can be shared by all departments,
such as purchasing, inventory management, materials planning, and invoice verification.
6. How is the information of material master records updated?

You can manually update the information in the material master records, however, there are
some exceptions for which the information can be updated by the SAP R/3 system only, for
example, administrative data.
7. What are the types of industry sectors defined in Material Master data?

· The different types of industry sectors defined in the material master data are as follows:

o Aerospace and defense

o Beverage

o Chemical industry

o Food and related products

o Mechanical engineering

o Pharmaceuticals

o Plant engineering/construction

o Retail

o Retailing

o Service providers
8. What data in material master is maintained at the client level?

The general data, i.e., the data applicable to the company as a whole, is stored at the client
level.
9. What are the data in material master that are maintained at the company code level?

The data that is specific to a particular company and the plant and storage areas assigned to that
company is maintained at the company code level.
10. What are the plant-specific data in material?

The MRP data and forecast data are the plant-specific data in the material master.
11. What is the lot size attribute of a material?

· The lot size attribute represents the reorder quantity for a material. A material can have a
periodic, optimum, or static (fixed) lot size.
12. How is material information structured in material master records?

Material information is structured in material master records on the basis of different criteria,
such as the material's master detail (including its name, size, dimension, and weight), which
shows its descriptive nature, and the material's detail related to control functions (such as
material type, price control, and industry sector). Material master records also store
information about the data that can be automatically updated by the system. For example, the
stock level can be automatically updated by the system on the basis of the material data update.
13. What is a batch?

A batch is a group of materials combined into one quantity for various reasons. Very often,
materials with the same characteristics and values are grouped into a batch. For example, in the
chemical industry, a specified number of containers of a specific product may be considered a
batch if they were produced at the same time and have the same physical and chemical
characteristics.
14. Why is batch record important?
· A batch represents a quantity of a particular material processed at the same time with the
same parameters. These materials, produced as one batch, have the same characteristics and
values, which may vary from the materials of another batch produced on the same day.

· A batch record is important because batch records indicate that the batch conforms to the
current Good Manufacturing Procedures (GMP). The batch record also contains specific
information about the product tested, analytical methods, and test results.
15. How to create a batch?

You can create a batch record manually by using the transaction code MSC1N. The navigation
path for creating a batch is: SAP Menu > Logistics > Materials Management > Material Master
> Batch > Create.
16. What are the important fields in a batch master record?

· The important fields in a batch master record are as follows:

o Production date— Refers to the date when the batch was produced.

o Self-life expiration date— Refers to the date when the life of the batch will expire.

o Available from— Refers to the date from which the batch will be available to other departments.

o Batch status— Allows the batch to be classified as having restricted or unrestricted use.

o Next inspection— Refers to the next quality inspection date of the batch.

o Vendor batch— Refers to the batch number assigned by the vendor.

o Class— Allows the user to sort the batch for use in specific classes.

o Characteristics —Helps in assigning a class to the batch.

o Release status —Specifies the status of the batch.

o Linked document —Helps the user to link the documents related to the batch.

o Document type —Allows the user who is purchasing the batch to specify a document.

o Document —Helps the user to select the relevant document.

o Document part —Allows the user to enter the part of the document that is related to the batch.

o Version —Specifies the document version of the batch.

17. How can batch records be changed?

· You can change a batch record by using the transaction code MSC2N. The navigation path
of changing the batch record is: SAP Menu > Logistics > Materials Management > Material
Master > Batch > Change.
· It is important to note that these changes to the batch record will also be available for review.
18. How to delete a batch?

You can delete a batch by using the MSC2N transaction code. You can alternately delete a
batch record by flagging the batch master record. For this, you need to first select the batch in
the Change mode.
19. What is Batch Information Cockpit?

The Batch Information Cockpit (BIC) is the main switching point, having a wide range of
options for scrutiny and control of batches. It stores at a single location all the information
related to the analysis of a particular batch.
20. What are the levels at which a batch number can be configured?

A batch number can be configured at several different levels: client level, plant level, and
material level. You can select a batch number at any of the following levels:

· Client level— When you configure a batch at the client level, you need to assign the batch
number only once throughout the whole client. Only one batch number exists for each
material assigned at this level.

· Plant level —In SAP, the plant level is the default level for the batch number. At plant level, a
batch number is unique for a plant and material. This means that you can have a batch of the
same number at a different plant within the same company.

· Material level —At this level, material numbers are assigned to the products. The material
number helps to differentiate between two products in case their batch numbers are the same.
The materials are identified by the combination of the material number and batch number.
21. How are batch numbers assigned?

The batch number is predefined in SAP. You can change the batch numbers either by using
the OMAD transaction code or by using the navigation path IMG > Logistics-General > Batch
Management > Batch Number Assignment > Maintain Internal Batch Number Assignment
Range.

Follow either of the two configuration steps to change the batch number:

· You can assign a batch number internally using the internal number range, either by using
the OMCZ transaction code or by following the navigation path Display IMG > Logistics-
General > Batch Management > Batch Number Assignment > Activate Internal Batch Number
Assignment > Activate Batch Number Assignment.

· You can also configure the system to allow automatic numbering of a batch by following the
navigation path Display IMG > Logistics-General > Batch Management > Batch Number
Assignment > Activate Internal Batch Number Assignment > Internal Batch Number
Assignment for Assigned Goods Receipt.
 22. What is a serial number?

A serial number is assigned to an item to identify it and to store information about it. A serial
number is mostly used to refer to equipment such as motors, drills, or vacuums. In MM, an
item of material contains a serial number as well as a material number. This combination helps
to uniquely identify an item of material.
23. What is a class type? How will you configure a class type?

· A class type is the SAP system's top-level unit, which is used to control the SAP system's
classes. It performs the following tasks:

o Defines the class objects

o Checks if class objects can be used in other classes or not

o Defines the class maintenance screen

· You can configure a class type by using the following menu path: SAP Customizing
Implementation Guide > Cross Application Component > Classification System > Classes >
Maintain Object Types and Material Types.
24. A material does not have a master record. How can we procure that?

There may be instances when a material does not have a master record. You can perform
different functions in different situations to procure the master record. For example:

· You can create a material master record if there is no material master record for a particular
material.

· You can extend the material master record if the material master record exists for a
particular material but the user department does not have the master data.

· You can also extend the material master record if the material master record exists for a
particular material and the user department has the master data but it has been entered in a
different organizational level.
25. State the importance of classification data.

Classification data allows you to search for materials on the basis of the characteristic values
entered into the classes. This feature is very useful when the customer wants to search for a
particular vendor and particular batches.
26. What is an ABC indicator?

An ABC indicator is an indicator assigned by the ABC analysis procedure. An ABC indicator
provides details of the consumption value of the material involved in the ABC analysis. The
ABC analysis is performed by multiplying the current price of the materials by their quantity.
The different consumption values are given as follows:
· A materials—Important parts, high usage/consumption value

· B materials—Less important parts, medium usage/consumption value

· C materials—Relatively unimportant parts, low usage/consumption value

27. What are the main master files used in MM?

The following are the main master files used in MM:

· Material master file

· Inventory master file

· Vendor master file
28. Give some example of master data in material management (MM).

Material master, material master general data (MARA), tax Classification material (MLAN),
info records, source list, and vendor master are examples of master data in MM.
29. How is the vendor created?

You can create a vendor by using the transaction code XK01 and performing the following
steps:

· Add the vendor name, company code, purchasing organization, account group, and vendor
address.

· Add the country, bank key, bank account, and the name of the account holder.

· Save the data.

· This creates a vendor record in the system.

30. What is vendor master data?

Vendor master data contains details of each vendor that supplies materials or services to an
enterprise. The vendor master data is stored in individual vendor master records consisting of
data, such as the vendor's name, the vendor's address, the currency used for the transaction,
payment terms, and the contact person's name (on the sales staff).
31. What are the different sections in vendor master data?

• Following are the three sections in vendor master data:

o General data— Provides general information about the vendor that can be
entered into the system for creating vendor records. General data can provide
the name, address, telephone, and fax of the vendor through specified search
terms. Additional information can also be added to the vendor master record by
the accounting and purchasing departments using the transaction code XK01.
 o Accounting data —Refers to financial information entered at the company code
level. The financial information includes tax information, bank details,
reconciliation account, payment terms, payment methods, and dunning
information. You can enter this financial data using the transaction code FK01.

o Purchasing data —Refers to data entered while creating a vendor at the

purchasing organization level. Different purchasing organizations have different
purchasing data. The purchasing data includes partner functions, purchasing
default fields, and invoice verification indicators. You can enter this data using
the transaction code MK01.
32. What are the different fields in vendor master data?

