Explain what is SAP MM?

SAP MM (Material Management) is a functional module in SAP that deals

with procurement handling and material management. The MM module
contains master data, system configuration and transactions to complete
the procure to pay process.

What are the essential components in SAP MM?

Determine requirements

Source determination

Vendor Selection

Order Processing

Order follow up

Goods receipts and Inventory management

Invoice Verification

Mention what are the types of special stock available?

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

The types of special stock available are subcontracting, consignment,

project, pipeline, sales order, stock transfer, returnable packaging with
customer, etc.

List out important field in purchasing view?

The critical fields in purchasing view are

Base unit of measure

Order unit

Purchasing group
Material group

Valid from

Tax indicator for material

Manufacturer part number

Manufacturer, etc.

Explain the importance of the batch record?

A batch tells about a quantity of a particular product, which is processed or

produced at the same time with the same parameters. The materials
produced in such batch have the same values and characteristics. While,
the batch record gives the information about a particular batch product and
helpful in knowing whether the product has gone through GMP (Good
Manufacturing Process).

Explain how you can link a document to a vendor master record?

To link the document with the vendor master record by using the XK01
transaction code or by using the following menu path

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

Mention what are the major purchasing tables? List the transaction
codes for them?

Purchase requisition > EKBN

Purchase requisition account assignment > EBKN

Release documentation > EKAB

History of purchase documents > EKBE

Mention what are the data contained in the information record?

The information record contains 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, vendor evaluation data, planned delivery time, availability status for
goods. Mention what is the transaction code to delete a batch?

The transaction code MSC2N is used to delete a batch. By flagging the

batch master record, you can delete a batch record alternatively.

Mention what is the transaction code used to extend the material

view?

To extend the material view transaction, code MM50 is used.

Explain how you can change the standard price in the master
material?

The standard price for the material data cannot be updated or changed
directly. However, to change the standard price you can perform the
following steps

Fill in the future fields price ( MBEW-ZKPRS ) and the effective data (
MBEW-ZKDAT) for the materials

Select Logistics > Material Management > Valuation > Valuation Price
Determination > Future Price

What is Source List and what is the transaction code for creating
Source List?

To identify sources of supply for materials a source list is used. To create a

source list the transaction code used is ME01.

For creating a purchasing info record what are the pre-requisites?

The pre-requisites for creating a purchase info record are

Material Number

MPN ( Manufacturer Part Number )

Vendor Number

Organizational level code

Explain the terms Planned delivery and GR processing time?

Planned delivery means number of calendar days required to obtain the
material, and GR processing means number of workdays required after
receiving the material for inspection and placement into storage.

What is purchase requisition as related to SAP? Mention the

document types that are used in purchase requisition?

Purchase requisition in SAP determines both stock and non-stock items to

the purchasing department. It can be done either manually or
automatically, the document types used in purchase requisition are

RFO ( Request For Quotation )

Outline Agreement

PO ( Purchasing Order )

Explain how consignment stocks are created?

In the normal purchase order or requisition, consignment stocks are

created. While creating consignment stocks things to be considered is that
you must enter K category for the consignment item. As a result, the goods
issued are posted to consignment stores and invoice receipt is not
generated.

Explain how is the vendor return processed without a purchase order

reference?

First you have to observe the return column and then select -- Item Detail >
MIGO_GR > Goods Receipt for Purchase Order. Use movement type 161
if the intention is to deduct the stock otherwise, 162 is used to undo the
changes. In the end, you have to ensure that the document is a return
purchase order, and then the document is saved.

You can also use transaction code M21N for this purpose

Explain how you can create a vendor account group in SAP?

To create vendor account group in SAP

Select display IMG > Financial Accounting > Accounts Payable/Receivable

>Vendor Accounts > Master Records > Preparation of creating vendor
master records > Define Accounts groups with Screen Layout
Explain what are the accounts created in SAP MM?

Assignment of account is necessary for the purchase order item, it is

important in SAP MM as it determines following things

Account assignment type

Account that will be charged when you post the invoice or goods receipt

Account assignment data that you should provide

Explain what MRP (Material Requirement Planning) list is and what is

the transaction code to access MRP list?

MRP list is the initial working document from which the MRP controller
starts working, and it consists of planning results information for the
material. For an individual item, you can access the MRP list by using the
transaction code MD05. You can also access the MRP list by navigation
path

SAP Menu > Logistics > Materials Management > MRP > Evaluations >
MRP List- Material

Explain what is CBP? What is the difference between CBP and MRP?

CBP is the past consumption values of stock; it is used to forecast future

requirements. On the basis of past consumption values, the net
requirement of goods is calculated.

The difference between CBP and MRP is that when you plan materials
using MRP, you have to predict the materials requirement based on sales
and operations planning (SOP). While in CBP you have to predict the
material requirement based on historical demand for materials

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.

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.

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.

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.

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.

What is the code used for extension of the view of material?

The code used for the transaction of the material view is MM50.

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.

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.

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.

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.
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.

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.

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.

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.

What is the code used for reservation?

The transactional code used for reservation is MMBE.

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.

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.

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.

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.

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.

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.

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.
What Mrp Procedures Are Available In Mm-cbp (consumption Based Planning)?
Answer :
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.
Under What Conditions Are Planned Orders Created? What May Planned Orders Be
Converted To And How Is That Conversion Accomplished?
Answer :
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.
What Are The Organizational Levels Of The Enterprise Structure In R/3?
Answer :
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.
What Are The Different Ways To Organize Purchasing Organizations?
Answer :
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.
What Are Some Of The Options Available To Transfer Materials From One Plant To
Another?
Answer :
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.
What Are Some Of The Common Stock Transport Order Movement Types?
Answer :
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.

What Is An Indirectly Created Purchase Requisition?

 Answer :
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.
What Is An Rfq And How Is It Different From The Quotation Form?
Answer :
A RFQ is a purchasing document and an invitation to a vendor(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.
What Are The Transactions That Will Result In A Change Of Stock?
Answer :
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.
When Would It Be Prudent To Post Goods Movements Via The Shipping
Application?
Answer :
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.
What Is A Reservation?
Answer :
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.
Can You Manually Generate A Purchase Requisition Referencing A Purchase
Order Or A Scheduling Agreement?
Answer :
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.
How Is Gr/ir Account Related To Inventory?
Answer :
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.
How Do Planned And Unplanned Consumption Affect Movement Types?
Answer :
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.
What Are Departmental Views?
Answer :
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.
Is Material Data Valid For All Organizational Levels?
Answer :
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.).
Why Would You Want To Create Physical Inventory Sheets To Perform An
Inventory Cycle-count On A Material Or Materials?
Answer :
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.
What Is The Difference Between A Blanket Purchase Order And The
Framework Order?
Answer :
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.
What Is Release Procedure?
Answer :
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.
How Do You Display Parked Documents?
Answer :
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.
How Do You Perform An Invoice Verification?
Answer :
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.
How Do You Perform A Goods Issue?
Answer :
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.
Where Do You Perform A Goods Issue?
Answer :
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”.
How Will Items Be Returned To The Vendor?
Answer :
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.
How Do You Create A Source List?
Answer :
 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.

How Do We Get A Proper List Of Vendors To Send An Rfq?

