Materials management Interview Questions & Answers

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Materials management Interview Questions & Answers

Material management is a method for preparation, establishing, and governing all those actions primarily concerned with the flow of materials into an organization. Looking for the job change in the Material Management field? Are you searching for the interview question and answers in material management then we are here to help you all you want to do is to login into the Wisdomjobs material management site page. We have provided you with the various roles that you can apply and also Material management Interview Question and Answers. If you are familiar with the material management concepts then there are many leading companies that offer job roles like Materials Clerk, Supply Chain- Inventory Control, Warehouse In charge Material Manager Store Lead, DM / Manager - Supply Chain Management, Logistics Managers and there are many other several roles too. For more details on Material management jobs visit our site.

Materials Management Interview Questions

Materials management Interview Questions
    1. Question 1. What Is An Order Quantity?

      Answer :

      An order quantity is the amount of goods that an order requests be shipped to the store.

    2. Question 2. Explain What Should Be Recorded In A Physical Count Of Inventory?

      Answer :

      When conducting a physical inventory the classification, location and number in stock of a good should be recorded.

    3. Question 3. Tell Me Can Forecasting Help In Controlling Inventory?

      Answer :

      Yes, through the use of forecasts inventory levels can be set to meet the demands while keeping levels as low as possible.

    4. Question 4. What Are Important Steps In Procurement Life Cycle?

      Answer :

      Procurement Process starts with gathering requirements, then creating a purchase requisition and then we create a formal document that has to be sent to vendor i.e. purchase order. After this goods will be supplied by vendor and goods receipt is done along with invoice verification. Then vendor is paid for supplied goods and services.

    5. Question 5. What Is Lead Time?

      Answer :

      Lead time is the period of time from which a order for goods is placed until it is received by the store. Lead time is an important consideration for determining when orders should be placed.

    6. Question 6. What Is Demand?

      Answer :

      Demand is the quantity that customers are willing to buy. Demand can be found through forecasting and is needed to find the EOQ level.

    7. Question 7. What Types Of Forecasting Can I Do?

      Answer :

      There are two types of forecasting qualitative and quantitative. Qualitative uses personal opinions to determine forecasts. Quantitative uses numerical data and statistical modeling to determine forecasts.

    8. Question 8. What Is Forecasting?

      Answer :

      Forecasting is the process of estimating the future demand of a product.

    9. Question 9. What Are Batches And How Are They Searched?

      Answer :

      A batch is a collection of similar items from your stock that have the same characteristics. For example, all food items produced on a particular day belong to one batch.

      Batches are searched using the standard facility (match code, key F4) based on the batch names or other properties that distinguish them from others.

    10. Question 10. What Makes A Good Forecasting Model?

      Answer :

      A good forecast model will have reasonable costs. the accuracy of its forecasts will allow good decision making. The model will have ample data available for its use and a relevant time span. The model finally will have a low interference level.

    11. Question 11. What Are The Various Functions /features In Purchasing?

      Answer :

      The purchasing view consists of RFQ / Quotation, Purchase Requisition (PR), Purchase Order (PO), Master Data that has several fields like info record, source list, conditions, vendors etc. and finally Outline Agreements.

    12. Question 12. What Is A Rfq And How It Is Different From Quotation?

      Answer :

      RFQ is request for quotation and it is a form of invitation that is sent to vendors to submit quotation indicating pricing and their terms and conditions while quotation is a reply by a vendor in response to request for quotation.

    13. Question 13. When Should Reorders Be Placed?

      Answer :

      Times for reordering goods vary dependent on the control system you use and its lead time. In fixed order quantities reorders should be placed when the safety stock is reached. In fixed period systems the reordering is done at set time periods. In just in time systems reordering is based on matching the demand with supply. For just in time a close watch on inventory levels is needed so that reorders are placed before goods are out of stock.

    14. Question 14. What Are Transactions That Will Cause Change In Stock?

      Answer :

      Goods receipt and goods issue will cause change in stock as goods receipt will increase warehouse stock and goods issue will decrease warehouse stock.

    15. Question 15. If Inventory Controls Are Followed, What Can I Expect?

      Answer :

      By following your inventory policy you should be able to realize important advantages in inventory control. The first is reduced costs for inventories, along with reduced amounts of inventory. Theft and shrinkage should also be reduced if inventory policy is followed. The final benefit will be increased profits for the store.

    16. Question 16. What Is Material Type?

      Answer :

      Materials with some common attributes are grouped together and they are assigned to a material type. This will differentiate materials and allow organization to manage different materials in systematic manner in accordance to company's requirement.