• The different fields in vendor master data are as follows:

o The name and address of the vendor

o The currency in which the transaction will be done

o The terms and conditions of payment

o The names of important contact persons

o The accounting information, such as the reconciliation account in the general

ledger
33. How do we create a vendor number range?

• When you create a number range, it is important to remember that vendor numbers,
such as material numbers, can be assigned externally or internally. You can create
vendor number ranges by selecting the following navigation path: IMG > Financial
Accounting > Vendor Accounts > Master Data > Preparations for Creating Vendor
Master Data > Create Number Ranges for Vendor Accounts.

• For configuring the vendor number range, you should enter a unique number for the
range, which is a two character field, and then specify the limit for the number range.
The current number field is used to define the current number. The Ext. field Specifies
whether the number range is defined externally by the user.

• 34. What is dunning procedure? How can it be configured?

• Sometimes, you may need to send a payment reminder or a dunning notice to a person
or an organization to remind them of their outstanding debts. The process by which the
system controls dunning is called dunning procedure. Dunning procedure can be
configured by using the FBMP transaction code or the following navigation path: IMG
> Financial Accounting > Accounts Receivable and Accounts Payable > Business
Transactions > Dunning > Dunning Procedure > Defining Dunning Procedures.
35. How do we assign material to vendors?

• Select the following navigation path to link vendors to materials: SAP Menu > Logistics
> Material Management > Purchasing > Master Data > Info Record > Create.
Alternatively, the ME11 transaction code is used for this purpose.
36. What is the transaction code to access the Materials Management Configuration menu?

• The OLMS transaction code is used to access the Materials Management configuration
menu.
37. What are the various transaction codes to access the MM configuration?

• The following are the various transaction codes to access the MM configuration:

Transaction Code Description

OLMD Accesses Material Management-Consumption Based Planning (MM-CBP)
OLMB Accesses Material Management-Inventory Management (MM-IM)
OLME Accesses Material Management-Purchase (MM-PUR)
OLML Accesses Material Management-Warehouse Management
OLMS Accesses the material master data
OLMW Enables valuation and account assignment

38. Write the names of some important MM tables

• The following table lists the important MM table names:

Table Name Purpose

EINA Used for general data of the (purchasing) information record
MARC Used in plant data for materials
EINE Used for purchasing organization
MAST Used for bills of material (BOM) link
MKPF Used for header material document
MAKT Used for material description
MARD Used in storage location data for material
MARA Used for general materials data
MBEW Used for material valuation

39. What are purchasing information records?

 • Purchasing information records, also known as info records, contain information
related to the material and the vendor who is supplying the material. They also contain
details about the material, such as the current price.
40. What are the categories of purchasing information records?

• The categories of purchasing information records are as follows:

o Standard—Contains information for the standard purchase order. In this type of

purchasing info record, you can create info records for materials and services
that do not have master records.

o Subcontracting —Contains ordering information for subcontract orders.

o Pipeline— Contains information on commodities that are sent through a

pipeline, such as oil or water.

o Consignment— Contains information on materials that are in the vendor's

possession and are kept by the vendor at some other premises at his own cost.
41. What are the prerequisites for creating a purchasing info record?

• The prerequisites for creating a purchasing info record are as follows:

o Material number —Before creating a purchasing info record, the material

number of the material master record should be known.

o Manufacturer part number (MPN) material number —Before ordering a

material that has an MPN, you must know its MPN material number.

o Vendor number —You should also know the number on the vendor master
record.

o Organizational level —If the purchasing info record is for a particular purchasing
organization or plant, then the code specific to that purchasing organization or
plant is required.
42. How can we create a purchasing information record?

• You can create a purchasing information record either manually or automatically by

setting the Info Update indicator when maintaining a quotation, a purchase order, or an
agreement.
43. Can a purchasing info record be created without a material number?

• Yes, you can create a purchasing info record without a material number. If the material
does not have a material number, you will need the following information to create the
purchasing info record:

o Material short text

 o Order unit

o Material group

o Short term key

44. How can we create an information record based on the material master?

• First, you need to create the info record by selecting SAP Menu > Master Data > Info
Record > Create. Enter details such as vendor number, material number, purchase
organization, or plant number. Then enter the number of the information record (in
case of external assignments). Next, enter the general data for vendors, ordered
quantity, origin of data, supplying information, and customs tariff number. Then enter
the planned delivery time, purchasing groups, and standard purchasing quantity. Check
the control data and take the default value of tolerance data and the purchasing group
from the material master record. Finally, enter the net price and then select Go To >
Texts to display the text overview. If the PO text is already defined, it appears in the
material master record; otherwise, it needs to be entered. After all these entries have
been made, the record is saved.
45. What is the document management system (DMS) in SAP?
• The DMS in SAP helps you store external documents, such as pictures of the goods or
material. By using the DMS, you can set the maximum size of the picture that can be
uploaded in a document. The DMS helps to link these external documents with the
appropriate SAP objects.

4. Procurement and Purchasing in sap mm

1. What are the special stocks used in MM?

• Special stocks are stocks that are managed separately regardless of whether they belong
to your company. The company manages a material by using a data record, which
contains all the required information. The different types of special stocks are as
follows:

o Sales order stock

o Returnable packaging with customer

o Consignment stock at customer

o Vendor consignment stock

o Returnable transport packaging

o Subcontracting

o Pipeline
 2. What are the differences between company-owned special stocks and externally-owned
special stocks?

· The differences between company-owned special stocks and externally-owned

special stocks are listed in the following table:

Company-
Company-Owned Special Stocks Externally-
Externally-Owned Special Stocks
Stocks that belong to the company but are Stocks that belong to the wholesaler or
stored with the wholesaler or the the customer but are stored at the
customer are called company-owned company are called externally-owned
special stocks. special stocks.
Company-owned special stocks are Externally-owned special stocks are
managed at the production level. managed at the place where they are
stored.

3. Why is negative stock needed in an organization?

Organizations need negative stock when a material is shipped to a customer and production is
not confirmed or there is not enough stock to satisfy the requirement. The system still allows
the issuing of the material, and inventory shows a negative quantity of stock until the production
of the material is confirmed.
4. What are special procurement types?

In a normal purchasing system, the customer purchases the goods from the wholesaler/retailer
and the possession of the goods transfers from the wholesaler/retailer to the customer. This
might not be the case with special procurement types, where the transfer of goods may not
necessarily be from the wholesaler/retailer to the customer directly. For example, you might
order a good for a friend of yours, who, in turn, purchases the good from the
wholesaler/retailer and then transfers the good to you. The friend is the third party involved in
this process. Therefore, the possession of the good indirectly transfers to the customer. This
type of procurement is called the special procurement type. The special procurement type
defines the external procurement or in-house production of the material. The following list
shows the special procurement types available in the SAP system:

· Consignment

· Subcontracting

· Stock transfer using the stock transport order (STO)

· Production in another plant

· Third-party processing

· Returnable transport packaging

· Pipeline handling
5. Define consignment stock. What are the main features of consignment stock?

Consignment, in a general sense, is the act of holding the ownership of materials but storing the
materials at some other premises until the materials are sold or shifted somewhere else. The
stored materials are known as consignment stock in the SAP system. Therefore, stock that is
stored at the customer's premises but is the supplier's property until the stock is transferred to
the customer's stock list is called the consignment stock. The main features of the consignment
stock are as follows:

· You can combine the consignment stock with your available stock at any point in time.

· You can evaluate the consignment stock in any currency.

· The price of the consignment stock fluctuates. This means that you can determine the price
of the consignment according to the market conditions.

· You can price the consignment stock in any unit.

· You can use different features of purchasing, such as discounts, in the consignment stock.

· The consignment stock is evaluated at a price quoted by different vendors.

6. How is the pricing of consignment stocks done? What information does consignment
info record contain?

· Prior to ordering a material from a vendor or posting a goods receipt to the consignment
stock, you need to obtain the consignment price. If the consignment material is ordered from
several vendors, the system maintains the consignment stock of each vendor separately. The
reason the system maintains the consignment stock separately is that the price of the
consignment stock may vary from one vendor to another.