Answer :
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.
What Are The Components Of The Master Data That Details A Companys
Procurement Used By, Vendor Evaluation For Example?
Answer :
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).
What Is Vendor Evaluation And How Do You Maintain It?
Answer :
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.
How Do We Create Consignment Stocks?
Answer :
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.
Can You Change A Purchase Requisition After It Has Been Created?
Answer :
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.
What Is The Difference Between A Pr With A Master Record And Without A
Master Record For The Material Being Ordered?
Answer :
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”).
How Do We Know If A Po Has Been Issued?
Answer :
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.
Where Is Material Master Data Saved?
Answer :
Tables MARA and MARC.
Where Is The Header Level And Item Level Data Saved In A Po?
Answer :
In SE11, we can see this information in table EKKO and EKP0 respectively.
How Do You Generate An Automatic Po After Creating A Pr Using A
Particular Material?
Answer :
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.
How Can You Disable A Reservation In Mrp?
Answer :
Use Transaction Code OPPI to check “block stock”.
How Do You Find The Logical Value For Stock Item By Date?
Answer :
Use Transaction MC49.
If You Have Created A Custom Movement Type And You Get A Not Allowed
Error, Where Should You First Look For The Cause?
Answer :
Using Transaction Code OMJJ, check “Allowed Transactions” for the customized
Movement Types.
How Do You Display A List Of All Reservations In The System?
Answer :
Run report RM07RESL.
How Can You Post A Goods Receipt If The Po Number Is Not Known?
Answer :
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.
How Do You Perform A Goods Receipt?
Answer :
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.
How Can An Invoice Be Verified?
Answer :
Transaction Code OLMR may be utilized.
How Can You Process Vendor Returns Without A Purchase Order Reference?
Answer :
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.
What Are Some Of The Initial Configuration Steps For Physical Inventory?
Answer :
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.
What Are Some Of The Initial Configuration Steps For Inventory
Management?
Answer :
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 ().
When, In Initial Configuration, Why Would You Have To Setup Stock
Transport Order?
Answer :
If it is required to carry out an inter-plant Stock Transfer through SD, then this
configuration is required and must be carried out.
What Are Some Of The Initial Configuration Steps For Purchase Requisitions?
Answer :
Define Document Types, Processing Time, Release Procedure (with and without
classification), Setup Authorization Check for G/L Accounts, Define Number
Range.
What Data Does The Information Record Contain?
Answer :
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.
How Do You Create A Vendor?
Answer :
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.
What Are The Lot Size Attributes A Material Can Posses?
Answer :
Lot Sizing dictates the reorder quantity for a material. A material can have a static,
periodic, optimum, or fixed lot size.
How Do You Configure The Release Procedure?
Answer :
Use Transaction OMGQ.
How Do You Create A Class?
Answer :
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.
How Do You Change Characteristic?
Answer :
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.
How Do You Define A Release Procedure For Prs And Pos?
Answer :
Use Transaction ME54 and ME28 respectively.
How Can One Keep Users From Using Standard Mm Movement Types?
Answer :
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.
What Needs To Be Present In Order For Material Type To Be Automatically
Copied From One View To Another?
Answer :
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.
How Do You Determine Which Views Of A Material Need To Be Added Or To
See Which Plants A Material Has Been Extended To?
Answer :
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.
When Creating A New Material, What May Prompt Some Of The Possible
Material Types?
Answer :
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.
When Can A Production Resource/tool Be Defined As A Material?
Answer :
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.
What Views Are Possible For A Material?
Answer :
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.
What Sap Program Is Used To Update Or Create Material Master Records?
Answer :
RMDATIND is used to update Material Master Records and can be used for such
assignments as extending all materials to a new plant.
Where Can You Dictate How Planned Orders Are Converted Into Requisitions
In Mrp?
Answer :
Look at the Transaction Code OPPR indicator. Assign proper indicator.
What Are Some Of The More Important Materials Management Tables?
Answer :
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.
How Are The Various Mm Configuration Transactions Accessed?
Answer :
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.
How Do You Access The Materials Management Configuration Menu?
Answer :
Transaction Code OLMS has a host of options that are not accessible through the
IMG.
How Do You Set Price Control For Receipts (goods/invoice) Telling The
System How To Value Stocks?
Answer :
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.
Why Would An Organization Need To Allow Negative Stocks?
Answer :
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.
What Is An Invoice Verification?
Answer :
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).
What Is The Source List?
Answer :
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.
What Is A Quotation?
Answer :
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.
Give Some Examples Of The Information Relating To A Materials
Storage/warehousing?
Answer :
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.
What Are The Various Steps In The Mm Cycle From Material Creation
Through Invoice?
Answer :
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.
What Is A Source List?
Answer :
The Source List identifies preferred sources of supply for certain materials. If it’s
been maintained, 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 priffered source during the source determination process.
. What Is A Price Comparison?
Answer :
Perform a price comparison using ME49 and one may compare quotations from
different vendors.
What Is A Material Type?
Answer :
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.
If You Have A Multi-lineitem Po, Can You Release The Po Item By Item?
Answer :
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.
Question 88. How Is The Mm Module Integrated With Other Modules Of Sap?
Answer :
The MM module deals with material procurement on the basis of the
production required; therefore, it is linked with the Purchasing Planning
(PP) module.
 The Sales and Distribution (SD) module is proportionally related to the
MM module, because it uses information about the quantity of material
sent for production.
The MM module is related to the Warehouse Management (WM) module,
because the MM module maintains information about the material storage
and material transfer inside an organization.
The MM module is also related with the Financial Accounting (FI)
module, because every operation performed in the MM module directly
impacts the financial process of the organization.
What Are The Levels Of Organizational Units Of Enterprise Structure In R/3?
Answer :
The client is the top level of the organizational units of Enterprise Structure in R/3.
The client is followed by the company code, which represents a unit with its own
accounting, balance, and P&L The next level of organizational units of Enterprise
Structure is plant, representing an operational unit of a company.
What Is Vendor Master Data?
Answer :
Vendor master data contains details of each vendor who supplies materials or
services to an enterprise. The vendor master data is stored in individual vendor
master records consisting data, such as vendor's name vendor's address currency
used for the transaction payment terms and contact person's name sales staff.
What Are The Different Fields In A Vendor Master Data?
Answer :
The different fields in a vendor master data are as follows:
The name and address of the vendor
The currency in which the transaction would be done
The terms and conditions of payment
The names of important contact persons
The different accounting information, such as the reconciliation account
in the general ledger
How To Create A Vendor Number Range?
Answer :
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 defines
whether the number range is defined externally by the user.
What Is The Transaction Code To Access The Materials Management
Configuration Menu?
Answer :
The OLMS transaction code is used to access the Materials Management
Configuration menu.
 What Are Purchasing Information Records?
Answer :
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.
What Are The Categories Of Purchasing Information Record?
Answer :
The following are the categories of purchasing information record:
Standard — Contains information for the standard purchase order. In this
type of purchasing info record, you can create info records for materials
and services which do not have master record.
Subcontracting— Contains the ordering information for subcontract
orders.
Pipeline— Contains information of the commodity that is sent through
the pipeline such as oil, water.
Consignment— Contains information of the material that is in vendor's
possession and is kept by the vendor at some other premises at his own
cost.
What Are The Prerequisites Of Creating A Purchasing Info Record?
Answer :
The prerequisites of 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 having a MPN, you must know its MPN material
number
Vendor number— The number of the vendor master record should also
be known
Organizational level — Suppose the purchasing info record is for a
particular purchasing organization or plant then the code specific to that
purchasing organization or plant is required
How Can You Create A Purchasing Information Record?
Answer :
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.
Can Purchasing Info Record Be Created Without A Material Number?
Answer :
Yes, you can create a purchasing info record without a material number. If the
material is without the material number, you need the following information for
creating the purchasing info record:
Material short text
Order unit
Material group
Short term key
How Is An Information Record Based On The Material Master Created?
Answer :
At first, you need to create the info record by selecting SAP Menu->Master Data-
Info Record->Create. Details, such as vendor number, material number, purchase
organization, or plant number, are then entered. The number of the information
record (in case of external assignments) is then entered. Next, the general data for
vendors, ordered quantity, origin of data, supplying information, and Customs Tariff
Number is entered. The planned delivery time, purchasing groups, and standard
purchasing quantity are then entered. The control data is then checked. The default
value of tolerance data and purchasing group are taken from the material master
record. The net price is entered 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, the record is saved.
What Is Document Management System In Sap?
Answer :
Document management system (DMS) in SAP helps you store external documents,
such as the goods or material pictures. 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.
How Will You Create A Document?
Answer :
You can create a document by using the CV01N transaction code or by using the
following menu path:
SAP Menu -> Logistics -> Central Functions -> Document Management System ->
Document -> CVOIN-Create.]

