SAP MM Interview Questions & Answers

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SAP MM Interview Questions & Answers

Experienced in SAP MM? SAP MM is the Materials Management which is handled under logistics area and managing the procurement activities. The activities that comes under this are planning, controlling and shipping and many more. MM Consultants in this role are responsible to handle process consulting. Free courses are available online to learn about SAP MM. Even though many other jobs are present, SAP MM job is unique. Good hands on knowledge on these concepts will put you ahead in interview. Every where, we can find job opportunities for this position. Wisdomjobs has interview questions which are exclusively designed for employees to assist them in clearing interviews. SAP MM interview questions and answers are useful for employees who are good at SAP technology.

SAP MM Interview Questions

SAP MM Interview Questions
    1. Question 1. What Mrp Procedures Are Available In Mm-cbp (consumption Based Planning)?

      Answer :

      Various material planning methods are used in MRP (Material Requirements Planning).

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

    2. Question 2. Under What Conditions Are Planned Orders Created? What May Planned Orders Be Converted To And How Is That Conversion Accomplished?

      Answer :

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

    3. Question 3. What Are The Organizational Levels Of The Enterprise Structure In R/3?

      Answer :

      The top level of the organizational plan is the Client, followed by Company Code, which represents a unit with its own accounting, balance, P&L, and possibly identity (subsidiary). The next level down is Plant, an operational unit within a company (HQ, Assembly Plant, Call Center, etc.). The Purchasing Organization is the legally responsibly group for external transactions. This group is further subdivided into Purchasing Groups.

    4. Question 4. What Are The Different Ways To Organize Purchasing Organizations?

      Answer :

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

    5. Question 5. What Are Special Stocks?

      Answer :

      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. Question 6. What Are Some Of The Options Available To Transfer Materials From One Plant To Another?

      Answer :

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

    7. Question 7. What Are Some Of The Common Stock Transport Order Movement Types?

      Answer :

      One step transfers of materials can be posted using MT 301. Other various transport scenarios differ in the MTs by the Goods Issues and Good Receipts. Common Goods Issues may use MTs 303, 351, 641, or 643 in the STO. A STOs Good Receipt often uses MT 101.

    8. Question 8. What Is The Difference Between A Purchase Order And A Purchase Requisition?

      Answer :

      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.

    9. Question 9. What Is An Indirectly Created Purchase Requisition?

      Answer :

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

    10. Question 10. What Is An Rfq And How Is It Different From The Quotation Form?

      Answer :

      A RFQ is a purchasing document and an invitation to a vendor(s) for quotation regarding needed materials or services. If multiple an RFQ is sent to multiple vendors, the system can automatically determine the best quote and send rejection letters in response to all others. The RFQ and the Quotation Form are one in the same in the system as vendor’s quotes are entered directly in the RFQ.

    11. Question 11. What Are The Transactions That Will Result In A Change Of Stock?

      Answer :

      A Goods Receipt is a posting acknowledging the arrival of materials from a vendor or production, which results in an increase in warehouse stock, a Goods Issue which results in a reduction in stock, or a Stock Transfer moving materials from one location to another.

    12. Question 12. When Would It Be Prudent To Post Goods Movements Via The Shipping Application?

      Answer :

      If picking, packing, and transportation operations need to be planned in detail. Also, in shipping, you can manage movements like returns from customers, vendors, and returns to stock. Movement Types in shipping start with a 6.

    13. Question 13. What Is A Reservation?

      Answer :

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

    14. Question 14. Can You Manually Generate A Purchase Requisition Referencing A Purchase Order Or A Scheduling Agreement?

      Answer :

      A Purchase Requisition cannot be created with reference to either of these, as they are documents controlled by the purchasing organizations.
      Requirements can be automatically generated with MRP that reference a Scheduling Agreement if the source list is maintained for item-vendor combination.

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

      Answer :

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

    16. Question 16. How Do Planned And Unplanned Consumption Affect Movement Types?

      Answer :

      In a customized Movement Type, you have defined which consumption value gets posted in the movement. Many will always be planned or unplanned, but for some there is a dependency on if the movement references a reservation. This would be planned consumption.

    17. Question 17. What Are Departmental Views?

      Answer :

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

    18. Question 18. Is Material Data Valid For All Organizational Levels?

      Answer :

      Control of master data depends largely on how each company sets up its Organizational levels - centralized or decentralized. Some material data is valid for all organizational levels while other data is valid only at certain levels. (I.e.: client, plant, sales org., etc.).

    19. Question 19. Why Would You Want To Create Physical Inventory Sheets To Perform An Inventory Cycle-count On A Material Or Materials?

      Answer :

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

    20. Question 20. What Is The Difference Between A Blanket Purchase Order And The Framework Order?

      Answer :

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

    21. Question 21. What Is Release Procedure?

      Answer :

      Release Procedure is approving certain documents like PRs or POs by criteria defined in the configuration. It is sensible to define separate release procedures for different groups of materials for which different departments are responsible, and to define separate procedures for investment goods and consumption goods.