· The consignment information (info) record contains the consignment price required for the
purpose of material valuation and accounting.
7. How are the consignment stocks created?

Consignment stocks are created in the normal purchase order (PO) or requisition, but the
main thing to consider is that you must enter the K category for the consignment item. As a
result, the goods issued are posted to consignment stores and the invoice receipt is not
generated.
 8. Define the consignment cycle?

· Consignment cycle is similar to the purchase cycle, except that when you create goods
receipts of the consignment stocks, only quantity (QTY) is updated and no accounting
documents are created. Once the goods are utilized, consignment is settled. The value of the
consumed or issued consignment stocks is taken from the active purchase info record.
9. How is consignment material procured?

Consignment material is procured through purchase requisitions, POs, and outline agreements.
10. How can we see the consignment stocks in SAP?

You can see the consignment stocks in SAP by using the following functions:

· Display consignment info record

· Display the stock overview

· Display consignment stocks

11. How can we take consignment stocks into our own stock?

You can take consignment stocks from the vendor into your own stock by performing the
following steps:

· Select Goods Movement > Transfer Posting to display the initial screen.

· Enter the plant name and the location where you want to store the materials.

· Select Movement Type > Transfer Posting > Consignment > Consignment to Own.

· Select Continue to display the collective entry screen.

· Enter the name of the vendor, the materials, and the quantity of materials.

· Enter the receiving storage location if you want to store the materials in another storage
location.
· Post the document. This makes the vendor liable to change the storage location of the
materials.
12. Can we do the physical inventory check of consignment stocks?

Yes, you can do the physical inventory check of consignment stocks. To do the physical
inventory check, perform the following operations:

· Create a physical inventory document

· Enter the physical inventory count

· Post the inventory differences
13. How can you do invoicing in case of consignment stocks?

You can invoice in the case of consignment stocks by performing either of the following:

· Invoice with PO

· Invoice without PO
14. What do you mean by subcontracting?

Subcontracting can be defined as the processing of materials by an external supplier.

15. How is subcontracting used in case of MM?

Subcontracting is the process by which the vendor receives the materials to produce the end
product. Subcontracting involves the following procedures:

· You order the end product by using the subcontract order. The components that the vendor
needs to manufacture the end product are mentioned in the PO.

· During the inventory management process, the components are posted to the stock of
material provided to the vendor. Later, the components are supplied to the vendor.

· The vendor then processes the service and delivers the materials ordered. The consumption
of the components is posted.

· If, after posting the goods receipt, the vendor notifies you that the quantity of the
components actually consumed is different than planned in the PO, you must make an
adjustment.
· The vendor then charges for the service, for which the invoice is posted in Invoice
verification.
16. What information does the subcontracting info records contain?

A subcontracting info record consists of ordering information related to subcontract orders.

For example, if you entered into a contract with an outside source for the assembly of a
component, the subcontracting info record would contain the price specified by the vendor for
the assembly work.
17. How do we create subcontracting PO?

· Perform the following steps to create a subcontracting PO:

o Enter the material to order and the category of the item for subcontracting (L) in the order
item.

o Press the Enter key to display the screen for component processing.
o In the component processing screen, enter the components required by the vendor to
manufacture the ordered material (end product). When entering the components, you need to
take care of the following points:

o You do not need to enter the date required for the components. The system proposes this date
when you press the Enter key. It is calculated as follows:

§ Delivery date of the item (planned delivery time)

o If you do not wish the quantity of the components to be altered, even if the order quantity of
the end product is changed, then set the indicated field to fixed quantity.

o If you want to allocate a particular batch of the component to the vendor for the manufacture
of the ordered material, enter the desired batch.

o To determine whether or not the components are available on the date required,
select Component List > Component Availability.

o When you enter a bill of material as the material in the subcontract order, the components are
automatically created.

o You can also determine the components in the bill of material at a later date (for example, if
the bill of material is subsequently changed) by selecting Item > Go to > Components > New
BOM Explosion. The existing entry of the components is removed and again determined in
the bill of material.

o Save the PO.

· When you print the PO, the components are printed per order item.

18. How can we view the stocks provided to vendor?

The stocks of material provided to a vendor can be viewed by using the SC Stock Monitoring
for Vendor report. The report can be accessed by selecting Purchase Order > Reporting > SC
Stocks per Vendor from the menu. With this report, the current status of the stocks, planned
issues, and planned receipts can be viewed.
19. How are components (materials) provided to vendor?

The components, or rather the quantities of the components required to manufacture the end
product, are provided in the stock of material to be provided to the vendor. The stock of
material provided to the vendor is the total valuated stock that is available for MRP. The total
valuated stock is managed at the plant level, at the site of the vendor. This stock can be either
an unrestricted-use or quality-inspection stock. The unrestricted-use stock refers to the valuated
stock of a material that is owned by the company and does not have any restrictions on its
usage. The quality-inspection stock is intended to be used only for quality inspection. The
components can be provided to a vendor in the following ways:
· Posting the components from the unrestricted-use stock
· Receiving the components from another vendor

20. How are components consumed in case of subcontracting?

In subcontracting, the end product is ordered by using a subcontract order. The materials or
components required by the vendor to manufacture the end product are mentioned in the PO.
The components are posted to the stock of the material provided to the vendor during
inventory management. When the components are supplied to the vendor, the vendor
manufactures the end product and delivers it. At this point, the goods receipt is posted with a
reference to the subcontract order. The goods receipt also contains the posting of the
consumption of the components from the stock of material provided to the vendor. If the
components consumed by the vendor are more or less than that specified in the PO, an
adjustment needs to be posted to correct the consumption of components.

5. Inventory Management in SAP MM

1. Give an overview of Inventory management in SAP system?

Inventory management in the SAP system helps record and track stocks of materials. It also
involves the planning and documentation of all goods movements..
2. What tasks are covered under Inventory Management?

Inventory management is an important part of materials management (MM). Optimal

inventory management not only ensures an uninterrupted supply of the material at the required
time, but also prevents wasting items. MM covers the following tasks:

· Material stock management

· Planning, entry, and documentation of goods transfers from and to the inventory

· Physical stocking of items

3. What is Physical Inventory?

· Physical inventory is a process in which all the transactions related to the movement of goods
are stopped and the company physically counts inventory. It is required in financial accounting
rules or for placing an accurate value on the inventory for tax purposes.

4. What are the initial configuration steps for physical inventory?

The steps for purchase acquisition are as follows:
· Defining the default values for the physical inventory document

· Reporting batch inputs

· Recording tolerances for physical inventory differences

· Inventory sampling as well as configuration of cycle counting
5. What is the difference between managing stock by quantity and managing stock by value?

· Transactions that make changes in the stock result in stock updates that are recorded in real
time. At any point in time one can view the stock overview, which represents the current
situation at that time. That is the essence of stock management by quantity, and can applied to
the following stock types:

o Located in the warehouse

o Ordered but not yet received

o Located in the warehouse and reserved for a particular purpose

o Reserved for quality inspection

· The managing stock by value option reviews the stock materials qualitatively rather than
quantitatively. The valuatioNof stock is done either at the plant level or at the location level.
Updates that can be done when managing stock by value are as follows:

o The quantity and value for the goods movement

o The accounts that are assigned for cost accounting

o The G/L accounts for financial accounts, with automatic assignment of accounts

· The valuation area is the organizational level at which the stock value is maintained. It can be
either at plant level or storage level.

6. What are the special stocks in SAP?

Special stocks are defined as stocks that must be managed separately by a company. They can
be either company owned or external stocks. They can be categorized as follows:

· Consignment

· Subcontracting

· Stock transfer using stock transport order

· Third-party processing

· Returnable transport packaging

· Pipeline handling

· Sales-order stock

· Project stock
7. With which modules in SAP is the inventory management integrated?
Inventory management is an important part of the SAP MM module. The business activities of
an organization revolve around the inventory of materials, which serves as the input for the
manufacturing process or the inventory of prepared goods for delivery or sale. The material is
purchased from the appropriate vendors on the basis of requests from the materials
requirement planning (MRP) module. The delivered items are recorded as the goods receipt in
inventory management. The materials are then stored, either for delivery to the customer or for
manufacturing processes. Inventory management is integrated with other modules, such as
financial accounting (FI), sales and distribution (SD), production planning (PP), project system
(PS), and quality management (QM).
8. How is the inventory management integrated with MM?

