SAP MM Questions and Answers :

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

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

2. List out the essential components of material management.

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

3. What are the benefits or uses of material management?

 Material valuation
 Multi-location inventory
 Bin management
 The lot and serial traceability
 Product life cycle management
 Inventory replenishment
 Scheduling and resourcing

4. What are the features of material management?

 Purchasing
 Production and material control
 Non-production stores
 Transportation
 Material handling
 Receiving

5. What is material requirement planning (MRP)?

It is a module in SAP enterprise resource planning. It is a type of planning tool to

help production and procurement planners to create feasible and realistic plans
which helps to quickly initiate procurement and production process.
6. What is consumption-based planning (CBP)?

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

7. What is the difference between MRP and CBP?

In material requirement planning, the prediction of material requirement is based on

sales and operations planning while in, consumption-based planning the prediction
of material requirement is made, based on historical demand for materials.

8. What is Master production schedule (MSP)?

It is a plan for individual commodities to be produced in each time period such as

staffing, production, etc. It is mostly linked with manufacturing in which the plan
denotes when and how much of each product will be demanded.

9. What is a planned order in material management?

A planned order is sent to an industry and is a material requirement planning request

for the procurement of a particular material at a determined time. It specifies when
the internal material movement needs to be made and the amount of material that is
demanded.

10. What is production order and purchase order?

A production order determines which material is to be prepared, at which location,

and at what time and how much quantity is required. It also defines which
components and sequence of operations are to be used and how the order costs
are to be resolved.

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

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

11. What is the process order?

Process Orders (PP-PI-POR) are the central component used for the accurate
planning and execution of process manufacturing. A process order represents the
production of batches (materials) in a production run or the rendering of services.
12. What is a transaction code in material management?

A transaction code (or t–code) consists of letters, numbers, or both, and is entered

in the command field at the top of any SAP GUI screen. Each function in SAP ERP
has an SAP transaction code associated with it. You can directly access any
function in SAP using t-codes.

13. What are contracts in material management?

A contract is a long-term agreement with a vendor to supply a material or provide a

service for a certain period of time. These are specified consequently in release
orders issued against the contract when the customer requires them.

14. Define purchase requisition.

A purchase requisition is a primary document which is used as part of the

accounting method to launch a merchandise or supply purchase. By processing a
purchase order, suitable controls can monitor the legitimacy of purchase, as well as
identify the business requirement for the products.

15. How do you create and release purchase requisition in SAP material
management?

Purchase requisition creation can be done in T-code ME51N and is a straightforward

process:

1. Execute ME51N transaction.

2. Purchase requisition document type: NB – standard.
3. Source determination: ON or OFF.
4. Header note.
5. Material: material number.
6. Quantity and UoM.
7. Storage location: in which the material is stored.
8. Vendor: automatically determined by using source determination – field
number
9. Tracking number: covered in previous topics, a desired value can be
entered manually
10. Valuation price: copied from material master data if maintained there, if
not must be entered manually (if this field is not set as optional).
11. After entering the desired information in the fields, we can save
transaction data.
16. What is a special stock in material management?

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

17. Mention the different types of stocks.

A. Valuated Stock

1. Unrestricted Stock
2. Quality Inspection Stock
3. Blocked Stock

B. Non-Valuated Stock

C. Special Stock

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

18. Define consignment stock.

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

19. What is meant by master data?

Master Data is basically created centrally and is valid for almost all the applications.
It remains constant over time but it is required to update it on a regular basis. For
example, the Vendor is a type of master data and he is used for creating purchase
orders.

20. What is master data management?

Master data management is a comprehensive method of enabling an enterprise to

link all of its critical data to a common point of reference. When properly done, MDM
improves data quality, while streamlining data sharing across personnel and
departments. In addition, MDM can facilitate computing in multiple system
architectures, platforms, and applications.
21. What is inventory management?

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

22. What is movement type and mention a few standard movement types?

Movement types are used as indicators of what is the purpose of the goods
movement  (e.g. from the storage location to a storage location, receipt from the
purchase order, issue for the delivery, receipt from production).

23. Define stock population.

Stock population is the total of all stock management units included in an inventory
sampling. These stock management units are uniquely defined through the allocation
of the stock management levels to a given inventory sampling. As a result, the stock
population is also defined when you allocate stock management levels.

24. What is returnable transport packaging (RTP)?

Returnable transport packaging (RTP) is a multi-trip packaging medium in which

goods can be transported more than once between retailers and customers.

25. What are quotations in SAP material management?

Quotations in SAP MM are certain requests for vendors which provides us with some
information about their best prices, terms and conditions, schedules of deliveries and
other information in order to select the best source for our procurement needs.

26. What is a request for quotation (RFQ) document?

RFQ or Request for Quotation also known as Invitation for Bid is a document which
an organization submits to one or more potential suppliers to invite them for the
bidding process for a product or service.
27. Mention the RFQ process.

For creating a request for quotation RFQ :

 Enter the transaction code or t-code as ME41 (This will lead you to ‘create
RFQ’ screen)
 Enter RFQ type as ‘AN’
 Enter the quotation deadline i.e the last date by which a vendor must submit
their quotation.
 Enter Purch organization and purchasing group
 Enter the delivery date and Plant
 Click on Enter
 Next, you’ll see a new screen wherein you need to fill the item codes.
 After entering the item codes, enter the vendor details

You can create more requests with different vendor details.

