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400+ TOP SAP MM Interview

Questions and Answers

SAP MM Interview Questions for freshers and

experienced :-
1. What Mrp Procedures Are Available In Mm-cbp
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(consumption Based Planning)?

Various material planning methods are used in MRP (Material

Requirements Planning).

Reorder point procedure (VM)

Forecast-based planning (VV)
Time-Phased materials planning (PD)
These are specified in material creation (MM01) under the
MRP 1 tab.

2. Under What Conditions Are Planned Orders Created?

What May Planned Orders Be Converted To And How Is
That Conversion Accomplished?

Planned orders are always created when the system creates an

internal procurement proposal. In the case of vendor
procurement, the MRP Controller may create a planned order or
directly create a PR. The next step for a planned order is to be
converted to a PR so it goes to purchasing and is to eventually
become a PO. A planned order can be converted to a PR using
transaction code MD14.

3. What Are The Organizational Levels Of The

Enterprise Structure In R/3?

The top level of the organizational plan is the Client, followed by

Company Code, which represents a unit with its own accounting,
balance, P&L, and possibly identity (subsidiary). The next level

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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.

4. What Are The Different Ways To Organize Purchasing

Organizations?

A Purchasing Organization may be responsible for multiple plants

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

5. What Are Special Stocks?

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.

6. What Are Some Of The Options Available To Transfer

Materials From One Plant To Another?

Although it is possible to transfer materials from one plant to

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

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7. What Are Some Of The Common Stock Transport

Order Movement Types?

One step transfers of materials can be posted using MT 301. Other

various transport scenarios differ in the MTs by the Goods Issues
and Good Receipts. Common Goods Issues may use MTs 303, 351,
641, or 643 in the STO. A STOs Good Receipt often uses MT 101.

8. What Is The Difference Between A Purchase Order

And A Purchase Requisition?

A Purchase Requisition is a document type that gives notification

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

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9. What Is An Indirectly Created Purchase Requisition?

An indirectly created Purchase Requisition has been initiated by

CBP, the PS Project System, PM Maintenance, and Service
Management, or PP Production Planning and Control. The
“directly created” Purchase Requisition, on the other hand, is
created by a person manually in the requesting department
specifying what materials/services, units, and a delivery date.

10. What Is An Rfq And How Is It Different From The

Quotation Form?

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.

SAP MM Interview Questions

11. What Are The Transactions That Will Result In A

Change Of Stock?

A Goods Receipt is a posting acknowledging the arrival of

materials from a vendor or production, which results in an
increase in warehouse stock, a Goods Issue which results in a
reduction in stock, or a Stock Transfer moving materials from one
location to another.

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12. When Would It Be Prudent To Post Goods

Movements Via The Shipping Application?

If picking, packing, and transportation operations need to be

planned in detail. Also, in shipping, you can manage movements
like returns from customers, vendors, and returns to stock.
Movement Types in shipping start with a 6.

13. What Is A Reservation?

A Reservation is a document used to make sure that the

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

14. Can You Manually Generate A Purchase Requisition

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Referencing A Purchase Order Or A Scheduling

Agreement?

A Purchase Requisition cannot be created with reference to either

of these, as they are documents controlled by the purchasing
organizations.
Requirements can be automatically generated with MRP that
reference a Scheduling Agreement if the source list is maintained
for item-vendor combination.

15. How Is Gr/ir Account Related To Inventory?

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

16. How Do Planned And Unplanned Consumption

Affect Movement Types?

In a customized Movement Type, you have defined which

consumption value gets posted in the movement. Many will
always be planned or unplanned, but for some there is a
dependency on if the movement references a reservation. This
would be planned consumption.

17. What Are Departmental Views?

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

18. Is Material Data Valid For All Organizational Levels?

Control of master data depends largely on how each company sets

up its Organizational levels – centralized or decentralized. Some

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material data is valid for all organizational levels while other data
is valid only at certain levels. (I.e.: client, plant, sales org., etc.).

19. Why Would You Want To Create Physical Inventory

Sheets To Perform An Inventory Cycle-count On A
Material Or Materials?

For a cycle counting procedure, physical inventory documents

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

20. What Is The Difference Between A Blanket Purchase

Order And The Framework Order?

In general, the Blanket POs are used for consumable materials

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

21. What Is Release Procedure?

Release Procedure is approving certain documents like PRs or

POs by criteria defined in the configuration. It is sensible to define
separate release procedures for different groups of materials for
which different departments are responsible, and to define
separate procedures for investment goods and consumption
goods.

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22. How Do You Display Parked Documents?

There are two possible transactions to use here. They are FB03
and FBV3. The first shows all posted document types. This is the
best choice if you think the document has been posted to you
actual balance. The later shows only parked documents that have
not yet posted to your expenditure balance. These documents are
still encumbrances. It is the best choice if you are trying to find
which documents are still awaiting completion or approval. This
transaction is very similar to the FBV2 transaction used with
P-Card reconciliation and marking parked documents complete.

23. How Do You Perform An Invoice Verification?

If the Invoice refers to an existing document (PO, etc.), then the

system pulls up all of the relevant information like Vendor,
Material, Quantity, Terms of Delivery, and Payment Terms etc.
When the Invoice is entered, the system will find the relevant
account. Automatic posting for Sales Tax, Cash Discount,
Corrections etc. When the Invoice is posted, certain data such as
Average Price of Material and Price History are updated. Use
Transaction MIRO.

24. How Do You Perform A Goods Issue?

Use Transaction MIGO. On the initial screen, enter the header

data (you need not enter the Movement Type or the Plant as these
are automatically copied from the order). Choose Goods Issue
,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.

25. Where Do You Perform A Goods Issue?

Use Transaction MIGO.

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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”.

26. How Will Items Be Returned To The Vendor?

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

27. How Do You Create A Source List?

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

28. How Do We Get A Proper List Of Vendors To Send

An Rfq?

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

29. What Are The Components Of The Master Data That

Details A Companys Procurement Used By, Vendor
Evaluation For Example?

The key components of Master Data are: Info Record (ME11),

Source List (ME01), Quota Arrangement (MEQ1), Vendor

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(MK01), Vendor Evaluation (ME61), and Condition Type (MEKA).

30. What Is Vendor Evaluation And How Do You

Maintain It?