· Inventory management is directly linked with the MM module because any movement of
goods to and from inventory happens under the MM module. MRP, purchasing, and invoice
verification are some of the MM components that are also linked with inventory management.
After material is ordered it is posted as a goods receipt with reference to the purchase order.
The actual data of the quantities are checked in the vendor's invoice.

9. What are the initial configuration steps for inventory management?

The steps for inventory management are as follows:

· Defining plant parameters

· Defining system message attributes

· Defining number assignment

· Defining goods issue, transfer posting, screen layout

· Maintaining copy rules for reference documents

· Setting up dynamic availability checks

· Confirming the negative items

10. What is Goods movement? What type of documents is created after goods movement?
Goods movement refers to the movement of stock. This movement of stock could be either
inbound from the vendor, outbound to a customer, between different plants, or even between
different stocks within a plant. After goods movement, the SAP system creates two types of
documents: material documents and accounting documents.

11. What are the goods movements that take place in MM?
The goods movements can be defined as the physical or logical movements of materials that
lead to a change in stock levels or results in material consumption. The goods movements are
part of the MM policy. The goods movements in SAP are as follows:
o Goods receipt— Represents the physical movement of goods or materials into the company. It
increases the stock quantity. The goods receipt can be of the following types:

§ Goods receipt with reference to a purchase order

§ Goods receipt with reference to a Production order

§ Goods receipt without reference

o Goods issue— Represents the physical movement of goods or material ouTof the company.
It reduces the stock quantity. The goods issue can be of the following types:

§ Goods consumption in the company

§ Goods delivery to customers

o Stock transfer— Represents the movement of materials from one location to another location.
The locations can be either within the same plant or different plants.

o Transfer posting— Represents the stock transfer that can either be physical or logical. In logical
stock transfers, goods are transferred only in records, while the actual stock transfer does
noToccur. Some examples of physical stock transfer are:

§ Stock transfer between two storage locations in a plant

§ Stock transfer between two plants

§ Transfer of materials to customer consignment stock

· Some examples of logical stock transfer are:

o Release of materials from stock in quality inspection

o Transfer of materials from vendor consignment stock to own stock

o Batch splitting

o Transfer posting material-to-material

12. What is Goods Receipt & Goods Issue?

· Goods receipt is the process that enables the receipt of material from a vendor or from the
in-house production process. There are other types of goods receipts in SAP that include initial
stock creation. The goods receipt process also increases stock due to one of the following
processes:

o Receipt of production order

o Receipt of purchase order

o Initial inventory entry

o Others

· Goods issue is a process in which the stock in the warehouse is reduced due to any of the
following reasons:

o Shipment to a customer

o Stock withdrawal for a production order

o Return of materials

o Material required for sampling

o Scrapping of materials

13. Why is goods receipt important to a company?

Goods receipt indicates a receipt or inward movement of stock of materials or goods. When an
external vendor provides stock to the company, the goods receipt is generated as a purchase
order, and when the material is produced in-house, the goods receipt is generated as a
production order. A goods receipt is important to a company because using a goods receipt
moves material into stock, updates the stock levels, and thereby indirectly enables the
production process

14. How is a goods receipt performed?

· The steps to perform a goods receipt are as follows:

o Enter the header data.

o Select the movement type and the purchase order number.

· The document is posted in the database.

15. How do you post the goods if the PO number is not known?
If the purchase order number is not known, you must enter search criteria for the purchase
order in the initial screen. As a result, the list of purchase orders is displayed. The desired
purchase order items can then be copied.
16. How is the vendor returned processed without a purchase order reference?

· You first need to observe the Return column and then select Item Detail > MIGO_GR >
Goods Receipt for Purchase Order. If the intention is to deduct the stock, then movement type
161 is used; otherwise, 162 is used to undo the changes. Lastly, you must ensure that the
document is a return purchase order. The document is then saved.

· Alternatively, you can use the M21N transaction code for this purpose.
17. What happens when a goods receipt is posted?

While posting a goods receipt, the following events occur:

· The material document is created.

· The accounting document is created.

· Three printed versions of goods receipt notes are modified.

· The stock level changes.

18. What is the result of goods movement?

The following events are initiated when goods movements take place:

· First, a materials document is generated, which is proof of the goods movements.

· Accounting documents are generated if the movement of goods requires a change in the
financial accounts.

· The stocks of the materials quantities are updated.

· The stock values in the material master are updated.

· Financial and material documents are updated.

SAP MM Certification
Questions, Answers, and
Explanations

Don’t be bamboozled!
 SAP MM INTERVIEW Q&A

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Part I: Conceptual
Question 1: What MRP procedures are
available in MM-CBP (Consumption Based
Planning)?

A: Various material planning methods are used in

MRP (Material Requirements Planning).

Reorder point procedure (VM)

Forecast-based planning (VV)
Time-Phased materials planning (PD)

These are specified in material creation (MM01)

under the MRP 1 tab.

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Question 2: Under what conditions are
“planned orders” created? What may
planned orders be converted to and how is
that conversion accomplished?

A: Planned orders are always created when the

system creates an internal procurement proposal.
In the case of vendor procurement, the MRP
Controller may create a planned order or directly
create a PR. The next step for a planned order is
to be converted to a PR so it goes to purchasing
and is to eventually become a PO. A planned order
can be converted to a PR using transaction code
MD14.

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Question 3: What are the organizational
levels of the Enterprise Structure in R/3?

A: The top level of the organizational plan is the

Client, followed by Company Code, which
represents a unit with its own accounting, balance,
P&L, and possibly identity (subsidiary). The next
level down is Plant, an operational unit within a
company (HQ, Assembly Plant, Call Center, etc.).
The Purchasing Organization is the legally
responsibly group for external transactions. This
group is further subdivided into Purchasing Groups.

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Question 4: What are the different ways
to organize purchasing organizations?

A: A Purchasing Organization may be responsible

for multiple plants and this is referred to as
“Distributed Purchasing”. On the other hand,
“Centralized Purchasing” features one Purchasing
Organization per Plant.

A Purchasing Organization doesn’t necessarily need

to be assigned to a Company Code. This would
enable procurement for every company code as
long as buyers are acting for an individual Plant,
and that Plant is assigned to the Purchasing
Organization. Hence, a plant may be assigned to
more than one Purchasing Organization.

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Question 5: What are “Special Stocks”?

A: Special Stocks are stocks that are accounted for

but are not owned by the client, or are not stored
at a regular facility. Consignment, sales order, and
project stock are examples.

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Question 6: What are some of the options
available to transfer materials from one plant
to another?

A: Although it is possible to transfer materials

from one plant to another without a Stock
Transport Order, many advantages are lost
including entering a vendor number, planning a
goods receipt in the receiving plant, monitoring
process from PO history, and the ability to create
STO directly from a MRP PR.

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Question 7: What are some of the

common Stock Transport Order Movement
Types?

A: One step transfers of materials can be posted

using MT 301. Other various transport scenarios
differ in the MTs by the Goods Issues and Good
Receipts. Common Goods Issues may use MTs
303, 351, 641, or 643 in the STO. A STOs Good
Receipt often uses MT 101.

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Question 8: What is the difference

between a Purchase Order and a Purchase
Requisition?

A: A Purchase Requisition is a document type that

gives notification of a need for materials or
services. A Purchase Order is a document type
that is a formal request for materials or services
from an outside vendor or plant. Procurement
types may be defined at the line item and can be
standard, subcontracting, consignment, stock
transfer, or an external service.

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Question 9: What is an “indirectly
created” Purchase Requisition?

A: An indirectly created Purchase Requisition has

been initiated by CBP, the PS Project System, PM
Maintenance, and Service Management, or PP
Production Planning and Control. The “directly
created” Purchase Requisition, on the other hand,
is created by a person manually in the requesting
department specifying what materials/services,
units, and a delivery date.

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Question 10: What is an RFQ and how is
it different from the Quotation Form?

A: A RFQ is a purchasing document and an

invitation to a vender(s) for quotation regarding
needed materials or services. If multiple an RFQ is
sent to multiple vendors, the system can
automatically determine the best quote and send
rejection letters in response to all others. The RFQ
and the Quotation Form are one in the same in the
system as vendor’s quotes are entered directly in
the RFQ.

