16 SAP Material Management Interview Questions and Answers

SAP MM, a Material Management module is operated by Systems Applications and

Module. A career in SAP MM has good scope in manufacturing and delivery firms as
they implement SAP MM to a large extent.
Before you apply for a SAP MM position, you must ensure that you have a thorough
knowledge of the business processes in material management.
We have put together a list of SAP MM questions that are asked in most of the SAP MM
interviews. If you are able to answer these questions successfully, consider yourself
ready for the interview.

1. What are the uses of SAP Material Management Module?

SAP Materials Management belongs to the logistics aspect of ERP. It mainly manages
the procurement activities of an organization.
It supports all material aspects of management like planning, controlling and so on.
It also incorporates key modules such as Sales, Distribution, Plant Maintenance,
Production Planning, Project and Warehouse Management.

2. What does the Procurement Process in ERP comprise of?

All activities involved in buying of materials and procuring services from various dealers
and vendors constitutes the Procurement Process.

3. Explain the Procurement Lifecycle.

• Information and requirements gathering
Collecting information about a product and its quantity is the first step of Procurement.
Then suppliers for that particular product who can cater to the requirements must be
then tracked down.

• Contacting suppliers

Once the suitable suppliers are chosen, they must be contacted for a quotation
request.

• Background Check

The suppliers history, quality of his previous products, terms of warranty, service and
maintenance must be investigated. Some samples may also be investigated if needed.

• Negotiation and Contract

Negotiations regarding price, delivery schedule and availability are done. After this, the
contract is signed that becomes a legally binding document between the supplier and
the company.

• Completing Order
The order is shipped and delivered to the concerned party and supplier is paid
accordingly. Any training for installation and use is undertaken.

• Maintenance

Once the product is in use, continuous evaluation and feedback are given.

4. What are the types of Basic Procurement?

There are two categories of basic procurement. They are:

- External and Internal Procurement

- Procurement for stock and Procurement for consumption

5. What are Consignment Stocks?

Consignment stocks are those materials that are in the store premises but still belong to
the vendor. If you use material from this stock, you have to pay to the vendor.
6. What are the different info record types?

The different info record types are Standard, Sub-contracting, Consignment and
Pipeline.

7. What is the purpose of Purchase Info Record?

Purchase Info Record is used to store the information about a vendor and the product
purchased from him.

8. Explain a Purchase Order.

The purchase order is the final draft of the document sent to the supplier to supply
material or services. It will contain information like details of material, purchasing
company, company code, vendor name and date of material delivery.

9. What is meant by Goods Receipt in SAP?

Once the purchase order is processed by the vendor, the delivery of materials is done.
This is called a Goods Receipt. In the goods receipt phase, the condition and quality of
the material received is verified.

10. What is meant by Request for Quotation (RFQ)?

Request for quotation is the invitation sent to vendors to send quotation stating pricing,
terms and conditions.

An RFQ has details about goods, services, date of delivery, quantity and date to be
submitted.
11. What is Material Type in SAP?

Material Type in SAP is the property used to group materials with similar properties
under one category.

12. Name the different stock types in the SAP system.

The different stock types in SAP system are restricted stock, unrestricted stock, quality
inspection stock, blocked stock and unblocked stock.

13. What do you mean by Outline Agreement?

This is an agreement made with the vendor that has all the terms and conditions of the
items purchased. This agreement has a date until it is valid.

14. What is meant by Material Master and how is it maintained?

Material Master consists of information regarding the raw material, finished product and
so on. This is used to identify purchase material, product, issue of goods, receipt of
goods, and other product information.

15. What is a Production Order?

A Production Order is used to define the material that is produced, the location of the
plant, time of production and quantity of goods needed.

16. What is a Contract?

A Contract is a long-term agreement between the customer and the vendor with regards
to material or services provided over a period of time. The two types of Contract are
Quantity Contract and Value Contract.

SAP MM Interview Questions and

Answers For Experienced
1. What is the difference between a Purchase Requisition and a Purchase Order?
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.

2. What MRP procedures are available in MM-CBP (Consumption Based Planning)?

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.

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

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.

4. How do we create Consignment Stocks?

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.

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

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.

6. What are the components of the Master Data that details a company’s 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), and Condition Type
(MEKA).

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

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.

8. How do you create a Source List?

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.

9. What are different Info Records types?

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

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

11. What is a consignment Stock?

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.

12. What is Sub-Contracting cycle in MM?

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.

13. What is meant by Scales in MM?

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.

14. How to Flag a material for deletion?

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.

15. 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.

16. What is the function of OBYC?

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.

17. What is valuation grouping code related to OBYC?

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.

18. What types of special stocks are available?

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

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

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.

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

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

21. What are release procedures with and without classification?

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.
22. What is meant by batches?
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.

23. How to handle free items in PO?

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.