Vendor Evaluation helps you select the Source of Supply by a

score assigned to a particular vendor. The scores are on a scale of
1 to 100 and are based on differing criteria. Use Transaction ME61
and enter the Purchasing Organization and Vendor Number.

31. How Do We Create Consignment Stocks?

Everything is the same as a normal PR or PO, except: Enter the

item category “K” for the consignment item. This ensures that the
Goods Receipt is posted to the consignment stores and an invoice
receipt cannot be generated for the item. Also, do not enter a net
price.

32. Can You Change A Purchase Requisition After It Has

Been Created?

Yes. Use Transaction ME52N. Check to see if the PR has already

had a PO issued against it. If so, you must inform the Purchasing
Group. Check if the PR has been approved. If so, you may only
make changes to a limited extent and may be subject of approval.
Check if the PR was created by MRP. In this case, you don’t have
much control over the modification process.
All changes to items are logged and stored. Information stored
includes when the information was changed, who changed it,
what the changes were, etc. Select the desired item in the item
overview and choose Go To Statistics Changes.

33. What Is The Difference Between A Pr With A Master

Record And Without A Master Record For The Material
Being Ordered?

If the master record exists, then all of the information about the
Source List, Information Record, and Vendor Evaluation already
exist in the system. If we don’t have a Master record for the
material we are ordering, the material is generally being ordered

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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”).

34. How Do We Know If A Po Has Been Issued?

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.

35. Where Is Material Master Data Saved?

Tables MARA and MARC.

36. Where Is The Header Level And Item Level Data

Saved In A Po?

In SE11, we can see this information in table EKKO and EKP0

respectively.

37. How Do You Generate An Automatic Po After

Creating A Pr Using A Particular Material?

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

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(MD01). Enter ME59 for automatically creating POs from PRs.

38. How Can You Disable A Reservation In Mrp?

Use Transaction Code OPPI to check “block stock”.

39. How Do You Find The Logical Value For Stock Item
By Date?

Use Transaction MC49.

40. If You Have Created A Custom Movement Type And

You Get A Not Allowed Error, Where Should You First
Look For The Cause?

Using Transaction Code OMJJ, check “Allowed Transactions” for

the customized Movement Types.

41. How Do You Display A List Of All Reservations In

The System?

Run report RM07RESL.

42. How Can You Post A Goods Receipt If The Po

Number Is Not Known?

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.

43. How Do You Perform A Goods Receipt?

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.

44. How Can An Invoice Be Verified?

Transaction Code OLMR may be utilized.

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45. How Can You Process Vendor Returns Without A

Purchase Order Reference?

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.

46. What Are Some Of The Initial Configuration Steps

For Physical Inventory?

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.

47. What Are Some Of The Initial Configuration Steps

For Inventory Management?

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 ().

48. When, In Initial Configuration, Why Would You

Have To Setup Stock Transport Order?

If it is required to carry out an inter-plant Stock Transfer through

SD, then this configuration is required and must be carried out.

49. What Are Some Of The Initial Configuration Steps

For Purchase Requisitions?

Define Document Types, Processing Time, Release Procedure

(with and without classification), Setup Authorization Check for
G/L Accounts, Define Number Range.

50. What Data Does The Information Record Contain?

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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.

51. How Do You Create A Vendor?

Use Transaction Code XK01. Add the Vendor name, Company

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

52. What Are The Lot Size Attributes A Material Can

Posses?

Lot Sizing dictates the reorder quantity for a material. A material

can have a static, periodic, optimum, or fixed lot size.

53. What Are Some Of The Data Points Provided By

Purchasing For A Material?

Some of the key inputs when creating a material are Base Unit of
Measure, Purchasing Group, Reminder days, tolerance levels,
shipping instructions, GR processing time, JIT schedule indicator,
Critical part (), etc.

54. How Do You Create A Material?

Use Transaction Code MM01. Name the material, choose an

industry sector, choose a material type, create or copy the views,
add a basic description, give it’s attributes/values, MRP
information, reorder point, accounting valuation, warehouse
management information and then save the data.

55. What Are The Main Purchasing Tables?

EKBN Purchase Requisition

EBKN Purchase Requisition Account Assignment

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EKAB Release Documentation

EKBE History of Purchase Document

56. What Are The Key Fields For The Material Master?

Material Groups, External Material Groups, Divisions, Material

Status, Labs & Offices, Basic Materials, Storage Conditions,
Temperature Conditions, Container Requirements, and Units or
Measure Groups.

57. Will Roh Have A Sales View? Will Fert Have A

Purchasing View?

They shouldn’t because ROH type materials are procured

from the outside not sold and FERT type materials are
created inside and aren’t procured.
In some special cases, we have to sell raw materials (ROH)
and buy finished goods (FERT) from outside sources. The
views must be extended in these cases using transactions
OMS2 and MM50.

58. How Do You Configure The Release Procedure?

Use Transaction OMGQ.

59. How Do You Create A Class?

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.

60. How Do You Change Characteristic?

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

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characteristics on the value assignment screen, Allowed Values,

Default Values that are set automatically on the Value Assignment
Screen.

61. How Do You Define A Release Procedure For Prs

And Pos?

Use Transaction ME54 and ME28 respectively.

62. How Can One Keep Users From Using Standard Mm

Movement Types?

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.

63. What Needs To Be Present In Order For Material

Type To Be Automatically Copied From One View To
Another?

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.

64. How Do You Determine Which Views Of A Material

Need To Be Added Or To See Which Plants A Material
Has Been Extended To?

You can use transaction MM50.

To extend a material to a different plant requires selecting the
new plant on the organizational level screen. Note that all views of
a material are not extended unless they were selected on the
initial screen. In addition, each plant may have a different system
configuration requiring additional inputs on each of the
departmental screens. Material changes made in one plant do not
change that material in other plants.

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65. When Creating A New Material, What May Prompt

Some Of The Possible Material Types?

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

66. When Can A Production Resource/tool Be Defined

As A Material?

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.

67. What Views Are Possible For A Material?

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.

68. What Sap Program Is Used To Update Or Create

Material Master Records?

RMDATIND is used to update Material Master Records and can

be used for such assignments as extending all materials to a new
plant.

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69. Where Can You Dictate How Planned Orders Are

Converted Into Requisitions In Mrp?

