SAP MM Questions

and Answers
1. What is SAP MM?
• SAP MM stands for Material Management. It is a module of SAP ERP that deals with procurement,
inventory management, and material valuation.

2. Explain the procurement process in SAP MM.

• The procurement process involves creating purchase requisitions, converting them into purchase
orders, goods receipt, invoice verification, and payment processing.

3. What is a purchase requisition?

• A purchase requisition is a document used to request goods or services. It initiates the
procurement process in SAP MM.

4. What is a purchase order?

• A purchase order is a formal request to a vendor to supply goods or services at specified
conditions.

5. Explain the difference between a purchase order and a purchase requisition.

• A purchase requisition is a request for goods or services, while a purchase order is a formal
document that authorizes the purchase.

6. What is a goods receipt?

• A goods receipt is the process of recording that goods have been received from a vendor. It
updates the inventory.

7. What is invoice verification?

• Invoice verification is the process of verifying that the vendor's invoice matches the goods receipt
and the purchase order.

8. Explain the concept of release strategy in SAP MM.

• Release strategy is a set of rules that determine the approval process for purchase requisitions or
purchase orders based on predefined criteria.

[email protected] || www.ambikeya.com || +917746805189

9. What is a material master in SAP MM?
• The material master is a central repository of information about materials such as raw materials,
semi-finished goods, and finished goods.

10. What is a valuation class in SAP MM?

• A valuation class in SAP MM is a grouping of materials with similar valuation characteristics.

11. Explain the difference between goods issue and goods receipt.
• Goods issue is the process of removing goods from inventory, while goods receipt is the process
of adding goods to inventory.

12. What is a movement type in SAP MM?

• A movement type is a three-digit code that represents a specific business transaction, such as
goods issue or goods receipt.

13. What is the purpose of a purchase info record?

• A purchase info record contains information about a material and a vendor, including prices and
conditions for procurement.

14. Explain consignment stock in SAP MM.

• Consignment stock is when a vendor maintains inventory at the buyer's location, and the buyer
only pays for the goods when they are used.

15. What is the difference between a source list and a quota arrangement?
• A source list is a list of preferred vendors for a material, while a quota arrangement specifies the
percentage of total procurement assigned to different vendors.

16. What is the purpose of a GR/IR account?

• The Goods Receipt/Invoice Receipt (GR/IR) account is used to manage the temporary difference
between goods receipt and invoice receipt.

[email protected] || www.ambikeya.com || +917746805189

17. Explain the concept of split valuation in SAP MM.
• Split valuation allows you to manage different valuation types for the same material based on
specific criteria, such as location or batch.

18. What is a purchase order history in SAP MM?

• Purchase order history provides a record of all transactions related to a purchase order, such as
goods receipts and invoice verifications.

19. What is the difference between a standard purchase order and a blanket purchase order?
• A standard purchase order is for one-time procurement, while a blanket purchase order is for
recurring purchases over a specified period.

20. Explain the purpose of the condition technique in SAP MM.

• The condition technique is used to determine prices and conditions in SAP MM based on various
factors such as quantity, vendor, or material.

21. What is a consignment purchase order in SAP MM?

• A consignment purchase order is used to procure goods that are placed on consignment at the
buyer's location until they are consumed.

22. Explain the difference between a stock transfer order and a stock transport order.
• A stock transfer order is used for intracompany transfers, while a stock transport order is used
for intercompany transfers between different plants.

23. What is the purpose of the procurement type in a material master?

• The procurement type in a material master determines how a material is procured, whether
through in-house production, external procurement, or a combination.

24. What is the purpose of the ABC analysis in SAP MM?

• ABC analysis classifies materials into categories (A, B, or C) based on their importance in terms of
value, allowing for better inventory management.

[email protected] || www.ambikeya.com || +917746805189

25. Explain the concept of subcontracting in SAP MM.
• Subcontracting involves sending components to a vendor for assembly or processing, and the
vendor returns the finished product.

26. What is the purpose of the reservation in SAP MM?

• A reservation is a request to set aside a certain quantity of a material for a specific purpose, such
as production or maintenance.

27. How is the release strategy determined in a purchase requisition?

• The release strategy in a purchase requisition is determined based on various criteria, such as the
total value, document type, or the person requesting the purchase.

28. Explain the concept of tolerance groups in SAP MM.

• Tolerance groups define the acceptable variations in quantities and values for goods receipts and
invoices.