. Name The Key Fields That You Must Specify While Creating A Document.
Answer :
The key fields that you must specify while creating a document are:
Document Number — Refers to a unique alpha-numeric number that is
used to identify the document. .
Document Type— Refers to a document type that categorizes a
document.
Document Part— Refers to a document's section that is treated as an in
dividual document.
Document Version— Refers to a two-character number that represents
the document version
How Will You Link A Document To A Material Master Record?
Answer :
After creating a document, you can link it with the Material Master record by using
the MM01 transaction code or by using the following menu path:
SAP Menu -> Logistics -> Materials Management -> Material Master -> Material ->
Create (General) -> MM01- Immediately.
How Will You Link A Document To A Vendor Master Record?
Answer :
Once you complete creating a document, you can link that document with the
vendor master record by using the XK01 transaction code or by using the following
menu path:
SAP Menu -> Logistics -> Materials Management -> Purchasing -> Master Data ->
Vendor -> Central -> XK01- Create.
Question 141. How Classification System Is Used To Describe A Document?
Answer :
A Document Management System (DMS) stores large number of documents;
thereby, it becomes quite difficult to find the right document. In such a case, the
classification system is used to describe a document that uses a set of characteristics
combined together to form a class, which is later assigned to a document. The class
assigned for a document can be used to find a specific document from the DMS.
Question 142. What Is The Source Of Error "not Allowed" In Case Of Custom
Movement Type Creation?
Answer :
You need to check the allowed transaction for the customized movement types and
use the OMJJ transaction code.
Question 143. Give The Names Of The Tables Where The Header Level And
Item Data Are Stored In A Purchase Order.
Answer :
The EKKO and EKPO are the two tables where the header and item level data are
stored, respectively.
Question 144. Give The Names Of The Tables Where The Material Master
Data Is Stored.
Answer :
The MARA and MARC are the two tables where the master data is stored.
Question 145. What Is The Vendor Evaluation? How Is It Maintained?
Answer :
The vendor evaluation is an activity to find a vendors performance by giving a
particular score on a scale of 0 to 100. Alternatively, you can use a transaction code
ME61 and enter purchase organization and vendor number to view the details.
Question 146. Write The Name Of The Sap Program Used To Updated Or
Create Material Master Records (mmr).
Answer :
The RMDATIND program of SAP is used to update or create Material Master
Records (MMR).
Question 147. What Is The Storage Location-specific Material Master Data?
Answer :
There might be a case when you need to store a material at more than one storage
locations. In this case, to store the data, you need to create different material master
records for each storage location. This is called the storage location-specific
material master data.
Question 148. When Is A Production Resource Tool (prt) Defined For A
Material?
Answer :
If purchasing and inventory functions are carried out for Production Resource Tool
(PRT), then a PRT is defined for a material.
Question 149. What Transaction Code Is Used To Extend The Material View?
Answer :
The MM50 transaction code is used to extend the material view.
Question 150. What Is Source List? What Is The Menu Path To Define A
Source List?
Answer :
A source list is used to identify sources of supply for certain materials. The
following is the menu path to define a source list:
Select Logistics -> Materials management -> Purchasing -> Source list.
Question 151. What Do You Mean By Material Numbers In Sap?
Answer :
Material numbers are unique numbers used to identify a material.
Question 152. What Does An Industry Sector Control?
Answer :
While creating the material master record for a material, you need to classify the
material according to the industry type. This is called the industry sector. The
industry sector controls the screen appearance, the screen sequence, and the
appearance of industry-specific fields on individual screens in the material master
record.
Question 153. Can We Change The Industry Sector Of An Existing Material?
Answer :
No, once assigned you cannot change the industry sector of an existing material.
Question 154. What Is Valuation Category?
Answer :
The valuation category specifies the standard used to differentiate the different
partial stocks. In simple words, you can say that valuation category is the criteria to
define partial stocks. The standard system comprises a variety of valuation
categories, such as B and H. B is used for procurement type that is here the stock is
divided up depending on whether the stock is procured externally or manufactured
in-house. On the other hand, H is used for origin, that is here the stock is divided oh
the basis of from where it was delivered. The valuation category in the Material
Master record holds every material that is assigned for valuation.
Question 155. What Does The Material Type Control?
Answer :
The material type controls the materials stock management, which implies:
If there is a change in the quantity of the material, it should be updated in
the material master record.
Along with the change in the material master record, there should be
changes in the stock accounts also.
Question 156. What Is The Transaction Code To Create A Material Type?
Answer :
MOS2 is the transaction code to create a material type.
Question 157. What Material Types Are Prompted While Creating A New
Material?
Answer :
Click the F4 key to select the material type for a material that you want to create.
For example, the material type FHMI is used for Prod. Resources/tools, the material
type ROH is used for raw materials, and FERT is used for finished product.
Question 158. What Is The Menu Path To Define Material Type Attributes?
Answer :
The following is the menu path to define material type attributes:
Select Logistics Master Data: Material Master -> Material -> Control data -> Define
material type attributes.
Question 159. Can We Change The Material Type Of A Material?
Answer :
Yes, we can change the material type of a material.
Question 160. How Are User Defaults Set For Views?
Answer :
You can set user defaults for views by selecting Defaults->Views.
Question 161. List The Steps To Create A Profile.
Answer :
You can create a profile by following these steps:
1. Select Profile -» MRP Profile from the Menu screen to display the Initial Create
Profile screen.
2. Enter the value in the key file that you want to assign in the profile.
3. Select Goto -> Selection to display the Selection screen.
4. Enter a profile description and select the fields that you want to include in the
profile.
5. Select Goto -> Data to display the Data screen.
6. Enter your data in the Data screen and save the profile by selecting Profile ->
Save.
Question 162. How Are The Characteristics Changed?
Answer :
The characteristics are the properties that describe the length, color, and other
related features of an object. Perform the following steps to change the
characteristics of an object:
Select SAP Menu->Gross App. Components->Classification System->Master Data-
>Characteristics
Alternatively, the CT04 transaction code is used to change the characteristics.
Question 163. How Is A Class Created?
Answer :
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.
Question 164. Can You Include An Roh (raw Material) Type In The Sales
View?
Answer :
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.
Question 165. List The Key Fields Of The Material Master Table.
Answer :
The key fields of the material master table are material groups, material status,
divisions, storage conditions, labs and offices, basic materials, container
requirements, measure groups, container requirements, and temperature.
Question 166. What Are The Major Purchasing Tables? List The T Codes For
Them.
Answer :
The major purchasing tables along with their T-codes are as follows:

Question 167. What Is Non-valuated Material?