Look at the Transaction Code OPPR indicator. Assign proper

indicator.

70. What Are Some Of The More Important Materials

Management Tables?

EINA contains general data of the (Purchasing) Information

Record; EINE includes Purchasing Organization of the same.
MAKT is the Materials Description table, MARA-General
Materials data, MARC-Plant Data for Materials, MARD-Storage
Location Data for Material, MAST-Material to BOM Link, MBEW-
Material Valuation, and MKPF-Header Material Document.
Some of the tables that directly pertain to the document types are
T156 Movement Type and T023/T024 Groups Material and
Purchasing.

71. How Are The Various Mm Configuration

Transactions Accessed?

Transaction Codes OLMD accesses MM-CBP, OLMB accesses

MM-IM, OLME accesses MM-PUR, OLML accesses MM-
Warehouse Management, OLMS accesses Material Master Data,
and OLMW is the proper transaction for valuation and account
assignment.

72. How Do You Access The Materials Management

Configuration Menu?

Transaction Code OLMS has a host of options that are not

accessible through the IMG.

73. How Do You Set Price Control For Receipts

(goods/invoice) Telling The System How To Value
Stocks?

Transaction Code OMW1 allows you to set price control to S

(Standard Price) or V (Moving Average Price).

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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.

74. Why Would An Organization Need To Allow

Negative Stocks?

Negative Stocks are necessary when Goods Issues are entered

necessarily (business process reasons) prior to the corresponding
Goods Receipts and the material is already located physically in
the warehouse.

75. What Is An Invoice Verification?

The Invoice Verification component completes the material

procurement process and allows credit memos to be processed.
Invoice Verification includes entering invoices and credit memos
that have been received, checking accuracy of invoices with
respect to price and arithmetic, and checking block invoices (these
are the ones which differ too much from the original PO).

76. What Is The Source List?

The Source List identifies preferred sources of supply for certain

materials. If the Source List has been properly maintained, it will
identify both the source of a material and the period of time in
which you can order the material from the source.

77. What Is A Quotation?

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

78. Give Some Examples Of The Information Relating To

A Materials Storage/warehousing?

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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.

79. What Are The Various Steps In The Mm Cycle From

Material Creation Through Invoice?

The following creates a rough picture of the MM Cycle. Create

material, create vendor, assign material to vendor, procure raw
material through PR, locate vendor for certain material,
processing GR, goods issue, and invoice verification.

80. What Is A Source List?

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.

81. What Is A Price Comparison?

Perform a price comparison using ME49 and one may compare

quotations from different vendors.

82. What Is A Material Type?

A Material Type describes the characteristics of a material that are

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

83. If You Have A Multi-lineitem Po, Can You Release

The Po Item By Item?

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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.

84. What Is Sap? How Is It Used In Industries?

SAP is the most popular Enterprise Resource Planning (ERP)

software application used to provide enterprise business
solutions. It was first introduced in 1972 in Mannheim, Germany.
SAP stands for Systems Applications and Products in Data
Processing.

SAP provides complete business solutions by integrating various

business tasks, such as sales, purchase, and production. It takes
information from one business process and incorporates the same
into another business process, thereby speeding up business
processes. For example, the information about the raw material in
stock is used by the production department to prepare products.
It is most widely used in industries, because it automates business
processes and provides real-time solutions for them, that is, it
updates and processes the data very quickly.

85. What Is Sap R/3?

SAP R/3 is an ERP software officially launched in 1992. It is a

replacement for the SAP R/2 mainframe computing based ERP
software and is based on client-server computing. With the advent
of client-server computing, SAP AG, Germany (founder of the SAP
ERP software), launched SAP R/3 in the market to provide client-
server based real-time business solutions. The letter R in SAP R/3
represents the real-time business data processing, while 3
represents the three-tiers in client-server computing.
The three-tiers in client-server computing are: Presentation
(Client), Application (Business logic), and Database (Stores the
actual business data).
SAP R/3 integrates the various business areas, such as sales,
purchase, and procurement, by using its different functional

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modules, such as Material Management (MM), Sales and

Distribution (SD), Financial and Controlling (FICO), and Human
Resource (HR).
Different versions of SAP R/3 are 3.1i, 4.0b, 4.5b, 4.6b, and 4.6c
with the latest version 4.70.

86. What Are The Core Functionalities Of The Sap

System?

The core functionalities of the SAP system consists of Sales and

Distribution (SD), Materials Management (MM), Financial
Accounting (FI), and Production Planning (PP). In the first phase,
the companies implement the SAP software with these core
functionalities and later in the second and third phase, they may
also introduce other functionalities, such as Controlling (CO),
Warehouse Management (WM), Human Resource (HR). However
the type of modules and the phasing of implementation solely
depends on the type of industry the client works as well as the
organization’s readiness and urgency for the need to adopt
integrated enterprise system such as SAP.

87. How Can You Define An Mm Module? What Is Its

Importance In Sap R/3?

MM stands for Material Management and is a part of the Logistic

functional area of SAP R/3. It is an important SAP R/3 module,
because it helps manage broad-level business activities, such as
procurement, valuation and assignment, batch management and
material storage. Since the materials are the most precious
resource of an organization, extreme care needs to be taken in all
the processes related to materials management. Efficient material
management is the essence of the MM module of SAP R/3.

88. How Is The Mm Module Integrated With Other

Modules Of Sap?

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

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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.

89. What Are The Levels Of Organizational Units Of

Enterprise Structure In R/3?

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.

90. Define Client. What Is Its Importance In Sap?

A client can be defined as a person, company, or an organization

that purchases goods from another person, company, or
organization and pays for that. In terms of SAP, a client can be
defined as a unit that has its own master records and a set of
tables. It is important in SAP because it stores and maintains data
about the organization where SAP is implemented.

91. How To Create A Client In Mm Module?

You can create a client in MM module either by using the

transaction code SCC4 or by performing the following steps:
1. Click SAP menu–>Tools–>Administration–>Client
Administration.
2. Double-click SCC4 Client Maintenance. The display View
“Clients”: Overview screen appears.
3. Click the Display -> Change button. The Information dialog box
appears.
4. Click the Continue button. The Change View “Clients”:

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Overview screen appears where you can create a new client.

92. How To Create A Company Code In Sap?

In SAP, the company code is created using the transaction OX02.