    22. Question 22. How Do You Display Parked Documents?

      Answer :

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

    23. Question 23. How Do You Perform An Invoice Verification?

      Answer :

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

    24. Question 24. How Do You Perform A Goods Issue?

      Answer :

      Use Transaction MIGO. On the initial screen, enter the header data (you need not enter the Movement Type or the Plant as these are automatically copied from the order). Choose Goods Issue ,Create with Reference, To Order. If you know the order number, enter it directly. Using the By-products Indicator, you can simultaneously post the Goods Receipt of planned by-products. Using the Choose transaction/events indicator, you can display all transactions/events for an order and choose the transaction/events for which you want to post a Goods Issue. Copy the desired item(s). Check data on the overview screen. Post the document.

    25. Question 25. Where Do You Perform A Goods Issue?

      Answer :

      Use Transaction MIGO.
      It is possible that when MIGO is accessed that a different document screen appears than the one required. This occurs because SAP remembers the last Goods Movement transaction accessed per user login. To reach the Goods Issue Purchase Order screen, click the Dropdown Icon in the transaction field and select “Goods Issue”.

    26. Question 26. How Will Items Be Returned To The Vendor?

      Answer :

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

    27. Question 27. How Do You Create A Source List?

      Answer :

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

    28. Question 28. How Do We Get A Proper List Of Vendors To Send An Rfq?

      Answer :

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

    29. Question 29. What Are The Components Of The Master Data That Details A Companys Procurement Used By, Vendor Evaluation For Example?

      Answer :

      The key components of Master Data are: Info Record (ME11), Source List (ME01), Quota Arrangement (MEQ1), Vendor (MK01), Vendor Evaluation (ME61), and Condition Type (MEKA).

    30. Question 30. What Is Vendor Evaluation And How Do You Maintain It?

      Answer :

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

    31. Question 31. How Do We Create Consignment Stocks?

      Answer :

      Everything is the same as a normal PR or PO, except: Enter the item category “K” for the consignment item. This ensures that the Goods Receipt is posted to the consignment stores and an invoice receipt cannot be generated for the item. Also, do not enter a net price.

    32. Question 32. Can You Change A Purchase Requisition After It Has Been Created?

      Answer :

      Yes. Use Transaction ME52N. Check to see if the PR has already had a PO issued against it. If so, you must inform the Purchasing Group. Check if the PR has been approved. If so, you may only make changes to a limited extent and may be subject of approval. Check if the PR was created by MRP. In this case, you don’t have much control over the modification process.
      All changes to items are logged and stored. Information stored includes when the information was changed, who changed it, what the changes were, etc. Select the desired item in the item overview and choose Go To Statistics Changes.

    33. Question 33. What Is The Difference Between A Pr With A Master Record And Without A Master Record For The Material Being Ordered?

      Answer :

      If the master record exists, then all of the information about the Source List, Information Record, and Vendor Evaluation already exist in the system. If we don’t have a Master record for the material we are ordering, the material is generally being ordered for direct usage or consumption. You can specify which consumption account is to be charged which is also known as Account Assignment. For example, we assign the purchase costs associated with a requisition to our sales order or cost center.
      If the first situation exists, many times purchasing enters into a longer-term purchasing agreement with a Vendor, which is called an “Outline Agreement”. If the Outline Agreement is done, then Purchasing cannot issue a purchase order against a PR. It can only set up such an agreement (either a “Contract” or a “Scheduling Agreement”).

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

      Answer :

      Bring the Requisition up by using Material Management, Purchasing, Purchase Requisition, Display. Where the requisition overview screen is displayed, select an item by clicking on the selection box to the left of the item. Click on the General Statistics icon on the application tool bar. Select item. General Statistics icon. The screen appears, in the middle, under Order Statistics, in the field Purchase Order, if there is no number the PO has not been issued.

    35. Question 35. Where Is Material Master Data Saved?

      Answer :

      Tables MARA and MARC.

    36. Question 36. Where Is The Header Level And Item Level Data Saved In A Po?

      Answer :

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

    37. Question 37. How Do You Generate An Automatic Po After Creating A Pr Using A Particular Material?

      Answer :

      In MMR and VMR check Auto PO (MM02/XK02).
      Maintain the Source List and select the indicator for the source list record as MRP relevant (ME01). If more than one source list record is generated, make one of them fixed. Run MRP and the PRs generated will be pre-assigned with the source of supply (MD01). Enter ME59 for automatically creating POs from PRs.

    38. Question 38. How Can You Disable A Reservation In Mrp?

      Answer :

      Use Transaction Code OPPI to check “block stock”.

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

      Answer :

      Use Transaction MC49.

    40. Question 40. If You Have Created A Custom Movement Type And You Get A Not Allowed Error, Where Should You First Look For The Cause?

      Answer :

      Using Transaction Code OMJJ, check “Allowed Transactions” for the customized Movement Types.