Answer :
The material that is maintained on the basis of the quantity rather than its value is
called the non- valuated material. The non-valuated material can only be withdrawn
from the stores or warehouses only when it is transferred to "valuated" stock.
Question 168. How Can You Access The Additional Data Screen?
Answer :
You can access the additional data screen in a material master record from any view
by selecting additional data in the standard material master.
Question 169. How To Move A Material Master Record From One Sap System
To Another?
Answer :
You can use either of the two ways to move data from one SAP system to another.
1. Using direct input
2. Using Application Link Enabling (ALE)
Question 170. What Is The Transaction Code To Display Material Of Sap
Mm?
Answer :
MM03 is the transaction code to display material of SAP MM.
Question 171. What Is The Purchasing Value Key?
Answer :
It is the key, which determines the following:
Reminder keys— Keys that help determine the number of the days before
or after the vendor has to be reminded for the material procurement
 Under delivery tolerance limit & Over delivery tolerance limit
Order acknowledgement requirements in purchase order
Question 172. How Can You Configure The Purchasing Value Key?
Answer :
You can configure the purchasing value key by performing the following steps:
1. Open the SAP implementation guide.
2. Click Materials Management->Purchasing->Material Master->Define Purchasing
Value Keys.
This opens the Change View "default Values: Material Master": Overview page.
3. Enter the New Entries button. This opens the New Entries: Details of Added
Entries page.
4. Enter the appropriate values in the fields.
5. Click the Save button on the toolbar.
Question 173. What Is Vendor Sub-range?
Answer :
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.
Question 174. What Is A One-time Vendor?
Answer :
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.
Question 175. Why Is Negative Stock Needed In An Organization?
Answer :
Negative stock is needed in an organization when a material is shipped to a
customer and the production is not confirmed or there is not enough stock to satisfy
the requirement. The system allows issuing the material and inventory shows a
negative quantity of stock, until the product of material is confirmed.
Question 176. How Are The Consignment Stocks Created?
Answer :
The consignment stocks are created in the normal purchase order or requisition, but
the main thing to consider is that the K category is to be entered for the consignment
item. As a result, the goods issued are posted to the consignment stores and the
invoice receipt is not generated.
Question 177. Define The Consignment Cycle?
Answer :
Consignment cycle is much more similar to the purchase cycle except that when you
create goods receipts of the consignment stocks, only QTY (quantity) is updated
without creating any accounting documents. Once the goods are utilized,
consignment is settled. The value of the consumed or issued consignment stocks is
used from the active purchase info record.
Question 178. How Is Consignment Material Procured?
Answer :
The consignment material is procured through purchase requisitions, purchase
orders, and outline agreements.
Question 179. How Can We Take Consignment Stocks Into Our Own Stock?
Answer :
You can take consignment stocks from the vendor into your own stock by
performing the following steps:
1. Select Goods movement->Transfer posting to display the initial screen.
2. Enter the plant name and the location where you want to store the materials.
3. Select Movement type->Transfer posting->Consignment->Consignment to own.
4. Select Continue to display the collective entry screen.
5. Enter the name of the vendor, the materials, and the quantity of materials.
6. Enter the receiving storage location if you want to store the materials in another
storage location.
7. Post the document. This makes the vendor liable to change the storage location of
the materials.
Question 180. How Can You Do Invoicing In Case Of Consignment Stocks?
Answer :
You can do the invoicing of consignment stocks by performing either of the
following:
Invoicing with purchase order
Invoicing without purchase order
Question 181. How Can We View The Stocks Provided To Vendor?
Answer :
The stocks of material provided to 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, the planned issues, and the planned receipts can be
viewed.
Question 182. How Are Components Consumed In Case Of Subcontracting?
Answer :
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 purchase order. The components are posted to the stock of material
provided to vendor in 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 with reference to the subcontract order is posted. The goods
receipt also contains the posting of the consumption of the components from the
stock of material provided to vendor. In case the components consumed by the
vendor are more or less than that specified in the purchase order, an adjustment
needs to be posted to correct the consumption of components.
Question 183. What Is The Need Of Creating Physical Inventory Documents
For An Inventory Cycle-count Procedure Of A Material Or Materials?
Answer :
For a cycle-count procedure, the physical inventory documents are needed, because
these are used to record inventory levels of the materials.
Question 184. What Is The Difference Between Planned And Unplanned
Consumption?
Answer :
The difference between planned consumption and unplanned consumption is that
planned consumption is updated if goods are withdrawn due to reservation, whereas
unplanned consumption is updated, if goods are withdrawn from stock without a
reservation.
Question 185. How Can One Vendor Obtain Components From Another
Vendor Or Third-party?
Answer :
The components can be provided by a third party, such as another vendor. In this
case, the subcontractor is specified as the delivery address in the purchase order.
This implies that the components are directly delivered to the subcontractor. To
order components for a subcontract order from another vendor, perform the
following steps:
1. Select Purchase order->Create->Vendor known from the Purchasing menu.
2. Enter the vendor of the components and the desired plant.
3. Enter the components.
4. Select Item->More functions-> Delivery address. A dialog box appears in which
the delivery address can be entered.
5. Enter the number of the subcontractor in the Vendor field.
6. Select the SC vendor box. As a result, the components at the goods receipt are
posted to the stock of material provided to the vendor.
7. Save the purchase order.
Question 186. How Is Invoice Verification Of Subcontracting Po Done?
Answer :
The invoice verification of subcontracting PO is done in the same way as it is done
in purchase order.
Question 187. How Do You Attach A Document In The Purchase Order?
Answer :
A document can be manually attached to a purchase order by using the document
management system in SAP. In case when the purchase order is prepared using the
T-code ME21N, then no attachment can be added. You need to save the purchase
order and re-open with the T-code ME22N. Click the service for object button,
select Service Object Button-> Create-> Create Attachment, and then select the file
to be attached.
Question 188. How Can A Subcontract Order Be Created?
Answer :
A subcontract order can be created by performing the following steps:
1. Enter the end-product to be ordered and the item category for subcontracting (L)
in the order item.
2. Press the Enter key to display the screen for component processing.
3. Enter the components required by the vendor to manufacture the end-product.
4. Save the purchase order.
Question 189. What Do You Mean By The Lot Size?
Answer :
The lot size is the quantity of materials used for re-ordering. It can be static,
periodic, optimum, or fixed in attributes.
Question 190. What Do You Mean By A Reservation?
Answer :
A reservation is a document that ensures availability of materials in the warehouse
when materials are required for transferring materials to a customer. It contains
information, such as which materials are needed, what quantities of materials are
required, and when or where the materials are needed. It helps the Material
Requirement Planning (MRP) system to avoid lack of stock in the warehouse.
Question 191. What Transaction Codes Are Used With Reservations?
Answer :
The following 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
Question 192. How Is The List Of All Reservations In The Systems Displayed?
Answer :
The reservation list can be displayed by running the RM07RESL report.
Question 193. State The Difference Between Stock Transfer And Transfer
Posting?
Answer :
Stock transfer is the physical movement of goods from one store to another store or
one plant to another plant. Transfer posting is movement of goods from one stock
type to another or from one storage location to another storage location within a
plant.
Question 194. What Is The Transaction Code To Create Movement Types?
Answer :
OMJJ is the transaction code to create movement types.
Question 195. How To Create Movement Type?
Answer :
Perform the following steps to create a movement type:
1. Select the standard movement type 201 from the Determine Work Area Entry
dialog box.
2. Click the copy icon and then overwrite 201 with Z01.
3. Select the new movement type Z01 from the Determine Work Area Entry dialog
box.
4. Select Reversal-> follow-on movement.
5. Enter the reversal movement type.
Question 196. How Is Stock Transferred In A Cross-company Scenario?
Answer :
Stocks can be transferred between plants that belong to different company codes.
Such a stock transfer process can be done in any of the following ways:
One-step plant-to-plant stock transfer
Two-steps plant-to-plant stock transfer
STO without delivery through shipping
STO with delivery through shipping
Question 197. How Can A Stock Transfer Be Monitored In Purchasing?
Answer :
A stock transfer can be monitored in Purchasing by using the following stock
documents:
Purchase requisition
Stock transport order (STO)
Stock transport scheduling agreement
Question 198. Can A Purchase Requisition Be Generated Automatically?
Answer :
You can generate a purchase requisition automatically only in case where a material
is sent out for external processing, for example subcontracting work. Another
situation where you may need to generate a purchase requisition automatically is
when the bill of materials is for a material other than a non-stock item.
Question 199. State The Configuration Steps For Purchase Requisition?
Answer :
The steps for the purchase acquisition are as follows:
1. Defining of document type
2. Processing Time
3. Release Procedure
4. Authorization Check
5. Defining of the number ranges
Question 200. How Do You Change A Purchase Requisition Once It Is Issued?
Answer :
To change a purchase requisition after it is issued, the first task is to check whether
a purchase order against was issued or not. If it is issued, then the purchase groups
are informed. Next step is to check whether the purchase requisition is approved or
not. If it is approved, then only change to the limited extent is possible. Also if the
purchase requisition is created by the MRP, then much less interference in the
process is possible. Keeping all these parameters in mind, regarding all the changes
that are going to be brought into effect, select the desired item and select Go To->
Statistics ->Changes link.
Question 201. State The Differences Between The Purchase Requisition With A
Master Record And Without A Master Record?
Answer :
In case of the purchase requisition with the master record, the source list,
information record, and vendor evaluation are present in the system. In this case, the
outline agreements are generated due to the changing of the short-term purchasing
into the long-term agreement. As a reason, the purchase order cannot be issued
against a purchase order, but only an agreement can be set up. If the material master
is not present, then the material is ordered as a consumable item. The account
assignment is done by specifying the consumption accounts against this acquisition.
For example, the purchase information related with this requisition can be assigned
to a specific cost center.
Question 202. State The Importance Of The Vendor Evaluation In The
Purchase Department?
Answer :
Vendor evaluation is an important function of the purchase department as it
supports in optimizing the procurement process by selecting vendors to supply
materials or services.
Question 203. What Are The Main Criterias Of Vendor Evaluation?
Answer :
The main criterias of vendor evaluation are as follows:
Price Quality
Delivery
Service and Support
External Service
Question 204. What Are The Document Types Used In Prs?
Answer :
Purchase requisitions (PRs) are internal documents of an enterprise. These
documents are used to request the Purchasing department of the enterpriser to
procure a particular material or a service. The quantity of the requested material and
the date of the procurement are also specified in the PRs. The document types used
in PRs are as follows:
1. Request for Quotation (RFQ).
2. Outline Agreement.
3. Purchase Order.
Question 205. What Is The Difference Between An Indirectly Created And
Directly Created Purchase Requisition?
Answer :
A purchase requisition is said to be created indirectly when it is initiated through
another SAP component, such as consumption-based planning, project system, plant
maintenance, and production planning and control. On the other hand, a directly
created purchase requisition is the one that is manually created through the
requesting department. The person concerned has the full control to decide the item,
the quantity to be ordered, and the delivery date of the order.
Question 206. Can A Purchase Requisition Be Manually Generated Through
The Reference Of A Purchase Order Or A Scheduling Agreement?
Answer :
A purchase requisition cannot be generated either by using the reference of a
purchase order or by using a scheduling agreement.
Question 207. What Is A Purchase Order? What Does A Purchase Order
Contain?
Answer :
A purchase order is a document issued by a buyer to a seller which consists of the
type and quantity of the goods or services the seller will provide to the buyer at a
specified date.

A purchase order consists of:

Document Header — Relates to the entire purchase order
Number of Items — Relates to the number of items to be provided by the
seller to the buyer.
Question 208. Where Do We Define Payment Terms In Po?
Answer :
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.
Question 209. What Are The Document Types Used In Po?
Answer :
The document types used in PO are:
Standard Purchase Order (NB)
Stock Transport Order (TB)
Framework Order
Question 210. What Is The Difference Between Blanket Purchase Order And
The Service Order?
Answer :
The blanket purchase order is used for consumable materials, such as office paper
with a sort text. In case of blanket purchase order, no Good Receipt (GR) is required
for the purchase order. In framework order, the document type is used for purchase
order and GR and Service Entry (SE) are required for purchase order.
Question 211. What Is Price Comparison?
Answer :
Price comparison is used to compare quotations from different vendors. You can use
transaction code ME49 to perform a price comparison between different vendors.
Question 212. What Are The Document Types Used In Sa?
Answer :
The document types used in SA are:
LP for standard scheduling agreements
LT for stock transport scheduling agreements
LPA for scheduling agreements with release documentation
Question 213. What Are The Document Types Used In Contract?
Answer :
The document types used in Contract are:
MK
WK
Question 214. What Is A Contract?
Answer :
A contract is an agreement between a customer and a vendor that states that the
vendor will supply material to the customer at an agreed price for a specified period
of time. It can be based on either a total quantity or a total price. A contract avoids
the need to create a new purchase order each time the material or service is required.
Question 215. What Are The Different Types Of Contracts?
Answer :
A contract can be one of the following two types:
Quantity contract — In this type of contract, the purchasing department
agrees with the vendor for supply of a specified quantity of material, or
services.
Value contract — In this type of contract, the purchasing department can
limit the total spending for a material with a vendor. The release orders
are valid only till the total spending for the value contract equals the total
agreed upon value.
Question 216. What Is The Difference Between A Scheduling Agreement And
A Contract?
Answer :
A scheduling agreement contains the details of a delivery schedule whereas a
contract contains only quantity and price information and does not contain any
details of specific delivery dates.
Question 217. What Is The Difference Between Release Procedure In Internal
Documents And External Documents?
Answer :
The release procedure differs for internal and external documents. The internal
document and the purchase requisition can be released either at the item level or at
the header level. Additionally, the internal document can be released ether with
classification or without classification. The external document, such as the purchase
order or the request for quotation, can only be released at the header level by the
classification method.
Question 218. What Are The Main Documents Used In Mm?
Answer :
The following are the main documents used in MM:
Purchase requisitions
Purchase orders
Goods transfers
Goods receipts
Goods issues
Question 219. What Are The Various Steps Of The Mm Cycle?
Answer :
The following are the different steps of the MM cycle:
Create material
Create vendor
Assign material to vendor
Procure raw material by using purchase requisition
Locate vendor for certain material
Process goods receipts
Goods issue, and
 Invoice verification
Question 220. What Is The Definition Of Procurement?
Answer :
Procurement can be defined as the purchase of goods or services at the best possible
total cost in correct amount and quality. It is the process of acquiring goods and
services that covers both acquisitions from third parties and from in-house
providers.
Question 221. What Is An Account Assignment Category In A Po Document?
Answer :
The Account assignment category field plays an important role in the purchasing
documents. It contains many control functions that help to determine the objects that
are charged in case of an ordered material. The ordered material must be procured
for direct usage or consumption. With the help of account assignment category in
the purchasing documents, the cost of the material can be allocated to a single
Controlling object or it can be allocated among various Controlling objects.
Question 222. What Is The Difference Between A Purchase Order And
Purchase Requisition?
Answer :
A purchase order is a document type that gives notification about formal requests
for materials or services from an outside vendor or plant. A purchase requisition is a
document type that gives notification about the need for materials or services.
Question 223. What Is The Creation Indicator?
Answer :
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.
Question 224. Define Automatic Generation Of Purchase Orders From
Purchase Requisitions.
Answer :
The SAP system can automatically convert purchase requisitions into purchase
orders. This task can be performed either online or in the background. In the process
of conversion, the SAP system attempts to merge as many purchase requisition
items as possible to form one purchase order. Automatic processing of conversion
of purchase requisitions to purchase orders is recommended only in the case when
you have a well-maintained SAP system, else manual processing is advised.
Question 225. What Is Quotation?
Answer :
Quotation is offered by a vendor to a purchasing organization that contains the
details regarding the supply of materials or performance of services subject to
specified conditions. A quotation is a legal document that binds the vendor for a
certain period. The quotation is created by the vendor in response to a request for a
quotation issued by a purchasing organization. A quotation consists of all the
details, such as the total quantity and delivery date of a material or service offered.
Question 226. What Is Request For Quotation (rfq)?
Answer :
A request for quotation (RFQ) is a document sent to a vendor by a purchasing
organization and the vendor sends quotations with prices in response. An RFQ
consists of two parts:
RFQ header— Contains general information, for example, the name and
address of the vendor
Items — Contain information about the total quantities and delivery dates
for the materials or services specified in the RFQ
Question 227. How Rfqs And Quotations Are Processed In Sap?
Answer :
The RFQs and quotations are processed in the following manner in SAP:
1. RFQ is created either manually or by using an already existing RFQ, requisition,
or outline purchase agreement by the company.
2. Company creates the list of vendors who are to receive the RFQ. For this
purpose, a separate document is created for each vendor.
3. Company enters the prices and conditions set out in the quotation submitted by
the vendor into the RFQ document.
4. Company carries out a comparative appraisal of all of the vendor quotations by
means of the price comparison list. The quotations given by each vendor are
compared item by item. The mean value quotation represents the average value of
the individual quotes.
5. Company enters the most favorable quotation in an info record and sends
rejection letters to the other unsuccessful bidders.
6. Finally, company monitors the status of follow-on activities related to the RFQ
and quotation (e.g. a contract is set up or a purchase order issued).
Question 228. What Are The Ways A Rfq Can Be Created?
Answer :
RFQs can be created in either of the following ways:
Using manual approach — Data for an RFQ is entered manually for the
materials for which you wish prices to be quoted.
Using copying approach — An RFQ is copied from an existing RFQ.
Using referencing approach — An RFQ is created by using reference
requisitions or an outline purchase agreement.
Using automatic approach — An RFQ is created automatically by using
a requisition.
Question 229. What Are The Rfq Types?
Answer :
The RFQ type is a two-character field used in the configuration of RFQ document
types. It helps the company to differentiate between the different types of RFQs that
they can send out.
Question 230. List The Important Key Fields For Rfq?
Answer :
Different important key fields for RFQ are as follows:
RFQ Date
Quotation Deadline
RFQ Document Number
 Organizational Data
Default data for Items
Collective Number
Validity Start/Validity End
Application By
Binding Period
Reference Data or RFQ Item detail
RFQ Delivery Schedule
Additional Data
Vendor Selection
Question 231. What Is Rfq Delivery Schedule?
Answer :
RFQ delivery schedule refers to the information entered by the purchaser that
comprises date, time, and amount required on that date. You can access the delivery
scheduling screen by pressing the SHIFT+F5 key combination from the keyboard in
the SAP interface.
Question 232. How Will You Release A Rfq?
Answer :
Follow this navigation path to release a RFQ: SAP Menu -> Logistics -> Materials
Management->Purchasing->RFQ/Quotation->ME45-Release. A screen appears;
enter all the information in the screen and the RFQ is released based on the
information entered.
Question 233. How Can The List Of Vendors Be Found To Send A Request For
Quotation (rfq)?
Answer :
You can use the information record to find the list of the materials to find out the
vendors from whom the goods have been purchased in the past. Thereafter, the
request for purchase requisition is issued. Alternatively, you can go for a source list.
Question 234. What Is The Purchasing Document Category For Rfq?
Answer :
The Purchasing Document Category for RFQ is the single character A, and for other
documents such as for Purchase Orders, the category is F, for Contracts it is K, and
for Scheduling Agreements it is L.
Question 235. What Is The Role Of The Confirmation Control Key?
Answer :
The confirmation control key is used to specify whether or not a notification for
shipping is expected PO item.
Question 236. What Is Purchasing Document?
Answer :
A purchasing document is a document type used by the purchasing department to
procure materials or services.
Question 237. Name Some Of The Data Points Provided By Purchasing For
The Materials.
Answer :
Some of the data points provided by purchasing for the materials are Base unit of
measure, purchasing group, remainder days, shipping instructions, tolerance levels,
GR processing time, critical part, and JIT schedule indications.
Question 238. How Does The Sap System Differentiate Between Purchasing
Documents?
Answer :
Document type is the unit to differentiate between different kinds of purchasing
documents in the SAP system. Each document consists of a unique number, which
determines the significant number range and the fields that are offered to you for
data maintenance purposes.
Question 239. How Are Purchasing Documents Numbered?
Answer :
In the SAP system, each document is assigned a unique number. These numbers can
be alphanumeric also. You can assign these numbers in two ways, either internally
or externally, depending on the policy of your company or enterprise. An internal
number depicts that the SAP system assigns the number automatically, whereas an
external number depicts that the person creating the document must supply
manually. Alphanumeric assignment of numbers is only possible in the latter case.
Question 240. Can A Line Item In A Purchase Order Be Blocked After It Has
Been Created?
Answer :
Yes, a line item in a purchase order can be blocked after it has been created.
Blocking a line item stops acceptance of any goods receipts related to that line item.
Question 241. What Are The Account Assignment Categories In A Purchase
Order?
Answer :
SAP provides you with a number of account assignment categories that you can use
for a purchase order. An account assignment category indicates the account
assignment details that are required
Question 242. Can Multiple Accounts Be Assigned To A Purchase Order Line?
Answer :
Yes, you are allowed to assign multiple accounts to one purchase order line.
Multiple account assignments may be required in a situation where the cost of the
item to be purchased is divided among multiple people.
Question 243. What Are The Different Types Of An Item Category?
Answer :
An Item Category is a field in purchase requisition that specifies the category of
purchase requisition. The following are the different types of Item Categories:
Blank-Standard
K-Consignment
L-Subcontracting
S-Third party
D-Service
U-Stock Transfer
Question 244. What Is Service Procurement?
Answer :
Service procurement consists of activities, such as bidding, contract management
and operational procurement processes from requisition to payment.
Question 245. What Is The Difference Between Procurement For Stock And
Procurement For Consumption?
Answer :
In procurement for stock, when you order a material, the system does not require an
account assignment because the posting to the appropriate stock and consumption
occurs automatically every time the transaction related to goods takes place.

In procurement for consumption, you need to enter the account assignment (such as
cost center) that specifies the purpose of consumption. On the receipt of goods, the
material or service is shown as it has been consumed.
Question 246. What Is The Difference Between External Procurement And
Internal Procurement?
Answer :
In the external procurement, the procurement of raw material, trading goods, and
services is made from the external supplier for the organizational units of an
enterprise that need such items or services.