The company code field is defined as a four-character
alphanumeric string. You can create a company code in SAP by
performing the following steps:
1. Open the SAP Customizing Implementation guide.
2. Click Enterprise Structured–>Definition–>Financial
Accounting–>Edit, Copy, Delete, Check Company Code. The
Choose Activity dialog box appears.
3. Double-click Edit Company Code Data. The Change View
“Company Code”: Overview screen appears where you can create
a company code.

93. How Can You Assign A Company Code To A

Company In Sap?

You can assign a company code to a company by performing the

following steps:
1. Open the SAP Customizing Implementation guide.
2. Click Enterprise Structured Assignments Financial Accounting
-> Assign company code to company. The Change View “Assign
Company Code – Company”: Overview screen appears where you
can assign a company code to a company.

94. How Many Charts Of Accounts Can Be Assigned In A

Company?

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

95. How Many Company Codes Can Be Assigned In One

Chart Of Accounts?

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

96. How Many Company Codes Can Be Assigned To A

Company?

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You can assign one or more company codes to a company.

97. What Is A Plant In Mm?

A plant is an organizational unit, where materials are produced or

goods and services are provided. In SAP, it is represented by a
unique four-digit alphanumeric number. A plant is allocated to
one company code and a company can have many plants. In an
organizational unit, a plant can be at one of the following
locations:

Corporate headquarters
Central delivery warehouse
Manufacturing facility
Regional sales office

98. How Many Company Codes Can Be Assigned To A

Plant?

You can assign only one company code to a plant.

99. Can A Company Code Be Assigned To Many Plants?

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

100. Define Storage Location In Sap.

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

101. Can Storage Locations Be Created Automatically?

How Can They Created Automatically?

Storage locations can be created automatically when an inward

goods movement for a material is performed. In order to create a
storage location automatically, open the Sap implementation
guide and then follow this path:
Materials Management->Inventory Management and Physical
Inventory->Goods Receipt->Create Storage Location

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Automatically.

102. Can Two Plants Have A Common Storage Location?

A storage location is a unique four-character alphanumeric key;

therefore, it cannot be common for two plants.

103. What Is The Menu Path To Configure The Storage

Location?

You can configure the storage location by navigating the following

menu path:
Select Display IMG ->Enterprise structure
->Definition->Maintain storage location

104. What Are The Different Ways Of Organizing

Purchasing Organizations?

The different ways to organize purchasing organizations is

distributed purchasing and centralize purchasing. Distributed
purchasing represents multiple purchasing organization for
multiple plants and centralized purchasing represents one
purchasing organization per plant.

105. What Is The Reference Purchasing Organization In

Sap?

The reference purchasing organization can be defined as an

organization whose conditions or contracts are linked to other
purchasing organizations. This organization can make conditions
or contracts that can easily be used in other purchasing
organizations.

106. What Is Master Data In Mm Module?

Master data in MM module acts as a reference data defining

various business entities and plays a key role in the core operation
of a business.

107. How Is Master Data Important In Mm Module?

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A Master Data in MM module contains all the basic information

needed to manage a material. The data is stored and sorted on the
basis of different criteria, such as the descriptive nature of the
material (size, dimension, and weight), control function of the
material (material type and industry sector). Apart from the data
maintained by the user, it also stores data that is automatically
updated by the system (such as stock levels).

108. What Is A Material Master File?

The complete information related to managing a material is

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

109. Why Are Material Master Records Used In Sap?

Material master records are used in the SAP R/3 system to

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

110. How Is The Information Of Material Master

Records Updated?

You can manually update the information of the material master

records; however, there are some exceptions that can be updated
by the system only, for example, the administrative data that is
updated by the SAP R/3 system only.

111. What Data In Material Master Is Maintained At The

Client Level?

The general data, that is, the data applicable to the company as a
whole is stored at the client level.

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112. What Are The Data In Material Master That Are

Maintained At The Company Code Level?

The data that is specific to a particular company and the plant and
storage areas assigned to the company is maintained at the
company code level.

113. What Are The Plant-specific Data In Material?

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

114. What Is The Lot Size Attribute Of A Material?

The lot size attribute represents the reorder quantity for a

material. A material can have a periodic, optimum, or a static or
fixed lot size.

115. How Is Material Information Structured In

Material Master Records?

Material information is structured in material master records on

the basis of different criteria, such as material’s master detail
(such as name size dimension , and weight), that shows its
descriptive nature and material’s detail with a control function
(such as material type, price control and industry sector). Material
master records also store the information about the data that can
be automatically updated by the system. For example, the stock
level can be automatically updated by the system on the basis of
the material data update.

116. What Is A Batch?

A batch is a group of materials combined together quantity-wise

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

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117. Why Is Batch Record Important?

A batch represents a quantity of a particular material processed at

the same time with the same parameters. These materials,
produced under one batch, have the same characteristics and
values. However, these characteristics may vary from the
materials of another batch produced on the same day.
A batch record is important as having a batch record indicates
that it conforms to the current Good Manufacturing Procedures
(cGMP) and contains specifications of the product tested,
analytical methods, and test results.
118. How To Create A Batch?

You can create a batch record manually by using the transaction

code MSC1N. The navigation path of creating a batch is: SAP
Menu -> Logistics -> Materials Management -> Material Master
-> Batch -> Create.

119. How Can Batch Records Be Changed?

You can change a batch record by using the transaction code

MSC2N. The navigation path of changing the batch record is: SAP
Menu -> Logistics -> Materials Management -> Material Master
-> Batch -» Change.
You can change the batch record, but you should note that these
changes are also available for review.

120. How To Delete A Batch?

You can delete a batch by using the MSC2N transaction code.

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

121. What Is Batch Information Cockpit?

The Batch Information Cockpit (BIC) is the main switching point

having a wide range of options for scrutiny and control. It stores
all the information related to the analysis of a particular batch at a
single location.

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122. What Is A Serial Number?

A serial number is provided to an item to identify it and to store

information about it. A serial number is mostly used to refer to
equipments such as motors, drills, or vacuums. In MM, an item of
a material contains serial number as well as a material number.
This combination of the material number and serial number helps
to uniquely identify an item of a material.