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Question 11: What are the transactions
that will result in a change of stock?

A: A Goods Receipt is a posting acknowledging the

arrival of materials from a vendor or production,
which results in an increase in warehouse stock, a
Goods Issue which results in a reduction in stock,
or a Stock Transfer moving materials from one
location to another.

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Question 12: When would it be prudent
to post goods movements via the Shipping
Application?

A: If picking, packing, and transportation

operations need to be planned in detail. Also, in
shipping, you can manage movements like returns
from customers, vendors, and returns to stock.
Movement Types in shipping start with a 6.

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Question 13: What is a Reservation?

A: A Reservation is a document used to make sure

that the warehouse keeps a certain amount of a
material or materials ready for transfer at a later
date. It contains information on what, quantity,
when, where from and to. Reservations help
effective procurement by utilizing the MRP system
to avoid out of/lack of stock situations.

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Question 14: Can you manually generate
a Purchase Requisition referencing a
Purchase Order or a Scheduling Agreement?

A: A Purchase Requisition cannot be created with

reference to either of these, as they are documents
controlled by the purchasing organizations.

Requirements can be automatically generated with

MRP that reference a Scheduling Agreement if the
source list is maintained for item-vendor
combination.

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Question 15: How is GR/IR account

related to Inventory?

A: If you are involved with inventory, then you

need the GR/IR account (Inventory Account) when
the IR is posted. If you are not involved about
inventory, then the system does not need the
GR/IR account when the IR is posted; the system
needs a G/L instead of the GR/IR account.

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Question 16: How do planned and
unplanned consumption affect Movement
Types?

A: In a customized Movement Type, you have

defined which consumption value gets posted in
the movement. Many will always be planned or
unplanned, but for some there is a dependency on
if the movement references a reservation. This
would be planned consumption.

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Question 17: What are Departmental
Views?

A: All functional areas of the system use the same

material master data. The material master data is
defined in individual screens (departmental views)
that can be added as needed. Thus a material can
be created with only basic data and other
departments can add other information later as it
becomes available.

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Question 18: Is Material Data valid for all
organizational levels?

A: Control of master data depends largely on how

each company sets up its Organizational levels -
centralized or decentralized. Some material data is
valid for all organizational levels while other data is
valid only at certain levels. (I.e.: client, plant, sales
org., etc.).

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Question 19: Why would you want to
create physical inventory sheets to perform
an inventory cycle-count on a material or
materials?

A: For a cycle counting procedure, physical

inventory documents need to be created. These
are used to record inventory levels of the material
being cycle counted.

Use transaction MICN. Click on the Execute button.

On screen “Batch Input: Create Physical Inventory
Documents for Cycle Counting”, perform the
following, Click on the Generate Session button and
Click on the Process Session button. This
procedure details how to create the physical
inventory documents for cycle counting in a batch,
rather than one at a time, based on certain criteria.
This would print physical inventory documents for
all material/batches that meet those requirements.

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Question 20: What is the difference
between a Blanket Purchase Order and the
Framework Order?

A: In general, the Blanket POs are used for

consumable materials such as office paper with a
short text, with item category B. There need not
be a corresponding master record, for the simplicity
of the procurement. The FO, Framework Order,
document type is used. Here, the PO validity
period as well as the limits are to be mentioned.
The GR, or Service Entry for the PO are not
necessary in the case of Blanket POs. One need not
mention the account assignment category during
creation of the PO. It can be U, or unknown and be
changed at the time of IR.

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Question 21: What is Release Procedure?

A: Release Procedure is approving certain

documents like PRs or POs by criteria defined in
the configuration. It is sensible to define separate
release procedures for different groups of materials
for which different departments are responsible,
and to define separate procedures for investment
goods and consumption goods.

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Question 22: If you have a multi-line
item PO, can you release the PO item by
item?

A: No, a PO is released at the header level

meaning a total release or “With Classification”.

PRs, on the other hand, have two release

procedures possible. “With Classification” as
described above, and “Without Classification”
where it is only possible to release the PR item by
item.

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Question 23: What is a Material Type?

A: A Material Type describes the characteristics of

a material that are important in regards to
Accounting and Inventory Management. A material
is assigned a type when you create the material
master record. “Raw Materials”, “Finished
Products”, and “Semi-Finished Products” are
examples. In the standard MM module, the
Material Type of ROH denotes an externally
procured material, and FERT indicates that the
relevant material is produced in-house.

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Question 24: What is a price
comparison?

A: Perform a price comparison using ME49 and one

may compare quotations from different vendors.

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Question 25: What is a Source List?

A: The Source List identifies preferred sources of

supply for certain materials. If it’s been
maintained, it will ID both the source of supply and
the time period. The Source List facilitates gaining
a fixed source of supply, blocked source of supply,
and/or helps us to select the proffered source
during the source determination process.

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Question 26: What are the various
“steps” in the MM Cycle from material
creation through invoice?

A: The following creates a rough picture of the

MM Cycle. Create material, create vendor, assign
material to vendor, procure raw material through
PR, locate vendor for certain material, processing
GR, goods issue, and invoice verification.

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Question 27: Give some examples of the
information relating to a material’s
storage/warehousing?

A: Some examples are Unit of Issue, Storage

Conditions, Packaging Dimensions, Gross Weight,
Volume, and Hazardous Materials Number. Also,
there are various Storage Strategies information
and options.

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Question 28: What are the various
features of Consignment Stocks?

A: Consignment Stocks remain the legal property

of the Vendor until the organization withdraws the
material from the consignment stores. The invoice
can be due at set periods of time, for example
monthly, and it is also a configuration possibility
that the organization will take ownership of the
stock after a certain period of time. Consignment
Stock is allocated to the available stock because
the Consignment Stock is managed under the same
material number as your company’s stock.

The most important characteristic of Consignment

Stock is that it isn’t valuated. When the material is
withdrawn, it is valuated at the price of the
respective vendor. Before procuring the stock,
consideration should be given if one consignment is
coming from multiple vendors. If so, we can
manage all of them independently at the price of
the individual vendors. In the Info Record, we will
maintain three different prices for the same
material for three different vendors.

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Question 29: What is a Quotation?

A: Once a vendor has received an RFQ, the vendor

will send back a quote that will be legally binding
for a certain period of time. Specifically, a
Quotation is an offer by a vendor to a purchasing
organization regarding the supply of material(s) or
performance of service(s) subject to specified
conditions. The Quotation then need to be
maintained in the “Maintain Quotation: XXXX”
screens.

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Question 30: What is the Source List?

A: The Source List identifies preferred sources of

supply for certain materials. If the Source List has
been properly maintained, it will identify both the
source of a material and the period of time in
which you can order the material from the source.

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Question 31: What is an Invoice
Verification?

A: The Invoice Verification component completes

the material procurement process and allows credit
memos to be processed. Invoice Verification
includes entering invoices and credit memos that
have been received, checking accuracy of invoices
with respect to price and arithmetic, and checking
block invoices (these are the ones which differ too
much from the original PO).

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Question 32: What are the different
types of Invoice Verification?

A: Invoices based on Purchase Orders. With

purchase-order-based Invoice Verification, all of
the items of a purchase order can be settled
together, regardless of whether or not an item
has been received in several partial deliveries.
All of the deliveries are totaled and posted as
one item. Invoices based on Goods Receipts.
With goodsreceipt-based Invoice Verification,
each individual goods receipt is invoiced
separately. Invoices without an order reference.
When there is no reference to a PO, it is possible
to post the transaction directly to a Material
Account, a G/L Account, or an Asset Account.

You can park Invoices that reference POs and GRs

as well as Invoices with no reference in the system.
When you park a document or change a parked
document, neither substitution nor validation is
supported. The system only carries out these
functions after you actually post a parked
document.

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Question 33: Why would an organization
need to allow Negative Stocks?

A: Negative Stocks are necessary when Goods

Issues are entered necessarily (business process
reasons) prior to the corresponding Goods Receipts
and the material is already located physically in the
warehouse.

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Part II: Configuration

Related Questions

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Question 34: How do you create a
movement type? When will movement type
numbers be odd?