28. What is a request for proposal (RFP)?

RFP or Request for Proposal is a document which requests a proposal, which is

generally made through a bidding process by an agency or a company for the
acquisition of some commodity, asset, or service to any potential suppliers to submit
business proposals.

29. What is a request for information (RFI)?

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

30. What is the difference between RFQ, RFP, and RFI?

RFI RFP RFQ

What is
Gathers vendors Gets the best
invoice Creates the best project
information price for a project
processing?

The overview is Project and

Status of
Not clearly defined understood, yet the details are clearly
Solution
details need to be defined identified

Key Provides information Statement of work for a

Pricing details
deliverables about the vendors project
31. What is invoice processing?

Invoice processing is a process a company’s account payable uses to manage

supplier invoices. It begins when you accept an invoice and ends when payment has
been made and reported in the general ledger.

32. What is movement in goods out (MIGO)?

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

33. What is movement in receipt out (MIRO)?

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

34. What do you mean by goods receipt and post goods receipt?

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

Post-Goods Receipt is used to post the receipt of goods with reference to the
purchase order with which the goods were ordered. If the material is delivered for
some purchase order, it is important for all of the departments involved that the
goods receipt entry in the system references this purchase order.
Set 2

1) 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.

2) 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

3) Mention what are the types of special stock available?

The types of special stock available are subcontracting, consignment, project,

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

4) 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.

5) 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).

6) 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.
7) 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

8) 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.

9) 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.

10) Mention what is the transaction code used to extend the material view?

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

11) 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

12) 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.

13) 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

14) 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.

15) 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 )

16) 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.

17) 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

18) 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

19) 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

20) 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

21) 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.

Set 3

1. What is the difference between CBP and MRP?

The main difference between CBP and MRP 

CBP MRP

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

Forecasting, planning which is time phased and reorder Since this is used for the planning of the future
point are used here everything depends on the size of the lot tha
was previously given.

2. What do you know about SAP MM?

SAP has a functional module which is known as SAP MM. It looks after the management of the
material and obtaining handling. The module consists mainly about master data, configuration of
system and transactions to complete the procurement to pay process

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

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

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

The structure in the MM module is a ladder in which various organizational unis are arranged
designed according to the functions and tasks of each of them. The units that make the structure
of the organization are as given below. 

The first is the client and this unit is independent. This unit has a different record system and well
as its own table sets. The second is the company code. This is one of the smaller units of the
organization. For the need of external report one can make a self-reliant account sets for the unit
of company code. The third is the plan. This is where the supplies are formed and the services
and goods are given. The industry can be broken down into different plants based on
maintenance, supplies, production, procurement etc.  The next is the location of the storage. The
produced goods are kept in this unit. The next is the number of the warehouse this shows the
system of the warehouse. It is different for every area of storage and organization. After that is
the storage type which tells one the different areas such as issuing area, area for picking up the
goods etc. The next is the organization of the purchasing which is the unit that negotiates with
others for purchasing and also obtains the services and the material. The next is the group
purchasing which a code for an individual buyer or a group who actually purchase the materials.
This unit is also partially involved in negotiating and obtaining the goods.

6. Explain in detail about order of purchase?

This is a final and formal confirmation of the essential materials to be supplied by the vendor to
the industry. This will involve the all the names of the essential materials with the equivalent
plant. The details of the purchase which would include the code of the company, vendor’s name,
the delivery date of the materials. 

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

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

8. What are the important criteria in purchasing?

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

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

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

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

11. What is the code for deleting a particular batch?

The code for deleting a batch is MSC2N. Alternatively, if one flags the batch of the master record
then the batch record can be deleted completely. 

12. How is a receipt posted?

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

13. What do you mean source list and what is the code of the source list?
The source list is to identify the home of the supply from where the materials come. The code for  
creating the source list: ME01. 
14. What is essential for creating a record of purchase information?
The essential information for making a record of purchase information is as follows
The number of the material, the part number of the manufacturer, the number of the vendor, the
level code of the organization.
15. What is planned delivery and GR processing time?
The meaning of planned delivery is the number of business days in which the person is expected
to receive the materials and goods. The GR processing time is the number of business day in
which the person has to inspect and place the material in the storage, after obtaining the goods
and materials.

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

17. What is known as RFQ?

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

18. Explain what is reservation?

Reservation is the blocking of the stock beforehand so that its availability is ensured later in time.
It ensures that the stock is made available and can be used as per requirement.

19. What is the code used for reservation?

The Transactional code used for reservation is MB21.

20. Tcode for Stock overview?

MMBE.

21. 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. 

22. 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.  

23. 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. 
 
24. 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.

25. 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.  

26. 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. 
 
27. 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. 

28. How are parked documents showed?

Parked documents are showed with the codes FBV3 and FB03. FBV3 displays the parked
sheets whereas FB03 shows all the posted sheets. It is useful to use FBV3 if one needs to know
if any documents still need approval or if they still need completion. 

29. What are the different types of ERPs?

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

30. What is NetWeaver?

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

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

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

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