29. What is the purpose of the condition record in SAP MM?

• A condition record contains information about pricing conditions for a specific combination of
material, vendor, and purchasing organization.

30. Explain the difference between a planned order and a purchase requisition.
• A planned order is generated from the MRP (Material Requirements Planning) process, indicating
a future material requirement, while a purchase requisition is a specific request to procure goods
or services.

31. What is the purpose of the batch management in SAP MM?

• Batch management allows you to manage and trace batches of materials, especially important in
industries where traceability is crucial, such as pharmaceuticals.

[email protected] || www.ambikeya.com || +917746805189

32. What is the purpose of the ABC indicator in the material master?
• The ABC indicator in the material master is used to classify materials based on their consumption
value for ABC analysis.

33. Explain the difference between a physical inventory and a cycle count.
• Physical inventory is a complete count of all materials in stock, while cycle counting involves
counting a subset of materials on a regular basis.

34. What is the purpose of the source determination in SAP MM?

• Source determination determines the vendor from whom a material can be procured based on
predefined criteria such as source list or quota arrangement.

35. What is the purpose of the movement type 101 in SAP MM?
• Movement type 101 is used for goods receipt into unrestricted stock. It increases the stock level
in the warehouse.

36. Explain the concept of tolerance keys in SAP MM.

• Tolerance keys are used to define acceptable variations in quantities and values for goods
receipts and invoices based on different parameters.

37. What is the purpose of the purchase order document type in SAP MM?
• The purchase order document type determines the format and control parameters for a specific
type of purchase order.

38. Explain the purpose of the release code in SAP MM.

• A release code is assigned to individuals or positions who have the authority to release a
purchase requisition or purchase order within a release strategy.

39. What is the purpose of the vendor evaluation in SAP MM?

• Vendor evaluation is used to assess and rate vendors based on their performance in terms of
delivery, quality, and other relevant factors.

[email protected] || www.ambikeya.com || +917746805189

40. Explain the difference between a reservation and a transfer order.
• A reservation is a request to set aside materials for a specific purpose, while a transfer order is
used to move materials between storage locations or plants.

41. What is the purpose of the source determination in SAP MM?

• Source determination determines the vendor from whom a material can be procured based on
predefined criteria such as source list or quota arrangement.

42. What is the purpose of the material group in SAP MM?

• The material group is used to classify materials based on common characteristics, facilitating
easier management and analysis.

43. Explain the purpose of the condition type in SAP MM.

• A condition type in SAP MM represents a specific condition in pricing, such as discounts, freight
charges, or taxes.

44. What is the purpose of the outline agreement in SAP MM?

• Outline agreements are long-term agreements with vendors for the supply of goods or services,
providing a framework for procurement.

45. Explain the concept of material ledger in SAP MM.

• The material ledger in SAP MM is used for material valuation and provides a detailed view of the
value of materials in different currencies.

46. What is the purpose of the procurement type in SAP MM?

• The procurement type in a material master determines how a material is procured, whether
through in-house production, external procurement, or a combination.

47. Explain the purpose of the purchasing organization in SAP MM.

• The purchasing organization is an organizational unit responsible for procuring materials or
services for one or more plants.

[email protected] || www.ambikeya.com || +917746805189

48. What is the purpose of the special procurement key in SAP MM?
• The special procurement key in SAP MM determines how materials are procured in special cases,
such as subcontracting or consignment.

49. Explain the purpose of the document type in SAP MM.

• The document type in SAP MM determines the characteristics and control parameters of a
document, such as purchase requisition or purchase order.

50. What is the purpose of the stock type in SAP MM?

• The stock type in SAP MM classifies materials based on their purpose, such as unrestricted stock,
quality inspection stock, or blocked stock.

51. What is the purpose of the account assignment category in SAP MM?
• The account assignment category is used to determine how financial transactions related to a
purchase order are recorded in the accounting system, such as cost center or asset.

52. Explain the concept of the purchase requisition release strategy in SAP MM.
• The purchase requisition release strategy in SAP MM involves defining rules and conditions for
the approval process of purchase requisitions based on specific criteria like the total value,
material group, or plant.

53. What is the purpose of the quota arrangement in SAP MM?

• Quota arrangement is used to define the percentage distribution of material procurement among
multiple vendors, ensuring a balanced allocation of orders.