In the internal procurement, the procurement of raw material, trading goods, and
services is made from an organizational unit of an enterprise for other
organizational units of the same enterprise that needs such items or services.
Question 247. What Is A Document Type?
Answer :
A document type is used to differentiate between different kinds of purchasing
documents. In other words, different purchasing documents are distinguished on the
basis of their document types. Document types are defined for RFQs, purchase
orders, and contracts.
Question 248. What Are The Ways Of Converting Planned Orders Into
Purchase Requisitions?
Answer :
You can convert the Planned Orders into Purchase Requisitions either by converting
them individually or by collectively converting all the planned orders.
Question 249. What Transaction Code Is Used To Convert Planned Orders
(po) Into Requisitions In Material Requirement Planning (mrp)?
Answer :
The OPPR transaction code is used to convert Planned Orders (PO) into requisitions
in Material Requirement Planning (MRP).
Can You Add Custom Fields To Purchase Order(s) And Request For
Quotation (s)?
Answer :
Yes, you can add custom fields to a Purchase Order and Request for Quotation.
How Is Framework Order Different From Standard Po?
Answer :
Framework Order (FO) is a purchasing document used for procuring materials or
services. This type of purchase order has an extended validity period instead of a
stipulated delivery date as in case of the Standard Purchase Order (PO).
What Document Type Can Be Used In Case Of Service Procurement?
Answer :
The service procurement is used by the organizations to procure the services or part
of the services. It consists of activities, such as bidding, contract management, and
all the activities from requisition to payment.
What Do You Mean By Using Multiple Account Assignment In A Po?
Answer :
Using multiple account assignment in a PO allows you to apportion the cost
associated with a PO item. When you use the multiple account assignment, the
account assignment data takes the form of individual account assignment items.
How Is The Sto Different From The Standard Po?
Answer :
In STO, UB document type is used and it also requires a supplying plant for the
movement of materials, whereas in the standard PO, NB document type is used and
requires a vendor for the procurement of material.
How Can We Return A Material That We Have Received With Reference To A
Po?
Answer :
In case of external vendor, when your company returns a good, received with
reference to a purchase order, the reference of the PO is not mandatory to post the
return in the system. The system just posts a goods receipt correction and issues to a
credit memo against the vendor. However, if the vendor is internal, you may require
the reference of the PO. In this case, the system automatically updates the stock,
without any internal billing.
How Are Free Items Managed In A Po?
Answer :
Mark the item as FREE in the Purchase order. The price for such PO items will be
zero.
. Which Documents Are Used As References When We Create Po?
Answer :
At the time of creating PO, we take the reference of Purchase Requisition, Request
for Quotation, and any other Purchase orders. However, it is not necessary to take
the reference of these documents as most of the values are automatically taken by
the SAP R/3 system.
What Is The Transaction Code To Set Price Control For Receipts
(goods/invoice)?
Answer :
The transaction code OMW1 is used to set price control for receipts
(goods/invoice).
. What Is The Difference Between Quantity And Value Contracts?
Answer :
Quantity Contracts— When the total quantity to be ordered is known in advance
during the validity period, the quality contract is used. This contract is considered as
fulfilled when totaling of release orders of a given quantity has been issued.

Value Contracts — When the total value of the release orders does not exceed a
definite and predefined value, the Value contract is used. The contract is considered
as fulfilled when totaling of release orders of a given value has been issued.
What Is A Centrally Agreed Contract?
Answer :
A centrally agreed contract type is created without specifying the name of the plant.
The plant specification is provided at the time of creating the contract release order.
In centrally agreed contract, different conditions for individual plants can be
maintained easily. Moreover, different ordering addresses or goods suppliers in the
vendor master record can also be specified in this type of centrally agreed contract.
The centrally agreed contract is useful in the enterprises that have a central
purchasing department and the materials are required to be bought for different
plants. In this case, they create a high-level contract used by the other department-
specific purchase organizations within the enterprise. The use of such centrally
agreed contracts usually results in more favorable conditions of purchase and helps
maintain consistency in process of purchasing throughout the enterprise.
. List The Important Fields Of A Service Master Record?
Answer :
The important fields of a Service Master Record are as follows:
Service number— Defined for external or internal numbering of the
service
Service Category— Distinguishes between the types of services
Descriptive text— Contains a short or long description of the service
Base unit of measurement— Contains the unit in which you can measure
the service
Material/Service group— Allows the service to be selected for grouping
purpose
Valuation class— Finds the general ledger accounts that are related with
the service
What Is A Standard Service Catalog (ssc)?
Answer :
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.
How Can Services Be Purchased?
Answer :
The services can be purchased by first creating a document in system which forms
the base of the purchasing process. This document can be a purchase requisition, an
RFQ, or a purchase order. Now, determine the possible sources that can provide the
service. For this, you can either select a new service or a service that has been
previously used. If the service is requested for the first time, a bid invitation process
is started. In the bid invitation process, you first need to create an RFQ and then
record the incoming quotations in it. The best quotation is determined based upon
certain factors, such as price, warranty period. The order is then placed to the
successful bidder who receives either a standard purchase order or a release order
issued against an existing contract.
What Is A Service Entry Sheet?
Answer :
A service entry sheet is a transaction in which the data related to the service that has
been ordered is recorded using a purchase order. You can use the ML81N
transaction code to locate the service entry sheet. You can also locate the service
entry sheet by using the following path: SAP menu->Logistics->Materials
Management -> Service Entry Sheets Maintain.
What Is A Blanket Purchase Order? How Can It Be Created?
Answer :
A purchase order that has a validity period and contains a simple process of
procuring materials or services is referred as a blanket purchase order. For creating a
blanket purchase order, use the ME21 or ME21N transaction code.
In What Cases Item Category M (material Unknown) And Item Category W
(material Group) Can Be Used In Contract?
Answer :
The Item category M is used when the material issued is unknown. The item
category W is used when the value and quantity of material are unknown.
How Can We Create An Sa In Sap?
Answer :
You can create a Scheduling Agreement (SA) in SAP either manually or by using
the referencing techniques. To create a SA manually, you have to enter all the
information on scheduling agreement manually. You can even use reference
documents from where you will copy the information related to the scheduling
agreement. These reference documents can be Purchase requisitions, Request for
Quotations, and Centrally agreed Contract.
What Are Schedule Lines?
Answer :
Schedule Lines — The Schedule lines are generally created adjacent to the schedule
agreements. For example, you have a material that is procured through a subcontract
and you are required to ensure the delivery of this material on specific days. For
this, you can create a schedule line for the schedule agreement of that material. In
the source list of the schedule line, you have to provide information regarding the
vendor and schedule agreement along with the validity dates of delivery and also
specify the agreement, which is relevant for MRP.
What Is Tax Code?
Answer :
The tax code defines how the tax will be calculated and posted in SAP R/3 System.
Each item on which the tax is applicable is allocated to a tax code. The R/3 System
reads this tax code for each item and calculates tax for it. This tax and tax code is a
part of Purchase order.
What Is Material Requirement Planning (mrp) In Sap?
Answer :
Material requirement planning guarantees the procurement and production of the
required quantities of materials on time. The MRP helps a company to determine
which materials are to be produced and in what quantity they are to be produced.
List The Types Of Mrp?
Answer :
The three types of MRP are as follows:
Reorder-point planning — In this type of MRP, the procurement starts
when the existing stock and the receipts fall below the reorder point.
Forecast-based planning — In this type of MRP, the forecast values and
the future requirements of the material is decided by the forecasting
program.
Time-based planning— In this type of MRP, the date of the planned
requirement should match with a known date, such as the date when the
vendor delivers. If the vendor delivers the material on the same date, then
you can start the planning procedure from that date itself.
What Is A Mrp List?
Answer :
The MRP list is a static list which is the initial working document for the MRP
controller to start working from and contains the planning result information for a
material.
You can access the MRP list for an individual item by using the MD05 transaction
code. You can also access the MRP list by using the following navigation path: SAP
menu->Logistics-> Materials Management->MRP->Evaluations->MRP List -
Material.
What Is The Difference Between Material Requirement Planning (mrp) And
Consumption- Based Planning?
Answer :
MRP and Consumption-based planning are two types of SAP planning used to
determine a product's requirements. When you plan materials by using MRP, you
need to plan the materials requirement based on Sales and Operations Planning
(SOP). When you follow the consumption-based planning approach to plan the
materials, you need to plan the future demand of the product. This can be done by
using the historical demand of materials.
What Important Values Are Used To Define The Reorder Point?
Answer :
The following important values are used to define the reorder point:
Safety stock
Replenishment lead time
Average consumption
What Is A Procurement Proposal? What Are The Types Of Procurement
Proposal?
Answer :
Procurement proposals are created by the system and are based on the settings
defined by the purchasing department. They help in ascertaining the required
materials.