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

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).

25. What is the use of Material types?

‘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.

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

27. What is a Material Type?

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.

28. What is a price comparison?

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

29. What is a Source List?

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.

30. What are the various “steps” in the MM Cycle from material creation through invoice?
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.

31. Give some examples of the information relating to a material’s storage/warehousing?

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.

32. What are the various features of Consignment Stocks?

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.

33. What is a Quotation?

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.

34. What is the Source List?

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.

35. What is an Invoice Verification?

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).

36. What are the different types of Invoice Verification?

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.

36. 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.

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

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.

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

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.

39. What is the ‘Price Control Indicator’?

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.

40. What are various types of Stock transfer?

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)

41. What are various Stock Types?

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)

42. What are various procedures for counting Physical Inventory?
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.)

43. 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.

44. What are the various stock valuation methods?

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.

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

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

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.

45. What is ‘Transaction Keys’ while setting OBYC?

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.
46. What is a Business Area?
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.

47. 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.

48. 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.

49. How to create Tax calculation procedure in MM?

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.

50. 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.

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

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.
52. What are the commonly used movement types in Sub-Contracting process?
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

53. What are accounting entries in standard sub-contracting process?

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.

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

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

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

56. What is a MRP Area?

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

Plant MRP Area

MRP Areas for Storage Locations

MRP Areas for Subcontractors

After defining MRP areas, MRP area is assigned to material in material master.

57. What is MRP list?

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.

58. How will items be returned to the vendor?

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.

59. Where do you perform a Goods Issue?

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”.

60. How do you perform a Goods Issue?

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.

61. How do you perform an Invoice Verification?

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.

62. How do you display parked documents?

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.

63. What do the W, V, and F fields show about the status of a document in FBV3?
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.
64. What MRP procedures in Consumption Based Planning?
MRP procedures in CBP are as follows:

Reorder Point Procedure

Forecast based Planning

Time phased material planning

65. What is the difference between standard purchasing organization and reference purchasing
organization?
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

66. Why do we use document types in SAP?

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.

67. 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)

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

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.

What is the use of ‘Info Update’ indicator in purchasing documents?

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

69. 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.

70. What is a ‘Return Delivery’?

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.

71. How to deactivate a vendor so that it cannot be used for further transactions?
A vendor can be blocked at various levels as follows:

All Company Code

Single Company Code

All Purchasing Organization

Single Purchasing Organization

72. 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.

73. What are basic tables used for Material Master?

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 link

74. What are the different ways to organize purchasing organizations?
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.

75. What are “Special Stocks”?

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.

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

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

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

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

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.

80. What is an RFQ and how is it different from the Quotation Form?
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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81. What are the transactions that will result in a change of stock?
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.

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

83. What is a Reservation?

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.
84. Can you manually generate a Purchase Requisition referencing a Purchase Order or a Scheduling
Agreement?

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.

85. 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.

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

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.

87. What are Departmental Views?

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.

88. Is Material Data valid for all organizational levels?

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

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.

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

91. What is Release Procedure?

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.

92. How do you create a movement type? When will movement type numbers be odd?
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.
93. How do you adopt standard settings for the Message Determination Facility In MM-PUR?
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.

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

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

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

96. How are the various MM configuration Transactions accessed?

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.

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

98. Can you add custom fields to POs and RFQs?

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.

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

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.

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

101. 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.

102. How are materials assigned to vendors?

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.

103. What data does the Information Record contain?

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.
104. How do you create the Information Record based on the Material Master record?
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

105. What is the difference between a PR with a Master Record and without a Master Record for the
material being ordered?
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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From Mindmagix
1. What is the difference between CBP and MRP?
The main difference between CBP and MRP

CBP MRP

When the materials are planned using this, the prediction When the materials are planned using this, the
for the required materials is done by past demand of the prediction for the required materials is done by
same materials. SOP which is sales & operation planning

Forecasting, planning which is time phased and reorder Since this is used for the planning of the future
point are used here everything depends on the size of the lot that
was previously given.
2. What do you know about SAP MM?
SAP has a functional module which is known as SAP MM. It looks after the management of the
material and obtaining handling. The module consists mainly about master data, configuration of
system and transactions to complete the procurement to pay process

3. Can you elaborate about SAP and how it is useful in Industries ?

SAP stands for Systems, Applications and Processing the Data. It is the most popular software
application used to provide enterprise business solutions. This ERP software application was first
introduced in Germany (Mannheim) in the year 1972. ERP stands as Enterprise Resource Planning.
It provides solutions by incorporating various business tasks like sales, purchase and production.
SAP obtains details from one business process and integrates it into another business process, thus
speeding up the business process. It is broadly used in industries, since it updates and process
important data very quickly and used by the department to determine how to prepare the products
and also it can program business process and provide real time solutions for business.
4. Can you explain the essential components in SAP MM?
To define the requirements, determination sources, selection of vendors, order processing, follow
up with the clients, receipts of goods and inventory management, verification of bills, payment
systems etc.