A: When prompted by a dialog box after an

activity, you copy a movement type. Select the
field “Movement Type” and “Continue”. In the
Define Work area, enter the movement type to be
copied in From: and the name your new movement
type in the To: field. Now choose Continue.
Choose the desired movement type you want then
choose Edit  Copy as and re-type the selected
movement type with the new type copy all
dependent entries and make sure to begin with a
proper prefix (9,X,Z). All control indicators are
copied to the new movement type. Review the
new movement type changing any necessary
controls. Reversal movement types are numbered
as the number type plus one. The reversal for
movement type 451 (Returns From Customer) is
452. As a last step before saving your settings,
add a copy the reversal movement type and enter
it in Reversal/follow-on movement types.

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Question 35: How do you adopt standard
settings for the Message Determination
Facility In MM-PUR?

A: The Message Determination Facility is by

default active and message determination schema
is supplied for all purchasing documents including
POs, PRs, RFQs etc.

All of the desired message types must be

maintained. Choose Master data  Messages 
Purchasing document  Create or Change from
the Purchasing menu. Add the message type and
pick the key combination. The key combination
decides the condition table where the condition
record is stored. Enter all needed items. Next
screen, create the individual condition records.
Using the menu options Goto  Means of
Communication, enter the proper peripheral, or
output for each message record. Save.

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Question 36: How do you set price
control for receipts (goods/invoice) telling
the system how to value stocks?

A: Transaction Code OMW1 allows you to set price

control to S (Standard Price) or V (Moving Average
Price).

Under Standard Price (S), the materials and

accounting documents are both valid. The one
with the lower value will be posted with a price
variance entry.

Question 37: How do you access the

Materials Management Configuration Menu?

A: Transaction Code OLMS has a host of options

that are not accessible through the IMG.

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Question 38: How are the various MM
configuration Transactions accessed?

A: Transaction Codes OLMD accesses MM-CBP,

OLMB accesses MM-IM, OLME accesses MM-PUR,
OLML accesses MM-Warehouse Management,
OLMS accesses Material Master Data, and OLMW is
the proper transaction for valuation and account
assignment.

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Question 39: What are some of the more
important Materials Management Tables?

A: EINA contains general data of the (Purchasing)

Information Record; EINE includes Purchasing
Organization of the same. MAKT is the Materials
Description table, MARA-General Materials data,
MARC-Plant Data for Materials, MARD-Storage
Location Data for Material, MAST-Material to BOM
Link, MBEW-Material Valuation, and MKPF-Header
Material Document.

Some of the tables that directly pertain to the

document types are T156 Movement Type and
T023/T024 Groups Material and Purchasing.

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Question 40: Can you add custom fields
to POs and RFQs?

A: Yes. You must add custom fields to the

customer including structures I_EKKODB and
I_EKPODB.

Create a project via CMOD for enhancement

MM06E005. Follow the documentation for
MM06E005, and create the sub-screens for function
group XM06 using transaction SE80. Add fields to
the appropriate screen. It is recommended that you
call the screen fields EKPO_CI-name or EKKO_CI-
name. This simplifies transferring data to/from the
screen. Put code in EXIT_SAPMM06E_018 to
transfer data from subscreen to structure
E_CI_EKPO. Put code in EXIT_SAPMM06E_016 to
transfer data from database to sub-screen using
structure I_CI_EKPO. In the PBO of the sub-screen,
do any processing to make fields display only, or
hide them. If you need values from the main
screen to make decisions in the sub-screen, define
variables in the global data part of the function
module, and fill the variables in
EXIT_SAPMM06E_016 (PBO of main screen) Make
sure everything has been activated like user exists,
screens, etc.

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Question 41: Where can you dictate how
Planned Orders are converted into
Requisitions in MRP?

A: Look at the Transaction Code OPPR indicator.

Assign proper indicator.

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Question 42: What SAP program is used
to update or create Material Master Records?

A: RMDATIND is used to update Material Master

Records and can be used for such assignments as
extending all materials to a new plant.

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Question 43: What Views are possible
for a material?

A: The material type selected controls the views

possible for material.

For a material to be used in the system it needs to

be created for each plant. Multiple views of a
material are possible but at a minimum, the
material needs to have a description and a base
unit of measure assigned on the basic data view.
Additional department views (i.e. Accounting,
Sales, Purchasing, MRP, Warehouse) can be added
at a later time by extending the material. As
additional plants are added, a material will need to
be extended to the plants before it can be used
there.

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Question 44: When can a Production
Resource/Tool be defined as a material?

A: A Production Resource / Tool can be defined as

a material if purchasing and inventory functions are
to be carried out for that PRT.

The information required to be input is dependent

upon which department views are being created.
Thus, material master information is typically
entered at different times by numerous system
users. Note that to add a view, the “Create
Material” transaction is used rather than the
“Change Material” transaction.

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Question 45: When creating a new
Material, what may prompt some of the
possible Material Types?

A: Pressing F4 gives a list of choices. Select the

material type for the material you are creating. For
example, FHMI for Prod. Resources/tools, ROH for
Raw Materials, FERT for Finished Products, etc.

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Question 46: How do you determine
which views of a material need to be added
or to see which plants a material has been
extended to?

A: You can use transaction MM50.

To extend a material to a different plant requires

selecting the new plant on the organizational level
screen. Note that all views of a material are not
extended unless they were selected on the initial
screen. In addition, each plant may have a
different system configuration requiring additional
inputs on each of the departmental screens.
Material changes made in one plant do not change
that material in other plants.

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Question 47: How can you set user
defaults for views and organizational levels?

A: The user defaults for views can be set under

Menus: Defaults  Views. Select those views to be
checked on by default when generating a new
material. Select ‘View selection only on request’
when the select view pop-up is to be by-passed
unless selected.

For organizational levels, Menus: Defaults 

organizational levels. Enter those organizational
levels to be defaulted when generating a new
material. Select ‘Org. levels/profiles only on
request’ when the select view pop-up is to be
bypassed unless selected.

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Question 48: What needs to be present
in order for Material Type to be automatically
copied from one view to another?

A: When creating any view, the Industry Sector

and Material type will be automatically copied from
an existing view, so long as at least one view
exists.

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Question 49: How do you create a
document/e-mail notifying your supplier or
internal personnel when an invoice plan is
settled?

A: The IMG setting is Material Management 

Logistics Invoice Verification  Message
Determination.

If these settings are not made, the message

“Invoicing Plan: No Message Was Found for Partner
XXX, Company Code XXX”. If the notifying
documents are not required, simply turn off the
message by changing the message from “error” to
“information” using Material Management 
Logistic Invoice Verification  Define Attributes of
System Messages.

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Question 50: How can one keep users
from using standard MM Movement Types?

A: Standard Movement Types should not be

deleted from the system. The account
assignments, however, may be deleted for a
particular Movement Type in table T030 using
transaction OBYC.

Another way to achieve the same result is to enter

Movement Type in transaction OMJJ. Remove
MBXX from allowed transactions.

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Question 51: How do you define a
Release Procedure for PRs and POs?

A: Use Transaction ME54 and ME28 respectively.

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Question 52: How do you Change
Characteristic?

A: Use Transaction Code CT04. Follow these

steps: Format (numeric, character, etc.), Unit of
Measure, Templates, Required Entry, Intervals as
Values (?), descriptions for texts for characteristics
and characteristic values, display options for
characteristics on the value assignment screen,
Allowed Values, Default Values that are set
automatically on the Value Assignment Screen.

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Question 53: How do you create a Class?

A: Class is defined as the group of characteristics,

which can be attributed to a product. Use
Transaction CL01. Enter the value for the Class
name and a small description. Select the group
from it. The values on the different tabs are not
mandatory, so you can skip the values if you wish
or you can go to any extent needed. Save, and the
Class is created.

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Question 54: How do you configure the
Release Procedure?

A: Use Transaction OMGQ.

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Question 55: Will ROH have a sales
view? Will FERT have a purchasing view?

A: They shouldn’t because ROH type materials are

procured from the outside not sold and FERT type
materials are created inside and aren’t procured.

In some special cases, we have to sell raw

materials (ROH) and buy finished goods (FERT)
from outside sources. The views must be extended
in these cases using transactions OMS2 and MM50.

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Question 56: Where do we create Vendor
Account Groups, or screen layout in Vendor
Master?