123. State The Importance Of Classification Data.

The classification data allows you to search for the materials on

the basis of the characteristics values entered into the classes.
This feature is very important when the customer wants to search
for a particular vendor and batches.

124. What Are The Main Master Files Used In Mm?

The following are the main master files used in MM:

Material master file

Inventory master file
Vendor master file

125. Give Some Example Of Master Data In Material Management

(mm).

Material master, material master general data (MARA), tax

classification material (MLAN), info records, source list, and
vendor master are the examples of master data in MM.

126. What Is Vendor Master Data?

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.

127. What Are The Different Fields In A Vendor Master Data?

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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
128. How To Create A Vendor Number Range?

When you create a number range, it is important to remember

that vendor numbers, such as material numbers can be assigned
externally or internally. You can create vendor number ranges by
selecting the following navigation path:
IMG -> Financial Accounting -> Vendor Accounts -> Master Data
-> Preparations for Creating Vendor Master Data -» Create
Number Ranges for Vendor Accounts.
For configuring the vendor number range, you should enter a
unique number for the range which is a two character field and
then specify the limit for the number range. The current number
field is used to define the current number. The Ext. field defines
whether the number range is defined externally by the user.

129. What Is The Transaction Code To Access The Materials

Management Configuration Menu?

The OLMS transaction code is used to access the Materials

Management Configuration menu.

130. What Are Purchasing Information Records?

The purchasing information records, also known as info record,

contain information related to the material and vendor who is
supplying the material. It also contains details about the material,
such as the current price of the material.

131. What Are The Categories Of Purchasing Information Record?

The following are the categories of purchasing information

record:

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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.
132. What Are The Prerequisites Of Creating A Purchasing Info
Record?

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
133. How Can You Create A Purchasing Information Record?

You can create a purchasing information record either manually

or automatically by setting the Info update indicator when
maintaining a quotation, a purchase order, or an agreement.

134. Can Purchasing Info Record Be Created Without A Material

Number?

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:

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Material short text

Order unit
Material group
Short term key
135. How Is An Information Record Based On The Material
Master Created?

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.

136. What Is Document Management System In Sap?

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.

137. How Will You Create A Document?

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.

138. Name The Key Fields That You Must Specify While Creating
A Document.

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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
139. How Will You Link A Document To A Material Master
Record?

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.

140. How Will You Link A Document To A Vendor Master

Record?

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.

141. How Classification System Is Used To Describe A Document?

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.

142. What Is The Source Of Error “not Allowed” In Case Of

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Custom Movement Type Creation?

You need to check the allowed transaction for the customized

movement types and use the OMJJ transaction code.

143. Give The Names Of The Tables Where The Header Level And
Item Data Are Stored In A Purchase Order.

The EKKO and EKPO are the two tables where the header and
item level data are stored, respectively.

144. Give The Names Of The Tables Where The Material Master
Data Is Stored.

The MARA and MARC are the two tables where the master data is
stored.

145. What Is The Vendor Evaluation? How Is It Maintained?

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.

146. Write The Name Of The Sap Program Used To Updated Or

Create Material Master Records (mmr).

The RMDATIND program of SAP is used to update or create

Material Master Records (MMR).

147. What Is The Storage Location-specific Material Master Data?

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.

148. When Is A Production Resource Tool (prt) Defined For A

Material?

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If purchasing and inventory functions are carried out for

Production Resource Tool (PRT), then a PRT is defined for a
material.

149. What Transaction Code Is Used To Extend The Material

View?

The MM50 transaction code is used to extend the material view.

150. What Is Source List? What Is The Menu Path To Define A

Source List?

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.

151. What Do You Mean By Material Numbers In Sap?

Material numbers are unique numbers used to identify a material.

152. What Does An Industry Sector Control?

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.

153. Can We Change The Industry Sector Of An Existing Material?

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

existing material.

154. What Is Valuation Category?

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

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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.

155. What Does The Material Type Control?

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.
156. What Is The Transaction Code To Create A Material Type?

MOS2 is the transaction code to create a material type.

157. What Material Types Are Prompted While Creating A New

Material?

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.

158. What Is The Menu Path To Define Material Type Attributes?

The following is the menu path to define material type attributes:

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

159. Can We Change The Material Type Of A Material?

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

160. How Are User Defaults Set For Views?

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

161. List The Steps To Create A Profile.

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.

162. How Are The Characteristics Changed?

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.

163. How Is A Class Created?

A class is a collection of the group of the characteristics for a

particular object. You need to enter the class name and a
description for it and then select the group. After saving the
details, the class is created. Alternatively, you can use CL01
T-code for this purpose.

164. Can You Include An Roh (raw Material) Type In The Sales
View?

Usually, the raw materials cannot be included in the sales view.

However, the raw materials can be included in the sales view only
when they are sold to procure finished products in return.

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165. List The Key Fields Of The Material Master Table.

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.

166. What Are The Major Purchasing Tables? List The T Codes
For Them.

The major purchasing tables along with their T-codes are as

follows:

167. What Is Non-valuated Material?

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.

168. How Can You Access The Additional Data Screen?

You can access the additional data screen in a material master

record from any view by selecting additional data in the standard
material master.

169. How To Move A Material Master Record From One Sap

System To Another?

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)

170. What Is The Transaction Code To Display Material Of Sap

Mm?

MM03 is the transaction code to display material of SAP MM.

171. What Is The Purchasing Value Key?

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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
172. How Can You Configure The Purchasing Value Key?

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.

173. What Is Vendor Sub-range?

The vendor sub-range is defined as a subdivision of the total range

of products provided by a vendor. Vendor sub-ranges are required
when you create or maintain Material Master data.

174. What Is A One-time Vendor?

A one-time vendor is the vendor who rarely or only once supplies

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

175. Why Is Negative Stock Needed In An Organization?

Negative stock is needed in an organization when a material is

shipped to a customer and the production is not confirmed or

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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.

176. How Are The Consignment Stocks Created?

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.

177. Define The Consignment Cycle?

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.

178. How Is Consignment Material Procured?

The consignment material is procured through purchase

requisitions, purchase orders, and outline agreements.

179. How Can We Take Consignment Stocks Into Our Own Stock?

You can take consignment stocks from the vendor into your own
stock by performing the following steps:
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

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materials in another storage location.