    17. Question 17. What Are The Different Kinds Of Special Stocks Available?

      Answer :

      Special stocks available are consignment stocks (from vendor), subcontracting stocks (to sun-contractor), project stocks, pipeline materials, sales order stocks, stock transfer and third party.

    18. Question 18. Suppose If I Get A Discount Will It Effect The Eoq Model?

      Answer :

      Yes, a discount will cause the basic EOQ model to fail. To use a discount in determine a EOQ you must use the EOQ model with quantity discounts.

    19. Question 19. What Is Material And Vendor Data Available At All Organizational Levels?

      Answer :

      Yes, material and vendor data is available at all levels as it is normally created for company and it is valid for the levels below company.

    20. Question 20. Explain How Stock Is Being Transferred From One Plant To Another Plant?

      Answer :

      Stock within plants is transferred with the help of stock transport order. One plant order the goods internally from another plant(receiving plant/issuing plant) with the help of stock transport order.

    21. Question 21. What Is Release Procedure?

      Answer :

      Release procedure means approval of documents like purchase orders and purchase requisition manually by the criteria defined in the configuration.

    22. Question 22. What Is The Eoq Formula?

      Answer :

      The EOQ formula is the square root of 2 times demand times order completion cost divided by carrying cost. The mathematical formula is square root of 2DS/C.

    23. Question 23. When Should A Physical Inventory Be Taken?

      Answer :

      A inventory should be taken at least once a year. If items are perishable, seasonal or highly demanded a inventory should be taken more often.

    24. Question 24. What Do You Mean By Consignment Stock?

      Answer :

      In Consignment, material is available at our store premises, however it still belongs to the vendor(seller)/Owner of the material. If you utilize the material from consignment stocks, then you have to pay to the vendor.

    25. Question 25. Does The Model Always Work?

      Answer :

      No, the model only works for those cases that meet its assumptions.

    26. Question 26. How Do You Create A Pricing Procedure?

      Answer :

      The steps involved in creating a pricing procedure are:

      1. Create condition tables. 
      2. Create access sequence according to the various condition tables.
      3. Create condition types. 
      4. Assign access sequence to condition type.
      5. Create the pricing procedure. 
      6. List down all the condition types in order so as to suit the business and pricing requirements.

    27. Question 27. If You Have Multiple Line Items In Purchase Order, Can You Release Line By Line That Purchase Order?

      Answer :

      No, release is done only at header level in a combined way for all line items in case of purchase order.

    28. Question 28. What Is The Difference Between A Contract And Scheduling Agreement?

      Answer :

      While a scheduling agreement is for consignment, subcontracting and stock transfer, a contract is for Standard items and can be limited to a certain quantity or value.

      A contract can be created centrally with different pricing conditions for every plant whereas a scheduling agreement needs to be created at that particular plant location. In a contract, only time-dependant conditions can be created whereas in a scheduling agreement, you can have time-dependant or time-independent conditions subject to the customizations in the document type.

    29. Question 29. Can A Computer Help In Forecasting Future Demand?

      Answer :

      Yes, In the market today there are many computer software packages that can compute forecasted demand for goods held in inventory.

    30. Question 30. Explain The Importance Of Eoq?

      Answer :

      The EOQ level is the point at which stocking costs are at their lowest point for a given item.

    31. Question 31. What Is Source List?

      Answer :

      Source list include list of possible sources of supply for a material over a given framework of time. A particular material can be ordered from different vendors in different time intervals. This information can be maintained in a source list.

    32. Question 32. What Makes Eoq Work For Inventory Control?

      Answer :

      The EOQ works if its four assumptions match the case it is used on. The assumptions are:

      1. Annual demand, carrying costs and ordering costs can be estimated.
      2. Inventory level is divided by 2, no safety stock, goods used uniformly and are gone by next order.
      3. Stock-out, customer responsiveness and other costs not considered.
      4. No quantity discounts.

    33. Question 33. What Does Eoq Stand For?

      Answer :

      EOQ stands for Economic Order Quantity.

    34. Question 34. Explain What Is Invoice Verification?

      Answer :

      Once goods are procured from vendor and placed in company's premises through goods receipt then we need to pay to vendor for acquired goods and services. The amount to be paid along with details of material is provided by vendor in form of document that is known as invoice. Before paying to vendor we need to verify the invoice. This process of verifying invoice and paying to vendor is known as invoice verification.