A: Using SPRO, Financial Accounting  Accounts

Payable/Receivable  Vendor Accounts  Master
Records  Preparations for Creating Vendor
Master Records  Define Account Groups With
Screen Layout (Vendors) or Define Screen
Layout Per Activity.

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Question 57: What are the key fields for
the Material Master?

A: Material Groups, External Material Groups,

Divisions, Material Status, Labs & Offices, Basic
Materials, Storage Conditions, Temperature
Conditions, Container Requirements, and Units or
Measure Groups.

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Question 58: What are the main
Purchasing Tables?

A:
EKBN Purchase Requisition
EBKN Purchase Requisition Account
Assignment
EKAB Release Documentation
EKBE History of Purchase
Document

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Question 59: How do you create a
material?

A: Use Transaction Code MM01. Name the

material, choose an industry sector, choose a
material type, create or copy the views, add a basic
description, give it’s attributes/values, MRP
information, reorder point, accounting valuation,
warehouse management information and then save
the data.

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Question 60: What are some of the data
points provided by Purchasing for a material?

A: Some of the key inputs when creating a

material are Base Unit of Measure, Purchasing
Group, Reminder days, tolerance levels, shipping
instructions, GR processing time, JIT schedule
indicator, Critical part (?), etc.

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Question 61: What are the Lot Size
attributes a material can possess?

A: Lot Sizing dictates the reorder quantity for a

material. A material can have a static, periodic,
optimum, or fixed lot size.

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Question 62: How do you create a
Vendor?

A: Use Transaction Code XK01. Add the Vendor

name, Company Code, Purchasing Organization,
Account Group, and the Vendor address. Next add
the country, Bank Key, Bank Account, Account
Holder (an actual name), and then save the data.

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Question 63: How are materials assigned
to vendors?

A: Information Record links materials to the

vendor, thus facilitating the process of selecting
quotations. Use Transaction Code ME11 or
Logistics  Material Management  Purchasing
and then Master Data  Info Record  Create.

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Question 64: What data does the
Information Record contain?

A: The Information Records has data on Units of

Measure, Vendor price changes after a certain
level, what materials have been procured by a
specific vendor, price and conditions for relevant
Purchase Organization, Tolerance limits for
over/under delivery, Vendor evaluation data,
planned delivery time, and availability time the
vendor can supply the material.

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Question 65: How do you create the
Information Record based on the Material
Master record?

A: In the IMG, Master Data  Info Record 

Create. Enter Vendor Number, Material Number,
Purchasing Organization or Plant Number. Enter
the number of the Information Record if external
number assignments are used (left blank, the
system will assign a number). Enter the General
Data for the Vendor, order unit, origin data, and
supply option, Customs Tariff Number. Next, enter
the Vendor’s planned delivery time (used for
scheduling), responsible Purchasing Group, and
Standard PO quantity (used in conjunction with
price scales for price determination). Check the
Control Data. The tolerance data and the
responsible purchasing group are taken as default
values from the Material Master record. Enter the
net price. Now, from the top of the screen Go To
 Texts to display the text overview. You can
enter the info memo or the PO text. If the PO text
is already defined in the Material Master record, it
appears as a default value. Save the record.

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Question 66: What are some of the initial
configuration steps for Purchase
Requisitions?

A: Define Document Types, Processing Time,

Release Procedure (with and without classification),
Setup Authorization Check for G/L Accounts, Define
Number Range.

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Question 67: When, in initial
configuration, why would you have to Setup
Stock Transport Order?

A: If it is required to carry out an inter-plant Stock

Transfer through SD, then this configuration is
required and must be carried out.

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Question 68: What are some of the initial
configuration steps for Inventory
Management?

A: Plant Parameters, Define System Message

Attributes, Number Assignment (Allocate document
type FI to transactions), Goods Issues, Transfer
Postings, Define Screen Layout, Maintain Copy
Rules for Reference Documents, Setup Dynamic
Availability Check, Allow Negative Stocks (?).

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Question 69: What are some of the initial
configuration steps for Physical Inventory?

A: Define Default Values for Physical Inventory

Document, Batch Input Reports, Tolerances for
Physical Inventory Differences, and Inventory
Sampling. Cycle Counting should be configured as
well.

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Part III:
Practical/Troubleshooting
Related Questions

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Question 70: How can you process
vendor returns without a Purchase Order
reference?

A: Use Transaction Code ME21N.

Look for the Return columns and click it at the item

details,
MIGO_GR , Goods Receipt for Return Purchase
Order Movement type will be 161 to deduct the
stock and 162 for reversal. Before saving, check if
there is a check in the Return Column to ensure
that it is a return Purchase Order.

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Question 71: How can an invoice be
verified?

A: Transaction Code OLMR may be utilized.

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Question 72: How do you change the
standard price in the Material Master?

A: The standard price in the Material Master can’t

be updated in a direct manner. A great way to
update it is to fill the fields Future Price MBEW-
ZKPRS and the Effective Date MBEW-ZKDAT for the
material on the accounting view. Next, go to
Logistics → Materials Management → Valuation →
Valuation Price Determination → Future Price →
Activate. TCODE MR2B, program RMMR2100.
Lastly, run the BDC that was created to update the
standard price.

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Question 73: How do you perform a
Goods Receipt?

A: Use Transaction MIGO. Enter the Header Data,

select the Movement Type, Enter the PO Number,
select the PO items to be copied, and then post the
document.

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Question 74: How can you post a Goods
Receipt if the PO number is not known?

A: If you selected PO Number Not Known in

Transaction MIGO, you can specify search criteria
for the POs on the initial screen. The system then
displays a list of purchase orders. Select and copy
the required PO items.

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Question 75: How do you display a list of

all reservations in the system?

A: Run report RM07RESL.

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Question 76: If you have created a

custom Movement Type and you get a “not
allowed” error, where should you first look
for the cause?

A: Using Transaction Code OMJJ, check “Allowed

Transactions” for the customized Movement Types.

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Question 77: How do you find the logical

value for stock item by date?

A: Use Transaction MC49.

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Question 78: How can you disable a

Reservation in MRP?

A: Use Transaction Code OPPI to check “block

stock”.

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Question 79: How do you add an
attachment to a Purchase Order?

A: One may attach any document to a PO

manually without using the Document Management
System in SAP, but no attachments can be added
while you create a PO using ME21N. Save your PO
and then open the PO using ME22N. There you
can attach a document with the Service for Object
button. Click the Service Object button  Create
 Create Attachment then select your window
directory, the file to be attached. This attachment
is only for internal information. The system will not
print this document automatically along with a PO
printout.

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Question 80: How do you generate an
automatic PO after creating a PR using a
particular material?

A: In MMR and VMR check Auto PO (MM02/XK02).

Maintain the Source List and select the indicator

for the source list record as MRP relevant (ME01).
If more than one source list record is generated,
make one of them fixed. Run MRP and the PRs
generated will be pre-assigned with the source of
supply (MD01). Enter ME59 for automatically
creating POs from PRs.

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Question 81: Where is the Header level
and Item level data saved in a PO?

A: In SE11, we can see this information in table

EKKO and EKP0 respectively.

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Question 82: Where is Material Master
data saved?

A: Tables MARA and MARC.

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Question 83: How do we know if a PO
has been issued?

A: Bring the Requisition up by using Material

Management  Purchasing  Purchase
Requisition  Display. Where the requisition
overview screen is displayed, select an item by
clicking on the selection box to the left of the item.
Click on the General Statistics icon on the
application tool bar. Select item. General Statistics
icon. The screen appears, in the middle, under
Order Statistics, in the field Purchase Order, if
there is no number the PO has not been issued.

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Question 84: What is the difference
between a PR with a Master Record and
without a Master Record for the material
being ordered?

A: If the master record exists, then all of the

information about the Source List, Information
Record, and Vendor Evaluation already exist in the
system. If we don’t have a Master record for the
material we are ordering, the material is generally
being ordered for direct usage or consumption.
You can specify which consumption account is to
be charged which is also known as Account
Assignment. For example, we assign the purchase
costs associated with a requisition to our sales
order or cost center.

If the first situation exists, many times purchasing

enters into a longer-term purchasing agreement
with a Vendor, which is called an “Outline
Agreement”. If the Outline Agreement is done,
then Purchasing cannot issue a purchase order
against a PR. It can only set up such an
agreement (either a “Contract” or a “Scheduling
Agreement”).