7. Post the document. This makes the vendor liable to change the
storage location of the materials.

180. How Can You Do Invoicing In Case Of Consignment Stocks?

You can do the invoicing of consignment stocks by performing

either of the following:

Invoicing with purchase order

Invoicing without purchase order
181. How Can We View The Stocks Provided To Vendor?

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.

182. How Are Components Consumed In Case Of Subcontracting?

In subcontracting, the end product is ordered by using a

subcontract order. The materials or components required by the
vendor to manufacture the end product are mentioned in the
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.

183. What Is The Need Of Creating Physical Inventory Documents

For An Inventory Cycle-count Procedure Of A Material Or
Materials?

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For a cycle-count procedure, the physical inventory documents

are needed, because these are used to record inventory levels of
the materials.

184. What Is The Difference Between Planned And Unplanned

Consumption?

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.

185. How Can One Vendor Obtain Components From Another

Vendor Or Third-party?

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.

186. How Is Invoice Verification Of Subcontracting Po Done?

The invoice verification of subcontracting PO is done in the same

way as it is done in purchase order.

187. How Do You Attach A Document In The Purchase Order?

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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.

188. How Can A Subcontract Order Be Created?

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.

189. What Do You Mean By The Lot Size?

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

190. What Do You Mean By A Reservation?

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.

191. What Transaction Codes Are Used With Reservations?

The following transaction codes are used with reservations:

The MB21 transaction code: Creates a reservation

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The MB22 transaction code: Changes a reservation

The MB23 transaction code: Displays a reservation
The MB25 transaction code: Displays lists of reservations
192. How Is The List Of All Reservations In The Systems
Displayed?

The reservation list can be displayed by running the RM07RESL

report.

193. State The Difference Between Stock Transfer And Transfer

Posting?

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.

194. What Is The Transaction Code To Create Movement Types?

OMJJ is the transaction code to create movement types.

195. How To Create Movement Type?

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.

196. How Is Stock Transferred In A Cross-company Scenario?

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

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STO without delivery through shipping

STO with delivery through shipping
197. How Can A Stock Transfer Be Monitored In Purchasing?

A stock transfer can be monitored in Purchasing by using the

following stock documents:

Purchase requisition
Stock transport order (STO)
Stock transport scheduling agreement
198. Can A Purchase Requisition Be Generated Automatically?

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.

199. State The Configuration Steps For Purchase Requisition?

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

200. How Do You Change A Purchase Requisition Once It Is

Issued?

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.

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201. State The Differences Between The Purchase Requisition

With A Master Record And Without A Master Record?

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.

202. State The Importance Of The Vendor Evaluation In The

Purchase Department?

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.

203. What Are The Main Criterias Of Vendor Evaluation?

The main criterias of vendor evaluation are as follows:

Price Quality
Delivery
Service and Support
External Service
204. What Are The Document Types Used In Prs?

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.

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3. Purchase Order.

205. What Is The Difference Between An Indirectly Created And

Directly Created Purchase Requisition?

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.

206. Can A Purchase Requisition Be Manually Generated Through

The Reference Of A Purchase Order Or A Scheduling Agreement?

A purchase requisition cannot be generated either by using the

reference of a purchase order or by using a scheduling agreement.

207. What Is A Purchase Order? What Does A Purchase Order

Contain?

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.
208. Where Do We Define Payment Terms In Po?

The payment terms in PO represent the agreements of customers

and vendors. You can define the payment terms in PO in the
master records of customers and vendors.

209. What Are The Document Types Used In Po?

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The document types used in PO are:

Standard Purchase Order (NB)

Stock Transport Order (TB)
Framework Order
210. What Is The Difference Between Blanket Purchase Order And
The Service Order?

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.

211. What Is Price Comparison?

Price comparison is used to compare quotations from different

vendors. You can use transaction code ME49 to perform a price
comparison between different vendors.

212. What Are The Document Types Used In Sa?

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
213. What Are The Document Types Used In Contract?

The document types used in Contract are:

MK
WK
214. What Is A Contract?

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

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required.

215. What Are The Different Types Of Contracts?

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.
216. What Is The Difference Between A Scheduling Agreement
And A Contract?

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.

217. What Is The Difference Between Release Procedure In

Internal Documents And External Documents?

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.

218. What Are The Main Documents Used In Mm?

The following are the main documents used in MM:

Purchase requisitions
Purchase orders
Goods transfers
Goods receipts
Goods issues

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219. What Are The Various Steps Of The Mm Cycle?

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
220. What Is The Definition Of Procurement?

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.

221. What Is An Account Assignment Category In A Po

Document?

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.

222. What Is The Difference Between A Purchase Order And

Purchase Requisition?

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.

223. What Is The Creation Indicator?

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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.

224. Define Automatic Generation Of Purchase Orders From

Purchase Requisitions.

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.

225. What Is Quotation?

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.

226. What Is Request For Quotation (rfq)?

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

227. How Rfqs And Quotations Are Processed In Sap?

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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).

228. What Are The Ways A Rfq Can Be Created?

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.

229. What Are The Rfq Types?

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.

230. List The Important Key Fields For Rfq?

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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
231. What Is Rfq Delivery Schedule?

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.

232. How Will You Release A Rfq?

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.

233. How Can The List Of Vendors Be Found To Send A Request

For Quotation (rfq)?

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.

234. What Is The Purchasing Document Category For Rfq?

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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.

235. What Is The Role Of The Confirmation Control Key?

The confirmation control key is used to specify whether or not a

notification for shipping is expected PO item.

236. What Is Purchasing Document?

A purchasing document is a document type used by the

purchasing department to procure materials or services.

237. Name Some Of The Data Points Provided By Purchasing For

The Materials.

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.

238. How Does The Sap System Differentiate Between Purchasing

Documents?

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.

239. How Are Purchasing Documents Numbered?

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

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document must supply manually. Alphanumeric assignment of

numbers is only possible in the latter case.

240. Can A Line Item In A Purchase Order Be Blocked After It

Has Been Created?

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.

241. What Are The Account Assignment Categories In A Purchase

Order?

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

242. Can Multiple Accounts Be Assigned To A Purchase Order

Line?

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.

243. What Are The Different Types Of An Item Category?

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
244. What Is Service Procurement?

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Service procurement consists of activities, such as bidding,

contract management and operational procurement processes
from requisition to payment.