5. Do you know about organizational structure in the MM module?

The structure in the MM module is a ladder in which various organizational unis are arranged
designed according to the functions and tasks of each of them. The units that make the structure of
the organization are as given below.
The first is the client and this unit is independent. This unit has a different record system
and well as its own table sets. The second is the company code. This is one of the smaller
units of the organization. For the need of external report one can make a self-reliant
account sets for the unit of company code. The third is the plan. This is where the supplies
are formed and the services and goods are given. The industry can be broken down into
different plants based on maintenance, supplies, production, procurement etc. The next is
the location of the storage. The produced goods are kept in this unit. The next is the number
of the warehouse this shows the system of the warehouse. It is different for every area of
storage and organization. After that is the storage type which tells one the different areas
such as issuing area, area for picking up the goods etc. The next is the organization of the
purchasing which is the unit that negotiates with others for purchasing and also obtains the
services and the material. The next is the group purchasing which a code for an individual
buyer or a group who actually purchase the materials. This unit is also partially involved in
negotiating and obtaining the goods.
6. Explain in detail about order of purchase?
This is a final and formal confirmation of the essential materials to be supplied by the vendor to the
industry. This will involve the all the names of the essential materials with the equivalent plant. The
details of the purchase which would include the code of the company, vendor’s name, the delivery
date of the materials.

7. Why is record of the information of purchase useful?

It is essential because it collectsvarious informationon 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.

8. What are the important criteria in purchasing?

The important criteria in purchasing includes the following the unit of the order, the group of material,
the base unit, the group of purchasing, the validity, the indicator of tax for that material, the part
number of the manufacturer, and the manufacturer.

9. Elaborate on the goods receipt in the SAP System?

Once the purchase is processed by the vendor the material and goods are deliveredto the party that
ordered it and this process is known as the goods receipt. During this time when the material is
delivered the party that acquires it checks for the quality and the condition of the materials and
goods. After the verification the receipt is finally poster.

10. What is the code used for extension of the view of material?
The code used for the transaction of the material view is MM50.

11. 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.

12. 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.

13. 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.
14. 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.
15. 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.

16. What is the Material Requirement Panning and mention the code to access this list?
Material Requirement Planning is the first working manuscriptfrom where the controller of MRP
starts the work and it includes the planning of the information of the goods and materials. For
accessing a single item one can use the code MD05.

17. What is known as RFQ?

RFQ is an abbreviation for Request For Quotation. It is a kind of a form which is given to the vendors
for them to submit any quotation which is indicative of the terms and conditions and the price of the
goods and materials. It has details of the quantity of the goods, information about the goods, the
delivery date of when the form is to be submitted.

18. Explain what is 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.

19. What is the code used for reservation?

The transactional code used for reservation is MMBE.

20. What is CBP?

CBP essentially means the consumption value of the materials in the past. It is used to know about
the requirements in the future. Based on the consumption of the services in the past the average
requirement of the goods can be calculated.

21. 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.

22. How is quota rating checked?

The 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.
23. 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.

24. 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.

25. What are the point of differences between the purchase order and the purchase
requisition?
Purchase requisition is said to an internal sheet and it is a appeal that is done to the organization
which is going to purchase the services and send the list of the goods. But purchase order is the
formal sheet that is send to the vendor which has the list of the essential items that needs to be
taken from the vendor.

26. How does one do a verification of the invoice?

When the invoice is related to an existing sheet then every information which is relevant is taken out
by the system. This includes material, vendor, delivery and its terms, payment etc. One has to enter
the invoice and the system takes out the account, tax, discount and corrections which are relevant. If
the invoice is been posted data like the average of the price are reorganized.

27. 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.

28. 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.

29. 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.

30. Explain about Meta data, Transaction data and master data? Can SAP be called a type of
database?
Meta data: Meta data informs a person about the information of a data. This gives a person in-depth
information about the hierarchy of the information or it is also called as Meta Objects. There are
many types of meta data. Some of the metadatas are structural meta data, descriptive metadata,
reference metadata, statistical metadata and administrative metadata. Each of these type have a
different kind of function in a system.

Next is the transaction data. This is nothing but the information pertaining to the transactions which
happen on the day today basis. After that comes the master data. Data provides essential
information about the materials, the employees and even information related to the customer of that
service. One can also call it the data of reference. For instance: the person orders for a product
which is 20 units. So instead of asking for the customer’s address 20 times, the same information
can be used from the master data of the customer.

SAP cannot be called as a database. Since it is an application it uses the databases which is
provided by other retailers. These retailers include Server, Oracle, SOL and many other retailers.

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