54. Explain the concept of material type in SAP MM.

• Material type is a classification that defines the attributes and behaviors of a material, such as
whether it is a finished product, raw material, or trading good.

[email protected] || www.ambikeya.com || +917746805189

55. What is the purpose of the purchase order item category in SAP MM?
• The purchase order item category determines the type of procurement for a specific item, such as
standard, subcontracting, or consignment.

56. Explain the purpose of the purchasing group in SAP MM.

• The purchasing group is a grouping of buyers responsible for the procurement of materials or
services. It helps in organizing and streamlining the purchasing process.

57. What is the purpose of the movement type 601 in SAP MM?
• Movement type 601 is used for transferring materials between plant storage locations. It involves
a plant-to-plant stock transfer.

58. Explain the purpose of the storage location in SAP MM.

• A storage location is a place within a plant where materials are stored. It helps in managing and
tracking inventory efficiently.

59. What is the purpose of the condition exclusion group in SAP MM?
• The condition exclusion group allows you to exclude certain conditions from the pricing
procedure during the determination of prices and conditions.

60. Explain the purpose of the MRP controller in SAP MM.

• The MRP (Material Requirements Planning) controller is responsible for planning and managing
the material requirements for production. It is assigned to a plant.

61. What is the purpose of the purchasing information record in SAP MM?
• The purchasing information record contains information about a specific material and vendor,
including prices, delivery conditions, and vendor-specific data.

62. Explain the purpose of the GR non-valuated indicator in SAP MM.

• The GR non-valuated indicator is used when goods receipt should not have a financial impact on
the inventory valuation. It is often used for goods receipt in the production process.

[email protected] || www.ambikeya.com || +917746805189

63. What is the purpose of the source determination in SAP MM?
• Source determination helps in determining the best source or vendor for procurement based on
conditions, source list, and quota arrangement.

64. Explain the purpose of the automatic purchase order creation in SAP MM.
• Automatic purchase order creation is a process that automatically generates purchase orders
based on predefined criteria, such as reorder point or MRP.

65. What is the purpose of the procurement cycle in SAP MM?

• The procurement cycle in SAP MM involves the steps from identifying the need for materials to
their procurement, receipt, and payment. It ensures a systematic approach to material
management.

66. Explain the purpose of the blanket release order in SAP MM.
• A blanket release order is used to release a portion of a blanket purchase order for specific
quantities and periods, providing flexibility in procurement.

67. What is the purpose of the purchasing document category in SAP MM?
• The purchasing document category determines the type of purchasing document, such as
purchase requisition, purchase order, or scheduling agreement.

68. Explain the purpose of the source list in SAP MM.

• The source list is a list of approved vendors for a specific material. It helps in ensuring that
procurement is done from authorized and preferred suppliers.

69. What is the purpose of the GR blocked stock in SAP MM?

• The GR blocked stock is a stock category where goods have been received but are not yet
available for use due to inspection or other quality-related checks.

[email protected] || www.ambikeya.com || +917746805189

70. Explain the purpose of the account determination in SAP MM.
• Account determination in SAP MM involves defining which general ledger accounts are updated
when specific transactions occur, such as goods receipt or invoice verification.

71. What is the purpose of the purchase requisition item category in SAP MM?
• The purchase requisition item category determines the characteristics and attributes of a specific
item in a purchase requisition, such as whether it's a material or a service.

72. Explain the purpose of the document type in SAP MM.

• The document type in SAP MM determines the properties and control parameters of a document,
such as purchase requisition or purchase order.

73. What is the purpose of the stock type in SAP MM?

• The stock type in SAP MM classifies materials based on their usage or purpose, such as
unrestricted stock, quality inspection stock, or blocked stock.

74. Explain the purpose of the RFQ (Request for Quotation) in SAP MM.
• RFQ is used to request price quotations from vendors for specific goods or services. It helps in
obtaining competitive prices before creating a purchase order.

75. What is the purpose of the vendor master record in SAP MM?
• The vendor master record contains information about a specific vendor, including contact details,
payment terms, and other relevant data for procurement.

76. Explain the purpose of the release status in SAP MM.

• The release status in SAP MM indicates the approval status of a document, such as a purchase
requisition or purchase order, within the release strategy.

77. What is the purpose of the source list in SAP MM?

• The source list is a list of approved vendors for a specific material, ensuring that procurement is
done from authorized and preferred suppliers.