245. What Is The Difference Between Procurement For Stock And

Procurement For Consumption?

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.

246. What Is The Difference Between External Procurement And

Internal Procurement?

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.

247. What Is A Document Type?

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.

248. What Are The Ways Of Converting Planned Orders Into

Purchase Requisitions?

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You can convert the Planned Orders into Purchase Requisitions

either by converting them individually or by collectively
converting all the planned orders.

249. What Transaction Code Is Used To Convert Planned Orders

(po) Into Requisitions In Material Requirement Planning (mrp)?

The OPPR transaction code is used to convert Planned Orders

(PO) into requisitions in Material Requirement Planning (MRP).

250. Can You Add Custom Fields To Purchase Order(s) And

Request For Quotation (s)?

Yes, you can add custom fields to a Purchase Order and Request
for Quotation.

251. How Is Framework Order Different From Standard Po?

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).

252. What Document Type Can Be Used In Case Of Service

Procurement?

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.

253. What Do You Mean By Using Multiple Account Assignment

In A Po?

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.

254. How Is The Sto Different From The Standard Po?

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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.

255. How Can We Return A Material That We Have Received

With Reference To A Po?

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.

256. How Are Free Items Managed In A Po?

Mark the item as FREE in the Purchase order. The price for such
PO items will be zero.

257. Which Documents Are Used As References When We Create

Po?

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.

258. What Is The Transaction Code To Set Price Control For

Receipts (goods/invoice)?

The transaction code OMW1 is used to set price control for

receipts (goods/invoice).

259. What Is The Difference Between Quantity And Value

Contracts?

Quantity Contracts— When the total quantity to be ordered is

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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.

260. What Is A Centrally Agreed Contract?

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.

261. List The Important Fields Of A Service Master Record?

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

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related with the service

262. What Is A Standard Service Catalog (ssc)?

A Standard Service Catalog (SSC) is a general standardized

catalog that contains the detailed explanation of services. The
descriptions of these services are stored as master records and
help to remove data duplication.

263. How Can Services Be Purchased?

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.

264. What Is A Service Entry Sheet?

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.

265. What Is A Blanket Purchase Order? How Can It Be Created?

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.

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266. In What Cases Item Category M (material Unknown) And

Item Category W (material Group) Can Be Used In Contract?

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.

267. How Can We Create An Sa In Sap?

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.

268. What Are Schedule Lines?

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.

269. What Is Tax Code?

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.

270. What Is Material Requirement Planning (mrp) In Sap?

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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.

271. List The Types Of Mrp?

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.
272. What Is A Mrp List?

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.

273. What Is The Difference Between Material Requirement

Planning (mrp) And Consumption- Based Planning?

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

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materials.

274. What Important Values Are Used To Define The Reorder

Point?

The following important values are used to define the reorder

point:

Safety stock
Replenishment lead time
Average consumption
275. What Is A Procurement Proposal? What Are The Types Of
Procurement Proposal?

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.
276. How Is The Automatic Purchase Order Generated After
Creation Of Pr By Using A Particular Material?

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.

277. What Is Forecasting In Sap System?

Forecasting is a future prediction which is an uncertain process.

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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.

278. Can Forecast Model Be Selected Automatically?

The forecast model can be selected automatically by entering the

value J in the Forecast Model field in the Material Master record
where the value J is used for Automatic Model Selection.

279. What Do You Mean By Forecast-based Planning?

Forecast-based planning is a process used in consumption-based

planning which depends on predictions of future requirements
calculated on the basis of forecast.

280. What Are The Different Types Of Forecast Model?

The following are the different types of forecast model:

Constant
Trend
Seasonal
Seasonal trend
281. Define Time-phased Planning.

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.

282. Define The Planning Process Flow.

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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.

283. What Is The Condition To Create The Planned Orders?

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.

284. What Is The Transaction Code To Convert Planned Order

Into Purchase Requisition (pr)?

MD14 is the transaction code to convert planned order into PR.

285. What Is Total Planning?

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

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the following areas:

Several plant areas

One MRP area
Several MRP areas
A combination of plants and MRP areas
286. Define Planning Time Fence.

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.

287. Give An Overview Of Inventory Management In Sap System?

Inventory management in SAP system helps in recording and

tracking of stocks of materials. It also involves planning and
documentation of all goods movements.

288. What Tasks Are Covered Under Inventory Management?

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
289. What Is Physical Inventory?

Physical inventory is a process in which all the transactions

related to the movement of goods are stopped and the company

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physically counts inventory. It is required in financial accounting

rules or for regulating taxes by placing an accurate value on the
inventory.

290. What Are The Initial Configuration Steps For Physical

Inventory?

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
291. With Which Modules In Sap Is The Inventory Management
Integrated?

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.

292. How Is The Inventory Management Integrated With Mm?

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.

293. What Are The Initial Configuration Steps For Inventory

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Management?

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
294. What Is Goods Movement? What Type Of Documents Is
Created After Goods Movement?

Goods movement refers to the movement of stock. This

movement of stock could be either inbound from the vendor,
outbound to a customer, between different plants, or even
between different stocks within a plant. After goods movement,
the SAP system creates two types of documents: material
document and accounting document.

295. Why Is Goods Receipt Important To A Company?

Goods receipt indicates a receipt or inward movement of stock of

materials or goods. When an external vendor provides stock to the
company, the goods receipt is generated as a purchase order and
when the material is produced in-house, the goods receipt is
generated as a production order. A goods receipt is important to a
company as using a goods receipt moves material into stock,
updates the stock levels, and thereby indirectly enables the
production process.

296. How Do You Post The Goods If The Po Number Is Not

Known?

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.

297. How Can A Goods Receipt Be Posted When Purchase Order

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Number Is Unknown?

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.

298. How Do We Receive Goods From Production?

The goods from the production can be posted either to the

warehouse or consumption. They are posted with the same
movement type.

299. How Can The Logical Value For The Stock Items Be Found?

You need to use the MC49 transaction code to find the logical
value of the stock items by date.

300. What Are The Ways Of Receiving Goods?

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
301. What Is Movement Type?

While implementing the goods movement in an organization, the

movement type is required to be entered. It is a three-digit

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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
302. What Does A Movement Type Control?

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
303. List The Movement Types For Unplanned Goods Received?