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Question 85: Can you change a Purchase
Requisition after it has been created?

A: Yes. Use Transaction ME52N. Check to see if

the PR has already had a PO issued against it. If
so, you must inform the Purchasing Group. Check
if the PR has been approved. If so, you may only
make changes to a limited extent and may be
subject of approval. Check if the PR was created
by MRP. In this case, you don’t have much control
over the modification process.

All changes to items are logged and stored.

Information stored includes when the information
was changed, who changed it, what the changes
were, etc. Select the desired item in the item
overview and choose Go To  Statistics 
Changes.

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Question 86: How do we create
Consignment Stocks?

A: Everything is the same as a normal PR or PO,

except: Enter the item category “K” for the
consignment item. This ensures that the Goods
Receipt is posted to the consignment stores and an
invoice receipt cannot be generated for the item.
Also, do not enter a net price.

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Question 87: What is Vendor Evaluation
and how do you maintain it?

A: Vendor Evaluation helps you select the Source

of Supply by a score assigned to a particular
vendor. The scores are on a scale of 1 to 100 and
are based on differing criteria. Use Transaction
ME61 and enter the Purchasing Organization and
Vendor Number.

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Question 88: What are the components
of the Master Data that details a company’s
procurement; used by, Vendor Evaluation for
example?

A: The key components of Master Data are: Info

Record (ME11), Source List (ME01), Quota
Arrangement (MEQ1), Vendor (MK01), Vendor
Evaluation (ME61), and Condition Type (MEKA).

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Question 89: How do we get a proper list
of vendors to send an RFQ?

A: Either use the Information Record to see who

has sold a particular material to the organization in
the past, or go through the Source List.

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Question 90: How do you create a Source
List?

A: Use Transaction ME01. Enter the Material

Number and the Plant Data. Enter source list
records, validity period, period of time material is
procurable, Vendor Number, responsible
Purchasing Organization (or number of the
Agreement or Contract), PPL (if the material can be
procured from another plant), Fixed Source (?),
MRP control.

Also, a check should be done to see whether any

source list records overlap. To do so, choose
Source List  Check.

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Question 91: How will items be returned
to the vendor?

A: When you are posting a Goods Receipt for a

PO, you can also enter items that you want to
return to the vendor. To do this, you no longer
have to reference the purchase order with which
the goods were originally delivered. From the item
overview, choose 161 (Return for PO) as the
default value for the Movement Type. Enter the
data for the return item(s) and post the document.

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Question 92: Where do you perform a
Goods Issue?

A: Use Transaction MIGO.

It is possible that when MIGO is accessed that a

different document screen appears than the one
required. This occurs because SAP remembers the
last Goods Movement transaction accessed per
user login. To reach the Goods Issue Purchase
Order screen, click the Dropdown Icon in the
transaction field and select “Goods Issue”.

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Question 93: How do you perform a
Goods Issue?

A: Use Transaction MIGO. On the initial screen,

enter the header data (you need not enter the
Movement Type or the Plant as these are
automatically copied from the order). Choose
Goods Issue  Create with Reference  To
Order… If you know the order number, enter it
directly. Using the By-products Indicator, you can
simultaneously post the Goods Receipt of planned
by-products. Using the Choose transaction/events
indicator, you can display all transactions/events
for an order and choose the transaction/events for
which you want to post a Goods Issue. Copy the
desired item(s). Check data on the overview
screen. Post the document.

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Question 94: How do you perform an
Invoice Verification?

A: If the Invoice refers to an existing document

(PO, etc.), then the system pulls up all of the
relevant information like Vendor, Material,
Quantity, Terms of Delivery, and Payment Terms
etc. When the Invoice is entered, the system will
find the relevant account. Automatic posting for
Sales Tax, Cash Discount, Corrections etc. When
the Invoice is posted, certain data such as Average
Price of Material and Price History are updated.
Use Transaction MIRO.

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Question 95: How do you display parked
documents?

A: There are two possible transactions to use

here. They are FB03 and FBV3. The first shows
all posted document types. This is the best choice
if you think the document has been posted to you
actual balance. The later shows only parked
documents that have not yet posted to your
expenditure balance. These documents are still
encumbrances. It is the best choice if you are
trying to find which documents are still awaiting
completion or approval.

This transaction is very similar to the FBV2

transaction used with P-Card reconciliation and
marking parked documents complete.

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Question 96: What do the W, V, and F
fields show about the status of a document
in FBV3?

A: An X under the W column means the document

is subject to Workflow. Most documents on this
screen should have an X in this column. However,
not all documents are subject to workflow (cash
deposits etc.). An X in the V column means that
the document has been marked as complete. If
they are subject to Workflow, they have been sent
to Workflow for approval when they were marked
complete. An X in the F column means that the
document has been approved and posted to
expenditures. This column will always be empty in
this screen.
An X under W, but no X under V means that you
have not marked the document as complete. If it
hasn’t been marked as complete, use FBV2 to check
the document and, if it is correct, mark it as
complete. You can quickly go to the document
from the list screen by double clicking on the
document number. When the document is
displayed, click on Document on the menu bar, and
then click on Change in the drop-down menu. The
transaction will switch from FBV3-Display to
FBV2Change. An X under both W and V will mean
it is waiting for approval and you may need to

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check the approval path to see if has met with a
delay.

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Question 97: If you are using
Transaction MRKO, vendor settlement, and
we get an error message (FS217 or M8443
etc.), how would you go about
troubleshooting this?

A:

(With this question, look for an answer that follows

a similar logic)
To troubleshoot this problem, we have these steps
to follow. Set up Output Condition Type “KONS”.
The Output Type specifies the kind of output to be
produced. The Output Type is predefined for your
area of the R/3 system. If alternative choices are
possible, you can, of course, list them by pressing
F4. The Output Type can specify, for example, a
printed form that you need for internal use or a
form that you want to send to a customer or
vendor (for example, an order confirmation). The
Output Type can also be an internal electronic mail
message that you want to send to staff in another
department. To create an Output Type, we use
Transaction V/30. Click on New Entries; go to
where you can define a new Output Type (i.e.
KONS). Once you have fed all of the data in the
screen you can save it and we will have a new

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Output Type. Now, use Transaction MRM1 where
we will maintain conditions for the Output Type
KONS. When you press the Key combination tab,
you go to the “Create Condition Records
(Consignment): Fast Entry” screen. Here you
define the Company Code, partner etc. Hit the
save button. Now you have conditions associated
with the Output Type KONS. Now, we must
maintain the appropriate Tax Code in the
Information Record. Use Transaction ME12. Be
sure Info Category is consignment. Hit <Enter>
and you will go to the screen “Purch. Org. data 1”.
Hit <Enter> again and you will go to the next
screen where you need to maintain the Tax Codes.
Put in Tax Code “I0” which means exempt. The
next step would be to go to the G/L Account and
update the “Tax Category” using Transaction FS00.
“Drop down” the box for Tax Category and you will
get some options. Choose the first option “-“ Only
Input Tax Allowed. Hit Save. The next step, go to
check the “Field Status Compatibility at G/L
Account”; use Transaction SE38. Now, enter the
program number “RM07CUFA” and hit “Execute”.
Now enter Movement Type “291 K” which is used
for the Goods Issue related to consignment. When
you press the Execute button, you will see screen
“Field Selection Comparison: Movement Type – G/L
Account”. Now, check the Compatibilities of all the
fields, if a particular is not compatible, then there
will be an Error message with a Red Highlight.

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Now the signs Plus, Minus, and dot denote whether
the entry in that particular field is “Required”,
“Optional”, or “Suppressed” etc. Now, the error
could be because of the following reasons: If the
Mvt column has a “+” and Account column has a
““; If the Mvt column has a “-“ and the Account
column has a “+”. Once you fix the value you can
go to the Error Log and see if there are any more
errors there. The last step would be to run
Transaction MRKO. Now, you get all of the “Not
Settled”, “Pending Transactions”, or Good Receipts
recently done. Then, go to the previous screen
and press the “Settle” tab and execute it again for
settling the documents. Now the transaction goes
through and the vendors are paid automatically. If
after doing this, we still get the error message,
then we could also go to Transaction OMRM and
change the error message to a warning message.
The other place to find the error messages is
Transaction SE31.

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THANK YOU

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