    35. Question 35. Explain What Do You Mean By Reservation?

      Answer :

      Sometimes, stock need to be blocked in advance so that it can be available at a particular point of time. This is known as reservation. Reservation ensures that stock is available and it can be used when required. Reserved quantity can be viewed by tcode MMBE.

    36. Question 36. What Is The Importance Of Eoq?

      Answer :

      The EOQ level is the point at which stocking costs are at their lowest point for a given item.

    37. Question 37. What Are The Types Of Reordering Systems That Can Be Used In Inventory Control?

      Answer :

      There are several types of reordering systems, in this module we discussed three. The fixed order quantity uses fixed quantities of goods ordered at various order points to replenish inventory. The fixed order period use fixed times of reorder with various order quantities to replenish inventory to preset levels. The final system, just in time uses a constant flow of goods to match the level of demand.

    38. Question 38. Explain What Are Some Of The Movement Types For Stock Transport Order?

      Answer :

      One step transfers of materials can be posted using movement type 301. Other movement types are 303, 351, 641, or 643 in the stock transport order.

    39. Question 39. What Is Difference Between Planned And Unplanned Services?

      Answer :

      In planned services at the time of procurement specifications like quantity and price are known in advance. It means nature and scope of service is clear before procurement whereas in unplanned services at the time of procurement specifications like quantity and price are not known in advance. It means nature and scope of service is not clear before procurement. These services can be extended as per the requirement.

    40. Question 40. What Do You Mean By Outline Agreement?

      Answer :

      Outline agreement is a long term purchasing agreement with vendor containing terms and conditions regarding the material that is supplied by vendor. Outline agreement are valid up to certain period of time and cover a certain predefined quantity or value.

    41. Question 41. What Is Inventory Control?

      Answer :

      Inventory control is the process of reducing inventory costs while remaining responsive to customer demands. By this definition a store would want to lower its acquisition, carrying ordering and stock-out costs to their lowest possible levels. However a store would need to have enough inventories to meet any needs of its customers.

    42. Question 42. What Do You Mean By Special Stocks?

      Answer :

      Special stocks are stocks that are managed differently as these stocks did not belong to company and these are being kept at some particular location.

    43. Question 43. What Is Difference Between Contract And Scheduling Agreement?

      Answer :

      Contract is a long term outline agreement between vendor and ordering party over predefined material or services over certain framework of time whereas scheduling agreement is a long term outline agreement between vendor and ordering party over a predefined material or service which are procured on predetermined dates over a framework of time.

    44. Question 44. What Is Interference?

      Answer :

      Interference is a factor in forecasting demand. Interference is made up of all the factors that a forecaster has no control over. Factors that may be considered interference include natural disasters, unusual customer demands, or rare events in the business period.

    45. Question 45. What Do The Letters In The Eoq And Stocking Cost Formula Stand For?

      Answer :

      The letters in the formulas represent the quantity ordered(Q), the carrying cost of a unit(C), the demand for the units(D) and the cost of completing a order(S).

    46. Question 46. How Does The Consignment Cycle Operate?

      Answer :

      The various steps in consignment cycle are:

      1. Create consignment info record with proper tax code.
      2. Create Purchase order with item category K. 
      3. Create output condition record for KONS (output type).
      4. Authorize Goods Receipt (GR).
      5. Payment is settled through MRKO transaction even if invoice verification is not done.

    47. Question 47. What Is A Gr Blocked Stock And When Is It Used?

      Answer :

      The GR blocked stock is an option used in the goods receipt process when you are not sure about the quality of the goods received. In such a case, the stock is maintained as GR blocked either from a material viewpoint or exclusively for a purchase order item.

    48. Question 48. What Is A Order Point?

      Answer :

      A order point is a point in time at which a order is placed to replenish goods in inventory.

    49. Question 49. What Is Mrp? And How Is Lot Size Used?

      Answer :

      MRP is short for Materials Requirements Planning and it is a production planning technique that's used to manage the manufacturing process. It is basically used to determine your Material Planning procedure by specifying the various conditions like Reorder Point, Seasonal Requirement, Replenishment, Vendor Managed, Forecast Based and Master Production Scheduling (MPS). Lot size specifies the nature of material requirement in terms of Weekly, Monthly, Quantity and Maximum Replenishment.

    50. Question 50. Can Forecasting Help In Controlling Inventory?

      Answer :

      Yes, through the use of forecasts inventory levels can be set to meet the demands while keeping levels as low as possible.

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