The following are the movement types used for unplanned goods
received:

501
561
531
304. How Will An Item Be Returned To A Vendor?

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.

305. What Is Goods Issue Reversal?

The process of issuing the material back to the stock of material is

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

306. Name The Documents That Are Created When A Goods

Issue Is Posted?

The following documents are created when a goods issue is

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posted:

Material document
Accounting document
Goods issue slip
Stock changes
General ledger account changes
307. What Are The Different Ways Of Stock Transfer?

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
308. What Is Transfer Posting?

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.

309. How Is Stock Transfer From One Storage Location To

Another Done?

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.

310. How Is Stock Transfer From One Plant To Another Plant

Done?

The transfer of the stock from one plant to another is a bigger

activity as compared to transfers done under the same plant. The

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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.

311. How Is The Stock Transferred From Company Code To

Company Code?

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.

312. What Is A Stock Posting?

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.

313. What Do You Mean By Physical Inventory?

Physical inventory is the recording of actual stock levels

(quantities) of materials by counting, weighing, or measuring at a
given storage location at a specific time.

314. How Is The Value Of The Cross-company-code Stock

Displayed?

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

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Select Environment-> Stock-> Stock in transit.

315. What Is Returnable Transport Packaging (rtp)?

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.

316. What Is Sales Order Stock?

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.
317. What Is Project Stock?

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.

318. What Is Invoice Verification?

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.

319. What Are The Different Types Of Invoice Verification?

The different types of invoice verification are as follows:

Invoices based on purchase orders

Invoices based on goods receipts
Invoices without an order reference

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320. Name The T Code For Invoice Verification?

An invoice is verified by using the OLMR T code.

321. How Do You Perform Invoice Verification?

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.

322. Define Ers?

ERS stands for Evaluated Receipts Settlement. It refers to the

process of settling down receipts of the goods in an automatic
manner. In this process, an agreement is made between the
vendor and the user that vendors do not prepare any invoice for
the goods ordered. Rather, the system would automatically
generate and post the invoice document on the basis of purchase
order and receipts of goods. 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.

323. With Reference To Which Documents Can Invoice

Verification Be Done?

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

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Vendor master record that comprises bank information

324. What Are The Benefits Of Document Parking?

The benefit of document parking is that you can modify the

invoice in a parked status whereas the invoice that is placed on
hold cannot be modified.

325. How Do You Display The Parked Document?

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.

326. What Is Stochastic Block?

Stochastic Blocking is the process of checking the incoming

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

327. What Are The Different Accounts Used In

Invoicing?

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

328. What Are The Different Types Of Variances In

Invoices? Describe Them.

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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.

329. Why Does The Invoices Get Blocked?

Invoices can be blocked due to the following reasons:

Variance in the invoice item

Amount of an invoice item
Stochastic block
Manual block

330. What Happens When An Invoice Is Blocked? What

Are The Different Ways To Block An Invoice?

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

331. How Can We Post An Invoice Directly Without Any

Reference?

In case of invoices posting without a reference, proposed values

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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.

332. What Is The Menu Path To Create A Document/e-

mail Notification For Your Supplier?

The following is the menu path to create a document/e-mail

notification for your supplier:
Select Material Management-> Logistics Invoice Verification ->
Message Determination.

333. What Is The Difference Between Gr-based Iv And

Po-based Iv?

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.

334. How Do You Create The Vendor Account Group?

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.

335. What Is The Purpose Of Material Valuation?

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Material valuation in SAP MM module is necessary to determine

the stock value of materials.

336. How To Determine Stock Value?

The stock value of the materials is calculated using the following

formula:
Stock value = Stock quantity * Material price.

337. How Material Valuation Is Associated With

Financial Accounting?

Material valuation in MM module is associated with Financial

Accounting as any change in the stock value also updates the G/L
account in Financial Accounting.

338. What Are The Factors Controlling Material

Valuation?

The factors that control material valuation are:

1. System settings
2. Material master record

339. What Is Valuation Area?

Valuation area is the organizational level at which the material

valuation is carried out.

340. Define Valuation Class?

Valuation class is a group of different materials that share some

common properties. This group is defined so that you do not have
to manage a separate account for each material.

341. What Is The Significance Of Account Assignment

Category?

Account assignment category determines the account assignment

details that are required for the purchase order item, such as cost

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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

342. What Are The Different Types Of Account

Assignment Categories?

The different types of account assignment categories are:

1. Single account assignment: Specifies one account

assignment for an item in the purchase order
2. Multiple account assignment: Allocates the costs associated
with the purchase order item

343. What Is Lifo Valuation?

LIFO is a balance sheet valuation technique. It stands for last in-

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

344. What Is The Release Procedure?

The release procedure allows you to create condition records for

the planning process. It is used to creating Purchase Requisitions
(PR), Purchase Orders (PO), Request for Quotation (RFQ),
Outline Agreements, and Service Entry Sheets.

345. What Is Release Strategy? How Many Release

Points Can Be Involved In A Release Process?

The release strategy specifies the release codes with which a

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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.

346. Can You Release The Po Item By Item When You

Have A Multiline-item Po?

No, you cannot release the PO item by item. PO can be released at

the header level by using the with classification release procedure.

347. How Are The Release Procedures For Pr And Po

Defined?

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

348. How To Release Blocked Purchase Documents?

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.

349. How To Reject Approvals In Sap-r/3? Will It Affect

The Sap Business Workflow?

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.

350. How Many Procedures Are Available To Release

Purchase Requisition?

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.

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Without classification: In this procedure, you can

release the purchase requisition only at item level.

351. How To Release Purchase Order? Which

Transaction Code Is Used To Display As Well As Reset
The Release Of Po?

You can release a purchase order at header level. You cannot

release a single item in purchase order. You need to release all the
items at a time. The ME29N transaction code is used to display as
well as reset the release of purchase order.

352. How Many Types Of Release Procedure Are

Available For Po?

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.

353. What Is A Release Criterion?

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

354. What Is Release Code?

The release code is a two-character field or ID that represents the

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person responsible for the approval of the release procedure.

355. What Do You Mean By Release Group?

Release group is a two-digit code that is assigned with a class and

contains one or more release strategies. For example, release
group 01 is defined for purchase requisitions and release group 02
is defined for purchase order.

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