The different types of procurement proposals are:

Purchase requisitions: Required for a material that is procured externally.
Schedule lines: Required when a material is procured externally and the
material has an identifiable source and scheduling agreement.
Planned orders: Required for materials that are procured internally.
How Is The Automatic Purchase Order Generated After Creation Of Pr By
Using A Particular Material?
Answer :
You need to maintain the source list and select the source list indicator record. In
case of more than one source code list, one of them is fixed. You then need to run
the MRP. As a result, a purchase requisition is generated with the pre-assigned list
of the supply source. Lastly, the ME59 T-code is entered for automatic creation of
purchase order from the purchase requisition.
What Is Forecasting In Sap System?
Answer :
Forecasting is a future prediction which is an uncertain process. Most business
decisions are based on forecasts, such as decision of material requirements. While
making business decisions, forecasts are continuously needed. The impact of the
forecast on actual results is first evaluated and the initial forecasts are updated and
then accordingly the decisions are modified.
Can Forecast Model Be Selected Automatically?
Answer :
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.
What Do You Mean By Forecast-based Planning?
Answer :
Forecast-based planning is a process used in consumption-based planning which
depends on predictions of future requirements calculated on the basis of forecast.
What Are The Different Types Of Forecast Model?
Answer :
The following are the different types of forecast model:
Constant
Trend
Seasonal
Seasonal trend
Define Time-phased Planning.
Answer :
Time-phased planning is an MRP procedure, where materials are planned to be
delivered in a particular time interval. In the time-phased planning technique, there
is a planning file that contains an MRP date to plan the delivery of materials. When
the material master is created and is reset for each running plan, then MRP date is
set. If you need to plan the delivery of a material earlier than the specified MRP
date, you can enter an MRP date while running the plan. For example, if the running
plan is set to Wednesday, you can get it forwarded to Monday.
Define The Planning Process Flow.
Answer :
The planning process flow describes the business process and the technical system
process that are involved in CBP. The system accomplishes the following partial
processes in the planning run:
1. The system first checks the planning file entries and also checks whether or not
the material is changed in the planning run.
2. The system accomplishes a net requirement calculation for every material. It
checks whether, or not the requirement quantity is covered by available warehouse
stock.
3. After carrying out a net requirement calculation for every material, the system
then carries out the log-sizing calculation.
4. The scheduling is done for the start and finish dates of the procurement proposals.
5. The system determines the type of procurement proposals and creates planned
orders, purchase requisitions, or schedule lines for the materials.
6. The system creates exception messages and accomplishes a rescheduling check to
recognize critical situations of the planner that has to be processed manually in the
planning results.
7. The system also computes the actual days supply and the receipt days supply of
the materials.
What Is The Condition To Create The Planned Orders?
Answer :
The condition to create planned orders is that the system creates an internal
procurement proposal and then planned orders are created. In the case of vendor
procurement, a planned order is created by the MRP Controller.
What Is The Transaction Code To Convert Planned Order Into Purchase
Requisition (pr)?
Answer :
MD14 is the transaction code to convert planned order into PR.
. What Is Total Planning?
Answer :
The planning of all materials that are related to requirement planning is known as
total planning . It includes the Bill of Material (BOM) explosion for the materials.
The total planning can be used for a single plant. It can also be used to control the
total planning run for multiplant. Total planning can be used in the following areas:
Several plant areas
One MRP area
Several MRP areas
A combination of plants and MRP areas
Define Planning Time Fence.
Answer :
The fence, which protects the master plan from automatic changes in the master
plan items, is called the Planning Time Fence. The system does not create or update
the order proposals for the planning time fence during the planning run. It
dynamically calculates the end date of the planning time fence beginning from the
planning date. The planning time fence is used for materials planned in MRP,
master schedule items in master production scheduling, and materials in long-term
planning.
Give An Overview Of Inventory Management In Sap System?
Answer :
Inventory management in SAP system helps in recording and tracking of stocks of
materials. It also involves planning and documentation of all goods movements.
What Tasks Are Covered Under Inventory Management?
Answer :
The inventory management is an important part of the material management. The
optimal inventory management not only ensures the uninterrupted supply of the
material at the required time, but also prevents wastage of the items. The material
management covers the following tasks:
Material stock management
Planning, entry and documentation of goods transfers from/to the
inventory
Physical stocking of items
What Is Physical Inventory?
Answer :
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 regulating taxes by placing an accurate value on the
inventory.
What Are The Initial Configuration Steps For Physical Inventory?
Answer :
The steps for the purchase acquisition are as follows:
Defining the default values for physical inventory document
Reporting batch inputs
Recording tolerances for physical inventory differences
Inventory sampling as well as configuration of cycle counting
With Which Modules In Sap Is The Inventory Management Integrated?
Answer :
The inventory management is an important constituent in the SAP MM module. The
business activity of an organization revolves around the inventory of materials that
serves as the input for the manufacturing process or the inventory of prepared goods
for delivery or selling. The material is purchased from the concerned vendors on the
basis of request from the Material Requirement Planning (MRP) module. The
delivered items are recorded in the inventory management as the goods receipt. The
material are then stored either for delivery to the customer or for manufacturing
processes. Inventory management is integrated with other modules, such as FI, SD,
PP, PS and QM.
How Is The Inventory Management Integrated With Mm?
Answer :
The inventory management is directly linked with the material management module
because any movement of goods to/from the inventory comes under the MM
module. The material requirement planning, purchasing, and invoice verification are
some of the MM components that are also linked with inventory management. After
the ordering of the material 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.
What Are The Initial Configuration Steps For Inventory Management?
Answer :
The steps for the inventory management are as follows:
Defining plant parameters
Defining system message attributes
Defining Number Assignment
Defining good issue, transfer posting, screen layout
Maintaining copy rules for reference documents
Setting up dynamic availability checks
Confirmation of the negative items
What Is Goods Movement? What Type Of Documents Is Created After Goods
Movement?
Answer :
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 document and accounting
document.
Why Is Goods Receipt Important To A Company?
Answer :
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 as using a goods receipt moves material into stock, updates the stock
levels, and thereby indirectly enables the production process.
How Do You Post The Goods If The Po Number Is Not Known?
Answer :
If the PO number is not known, you must enter the search criteria for the PO in the
initial screen. As a result, the list of purchase orders is displayed. The desired PO
items can then be copied.
How Can A Goods Receipt Be Posted When Purchase Order Number Is
Unknown?
Answer :
If the goods receipt does not have a purchase order, some companies do not accept
the goods receipt and refuses to accept the delivery. On the other hand, other
companies accept the delivery of materials and keep the materials into the quality or
blocked stock till the situation is resolved. For obtaining the goods receipt without a
purchase order number, the companies use the MIGO transaction. After entering the
required details of the material, the goods receipt is posted and the material becomes
a part of the plant stock.
How Do We Receive Goods From Production?
Answer :
The goods from the production can be posted either to the warehouse or
consumption. They are posted with the same movement type.
How Can The Logical Value For The Stock Items Be Found?
Answer :
You need to use the MC49 transaction code to find the logical value of the stock
items by date.
What Are The Ways Of Receiving Goods?
Answer :
The goods can be received as per the reference to inbound delivery. The following
are the different ways of receiving the goods:
Order
Others
Outbound Delivery
Purchase Order
Reservation
Transport
Transport ID code
What Is Movement Type?
Answer :
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
What Does A Movement Type Control?
Answer :
The movement acts as a controlling factor in inventory management. It handles the
following activities:
Updating of quantity
Updating of consumption and stock
Displaying of particular fields in a document
List The Movement Types For Unplanned Goods Received?
Answer :
The following are the movement types used for unplanned goods received:
501
561
531
How Will An Item Be Returned To A Vendor?
Answer :
While posting the goods to the goods receipt in the purchase order, you need to
enter the items that can be returned to the vendor. There is no need to explicitly
reference the purchase order.
What Is Goods Issue Reversal?
Answer :
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.
Name The Documents That Are Created When A Goods Issue Is Posted?
Answer :
The following documents are created when a goods issue is posted:
Material document
Accounting document
Goods issue slip
Stock changes
General ledger account changes
What Are The Different Ways Of Stock Transfer?
Answer :
A stock transfer can be made physically or logically. In other words, when you
move material from one storage location to another it is said that the stock transfer
is done physically. Whereas when you move stock from the quality inspection status
to the unrestricted status, it is said that the stock transfer is done logically. The
different ways of stock transfer are as follows:
From storage location to storage location
From plant to plant
From company code to company code
What Is Transfer Posting?
Answer :
The physical and logical stock transfers are collectively called the transfer posting.
The stock transfers typically change the stock type, batch number, or material
number. The transfer posting is related to the documentation of the stock changes
resulting from a stock transfer.
How Is Stock Transfer From One Storage Location To Another Done?
Answer :
The stock transfer from one place of location to another place of location is carried
out in a plant. The posting of this kind of transfer is done without entering the value
of the stock material as the management of the items is done within the same plant.
. How Is Stock Transfer From One Plant To Another Plant Done?
Answer :
The transfer of the stock from one plant to another is a bigger activity as compared
to transfers done under the same plant. The material planning as well as accounting
details is affected in case of the transfer of goods within a plant. In case of plant to
plant transfer, the accounting data of the two stocks is affected if they are assigned
to different valuations. In other words, if there are any changes in the value of the
stock items from the source plant to the destination plant, the accounting entries
need to be adjusted accordingly. In this case, the stock value and G/L accounts need
to be updated. The materials planning are also affected, because the stock transfer is
scheduled and implemented according to the guidelines in materials planning. The
plant to plant stock transfer is done by one-step or the two-step procedure but only
the one-step procedure can be planned with a reservation.
How Is The Stock Transferred From Company Code To Company Code?
Answer :
The stock transfer between different company codes is done in a way similar to that
of inter-plant transfer, but differs in the company code. During the stock transfer
process, two accounting statements are created, one for removal of stock from the
source company and the other for receiving in the destination company.
What Is A Stock Posting?
Answer :
Stock posting is defined as a transaction, which occurs when you update an item
quantity in the system, for example, updating the database after goods issue or
goods receipt.
What Do You Mean By Physical Inventory?
Answer :
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.
How Is The Value Of The Cross-company-code Stock Displayed?
Answer :
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.
. What Is Returnable Transport Packaging (rtp)?
Answer :
Returnable transport packaging is a medium used to transport goods between
vendors and customers. Once the goods are received, the returnable packaging is
returned to the vendor. The best example is the crate for cold drinks; it needs to be
returned back after receiving the cold drinks.
What Is Sales Order Stock?
Answer :
The stocks assigned to a sales order but still available in the company
premises is called the sales order stock.
The raw material ordered by the customer for processing a specific order
and finished goods are the type of materials that come under the category
of sales order stock.
What Is Project Stock?
Answer :
The stock available in the company premises to execute a project is called the
project stock. It is allotted to a work breakdown structure element and is specific to
the project only. All accounting treatment in MM is done for the specific project
head.
What Is Invoice Verification?
Answer :
Invoice verification is used to store details of vendor invoices and forms an
important part of purchasing and inventory management. It consists of entering
invoices and credit memos, checking accuracy of invoices in accordance to price,
and checking block invoices.
What Are The Different Types Of Invoice Verification?
Answer :
The different types of invoice verification are as follows:
Invoices based on purchase orders
Invoices based on goods receipts
Invoices without an order reference
Name The T Code For Invoice Verification?
Answer :
An invoice is verified by using the OLMR T code.
How Do You Perform Invoice Verification?
Answer :
Invoice verification is a process of checking the accuracy of an invoice in terms of
the quantity, price, and other related information. The invoice can be issued for
several processes. For example, if an invoice is issued for a purchase order, then the
system checks for the relevant information, such as vendor, material, quantity,
delivery date, and payments details.
Define Ers?
Answer :
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. In addition,
ERS also offers the following advantages:
Using ERS, all the purchasing transactions are quickly closed.
Errors of communication are avoided.
Invoice verification is not prone to price and quantity variances.
With Reference To Which Documents Can Invoice Verification Be Done?
Answer :
In SAP, invoice verification is done on the basis of the following:
Document date, purchase order number, invoice amount, tax amount, and
terms of payment(if required)
Purchase order that comprises vendors, terms of payment(if required),
currency , and invoice items
Purchase order history that comprises quantity and amount
R/3 system settings that comprise the rate at which the tax is calculated
Vendor master record that comprises bank information
What Are The Benefits Of Document Parking?
Answer :
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.
How Do You Display The Parked Document?
Answer :
You can display the parked documents by using either FB03 or FBV3. The FB03
transaction code displays all the posted documents; whereas, the FBV3 code shows
only the parked documents that have not been posted to the expenditure balance.
What Is Stochastic Block?
Answer :
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.
What Are The Different Accounts Used In Invoicing?
Answer :
Different accounts used in invoicing are as follows:
Vendor accounts
Stock accounts
GR/IR clearing accounts
Tax account
Price differences account
Cash difference clearing account
Freight clearing account
What Are The Different Types Of Variances In Invoices? Describe Them.
Answer :
The different types of variances in invoices are listed and described as follows:
Quantity Variance— If there is a difference between the quantity
mentioned in the invoice and the quantity delivered.
Price Variance— If there is a difference between the price mentioned in
the invoice and in the purchase order.
Quantity and Price Variance—If there are differences in both the
quantity and price.
Order Price Quantity Variance — If there is a difference between the
price per ordered quantity, such as $50 per piece is mentioned on the
purchase order but the invoice contains $60 per piece.
Why Does The Invoices Get Blocked?
Answer :
Invoices can be blocked due to the following reasons:
Variance in the invoice item
Amount of an invoice item
Stochastic block
Manual block
What Happens When An Invoice Is Blocked? What Are The Different Ways
To Block An Invoice?
Answer :
When an invoice is blocked, the invoice amount cannot be paid to the vendor.
Blocking an invoice also blocks the individual items. The different ways to block an
invoice are listed as follows:
Manual Block
Stochastic or Random Block
Block due to Amount of an Invoice Item
Block due to Variance of an Invoice Item
How Can We Post An Invoice Directly Without Any Reference?
Answer :
In case of invoices posting without a reference, proposed values for the invoice
items are not displayed by the system, because the system does not determine any
purchase order items and posted goods receipt for the invoice. As a consequence,
information related to the accounts changed by the offsetting entry for the vendor
line item,is not found in the database of the system.
What Is The Menu Path To Create A Document/e-mail Notification For Your
Supplier?
Answer :
The following is the menu path to create a document/e-mail notification for your
supplier:
Select Material Management-> Logistics Invoice Verification -> Message
Determination.
What Is The Difference Between Gr-based Iv And Po-based Iv?
Answer :
GR-based IV means Goods Receipt based Invoice Verification. In this process, each
receipt of the individual goods is invoiced separately.