[email protected] || www.ambikeya.com || +917746805189

78. Explain the purpose of the purchase order type in SAP MM.
• The purchase order type in SAP MM determines the characteristics and control parameters of a
purchase order, such as standard purchase order, framework order, or subcontracting order.

79. What is the purpose of the release procedure in SAP MM?

• The release procedure is a workflow in SAP MM that determines the approval process for
documents like purchase requisitions or purchase orders based on specific criteria and release
strategy.

80. Explain the purpose of the document currency in SAP MM.

• The document currency in SAP MM is the currency in which a document, such as a purchase
order or invoice, is denominated. It helps in international transactions and reporting.

81. What is the purpose of the material document in SAP MM?

• The material document in SAP MM is a record of all goods movements within the system,
providing information about the flow of materials in and out of inventory.

82. Explain the purpose of the document date in SAP MM.

• The document date in SAP MM is the date on which a document, such as a purchase order or
goods receipt, is created. It helps in tracking the chronological order of transactions.

83. What is the purpose of the material group in SAP MM?

• The material group in SAP MM is a classification that groups materials with similar
characteristics, facilitating better management and analysis.

84. Explain the purpose of the Info Update indicator in SAP MM.
• The Info Update indicator in SAP MM determines whether the condition records created during
purchasing info record maintenance are updated in the information structure.

[email protected] || www.ambikeya.com || +917746805189

85. What is the purpose of the purchasing info record in SAP MM?
• The purchasing info record contains information about a material and vendor, including prices,
conditions, and other procurement-related details.

86. Explain the purpose of the GR (Goods Receipt) indicator in SAP MM.
• The GR indicator in SAP MM determines whether a material document is created for goods
receipt when a purchase order is created. It is used for services or non-stock items.

87. What is the purpose of the purchasing organization in SAP MM?

• The purchasing organization in SAP MM is an organizational unit responsible for procuring
materials or services on behalf of one or more plants.

88. Explain the purpose of the MRP group in SAP MM.

• The MRP (Material Requirements Planning) group in SAP MM is a key that determines the
planning parameters for a material, such as planning time fence and reorder point.

89. What is the purpose of the tolerance group in SAP MM?

• Tolerance groups in SAP MM define the acceptable variations in quantities and values for goods
receipts and invoices, ensuring flexibility in procurement processes.

90. Explain the purpose of the valuation area in SAP MM.

• The valuation area in SAP MM is an organizational unit that represents the scope of inventory
valuation. It can be at the plant level or company code level.

91. What is the purpose of the document type in SAP MM?

• The document type in SAP MM determines the attributes and control parameters of a document,
such as purchase requisition or purchase order.

92. Explain the purpose of the account group in SAP MM.

• The account group in SAP MM determines the grouping of master data fields in the vendor or
material master records, influencing data entry and display.

[email protected] || www.ambikeya.com || +917746805189

93. What is the purpose of the condition technique in SAP MM?
• The condition technique in SAP MM is used to determine prices and conditions for procurement
based on various factors such as quantity, vendor, or material.

94. Explain the purpose of the release strategy in SAP MM.

• The release strategy in SAP MM defines the approval process for documents like purchase
requisitions or purchase orders based on predefined criteria and release codes.

95. What is the purpose of the source determination in SAP MM?

• Source determination in SAP MM helps in identifying the best source or vendor for procurement
based on conditions, source list, and quota arrangement.

96. Explain the purpose of the document type in SAP MM.

• The document type in SAP MM determines the characteristics and control parameters of a
document, such as purchase requisition or purchase order.

97. What is the purpose of the reservation in SAP MM?

• A reservation in SAP MM is a request to set aside a specific quantity of a material for a particular
purpose, such as production or maintenance.

98. Explain the purpose of the payment terms in SAP MM.

• Payment terms in SAP MM determine the terms and conditions under which payment is made to
a vendor, specifying the due date and any discounts offered.

99. What is the purpose of the material ledger in SAP MM?

• The material ledger in SAP MM is used for material valuation, providing a detailed view of the
value of materials in different currencies.

100. Explain the purpose of the stock type in SAP MM.

• The stock type in SAP MM classifies materials based on their purpose or usage, such as
unrestricted stock, quality inspection stock, or blocked stock.

[email protected] || www.ambikeya.com || +917746805189

[email protected] || www.ambikeya.com || +917746805189