On the other hand, PO-based IV means Purchase Orders based Invoice Verification.
In this process, all the items that are in the purchase order list are arranged and are
placed together. It is not taken into consideration whether the item is received in a
single delivery or multiple deliveries. After all the items are collected, these items
are then posted in the form of one single item.
How Do You Create The Vendor Account Group?
Answer :
Perform the following steps to create the vendor account group in SAP:
Select Display IMG->Financial Accounting->Account Payable/Receivable->Vendor
Accounts-> Master Records-> Preparation of Creating Vendor Master Records-
>Define Accounts Groups with Screen Layout /Define Screen Layout Per Activity.
What Is The Purpose Of Material Valuation?
Answer :
Material valuation in SAP MM module is necessary to determine the stock value of
materials.
How To Determine Stock Value?
Answer :
The stock value of the materials is calculated using the following formula:
Stock value = Stock quantity * Material price.
How Material Valuation Is Associated With Financial Accounting?
Answer :
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.
What Are The Factors Controlling Material Valuation?
Answer :
The factors that control material valuation are:
1. System settings
2. Material master record
What Is Valuation Area?
Answer :
Valuation area is the organizational level at which the material valuation is carried
out.
Define Valuation Class?
Answer :
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.
What Is The Significance Of Account Assignment Category?
Answer :
Account assignment category determines the account assignment details that are
required for the purchase order item, such as cost center or account number. It is
useful in SAP MM as it helps in determining the following:
1. The type of account assignment
2. The accounts that will be charged when you post the invoice or goods receipt
3. The account assignment data that you should provide
What Are The Different Types Of Account Assignment Categories?
Answer :
The different types of account assignment categories are:
Single account assignment: Specifies one account assignment for an item
in the purchase order
Multiple account assignment: Allocates the costs associated with the
purchase order item
What Is Lifo Valuation?
Answer :
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. For example, if the stock is increased then a
layer is created for that stock. However, to use the LIFO, you have to configure it.
What Is The Release Procedure?
Answer :
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.
What Is Release Strategy? How Many Release Points Can Be Involved In A
Release Process?
Answer :
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.
Can You Release The Po Item By Item When You Have A Multiline-item Po?
Answer :
No, you cannot release the PO item by item. PO can be released at the header level
by using the with classification release procedure.
How Are The Release Procedures For Pr And Po Defined?
Answer :
The transaction codes ME54 and ME29N are used to define the release procedures
for PR and PO, respectively.
How To Release Blocked Purchase Documents?
Answer :
You can release a blocked purchase document by using your release code. This
process is called the release transaction. After you have released the document, you
can also cancel the document using the same release code.
How To Reject Approvals In Sap-r/3? Will It Affect The Sap Business
Workflow?
Answer :
You can use the ME54N transaction code or purchase requisitions and ME29N
transaction code for purchase order to reject approvals in SAP R/3. This does not
affect the SAP business workflow.
How Many Procedures Are Available To Release Purchase Requisition?
Answer :
There are two types of procedures available to release purchase requisition:
With classification: In this procedure, you can release the purchase
requisition both at item level and in total.
Without classification: In this procedure, you can release the purchase
requisition only at item level.
How To Release Purchase Order? Which Transaction Code Is Used To Display
As Well As Reset The Release Of Po?
Answer :
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.
How Many Types Of Release Procedure Are Available For Po?
Answer :
There are two types of release procedures available for PO:
Individual release: In this type of release procedure, you can release only
one item at a time.
Collective release: In this type of release procedure, you can release all the
items at a time but using the release code.
What Is A Release Criterion?
Answer :
The release criterion defines the strategy with which a purchase requisition or an
external purchase document is released. The release criteria contains the
characteristics and the values of the characteristics which determine the status of the
document, that is, either blocked or not blocked (a characteristic can be the total
value of the document, say greater than $100,000). The criterion can be based on
any one of the following or a combination of these:
i. Account assignment category
ii. Material group
iii. Plant
iv. Total value
What Is Release Code?
Answer :
The release code is a two-character field or ID that represents the person responsible
for the approval of the release procedure.
What Do You Mean By Release Group?
Answer :
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.