    41. Question 41. How Do You Display A List Of All Reservations In The System?

      Answer :

      Run report RM07RESL.

    42. Question 42. How Can You Post A Goods Receipt If The Po Number Is Not Known?

      Answer :

      If you selected PO Number Not Known in Transaction MIGO, you can specify search criteria for the POs on the initial screen. The system then displays a list of purchase orders. Select and copy the required PO items.

    43. Question 43. How Do You Perform A Goods Receipt?

      Answer :

      Use Transaction MIGO. Enter the Header Data, select the Movement Type, Enter the PO Number, select the PO items to be copied, and then post the document.

    44. Question 44. How Can An Invoice Be Verified?

      Answer :

      Transaction Code OLMR may be utilized.

    45. Question 45. How Can You Process Vendor Returns Without A Purchase Order Reference?

      Answer :

      Use Transaction Code ME21N.
      Look for the Return columns and click it at the item details, MIGO_GR, Goods Receipt for Return Purchase Order Movement type will be 161 to deduct the stock and 162 for reversal. Before saving, check if there is a check in the Return Column to ensure that it is a return Purchase Order.

    46. Question 46. What Are Some Of The Initial Configuration Steps For Physical Inventory?

      Answer :

      Define Default Values for Physical Inventory Document, Batch Input Reports, Tolerances for Physical Inventory Differences, and Inventory Sampling. Cycle Counting should be configured as well.

    47. Question 47. What Are Some Of The Initial Configuration Steps For Inventory Management?

      Answer :

      Plant Parameters, Define System Message Attributes, Number Assignment (Allocate document type FI to transactions), Goods Issues, Transfer Postings, Define Screen Layout, Maintain Copy Rules for Reference Documents, Setup Dynamic Availability Check, Allow Negative Stocks ().

    48. Question 48. When, In Initial Configuration, Why Would You Have To Setup Stock Transport Order?

      Answer :

      If it is required to carry out an inter-plant Stock Transfer through SD, then this configuration is required and must be carried out.

    49. Question 49. What Are Some Of The Initial Configuration Steps For Purchase Requisitions?

      Answer :

      Define Document Types, Processing Time, Release Procedure (with and without classification), Setup Authorization Check for G/L Accounts, Define Number Range.

    50. Question 50. What Data Does The Information Record Contain?

      Answer :

      The Information Records has data on Units of Measure, Vendor price changes after a certain level, what materials have been procured by a specific vendor, price and conditions for relevant Purchase Organization, Tolerance limits for over/under delivery, Vendor evaluation data, planned delivery time, and availability time the vendor can supply the material.

    51. Question 51. How Do You Create A Vendor?

      Answer :

      Use Transaction Code XK01. Add the Vendor name, Company Code, Purchasing Organization, Account Group, and the Vendor address. Next add the country, Bank Key, Bank Account, Account Holder (an actual name), and then save the data.

    52. Question 52. What Are The Lot Size Attributes A Material Can Posses?

      Answer :

      Lot Sizing dictates the reorder quantity for a material. A material can have a static, periodic, optimum, or fixed lot size.

    53. Question 53. What Are Some Of The Data Points Provided By Purchasing For A Material?

      Answer :

      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. Question 54. How Do You Create A Material?

      Answer :

      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. Question 55. What Are The Main Purchasing Tables?

      Answer :

      EKBN          Purchase Requisition
      EBKN          Purchase Requisition Account Assignment
      EKAB          Release Documentation
      EKBE          History of Purchase Document

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

      Answer :

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

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

      Answer :

      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. Question 58. How Do You Configure The Release Procedure?

      Answer :

      Use Transaction OMGQ.

    59. Question 59. How Do You Create A Class?

      Answer :

      Class is defined as the group of characteristics, which can be attributed to a product. Use Transaction CL01. Enter the value for the Class name and a small description. Select the group from it. The values on the different tabs are not mandatory, so you can skip the values if you wish or you can go to any extent needed. Save, and the Class is created.

    60. Question 60. How Do You Change Characteristic?

      Answer :

      Use Transaction Code CT04. Follow these steps: Format (numeric, character, etc.), Unit of Measure, Templates, Required Entry, Intervals as Values (?), descriptions for texts for characteristics and characteristic values, display options for characteristics on the value assignment screen, Allowed Values, Default Values that are set automatically on the Value Assignment Screen.

    61. Question 61. How Do You Define A Release Procedure For Prs And Pos?

      Answer :

      Use Transaction ME54 and ME28 respectively.

    62. Question 62. How Can One Keep Users From Using Standard Mm Movement Types?

      Answer :

      Standard Movement Types should not be deleted from the system. The account assignments, however, may be deleted for a particular Movement Type in table T030 using transaction OBYC.
      Another way to achieve the same result is to enter Movement Type in transaction OMJJ. Remove MBXX from allowed transactions.

    63. Question 63. What Needs To Be Present In Order For Material Type To Be Automatically Copied From One View To Another?

      Answer :

      When creating any view, the Industry Sector and Material type will be automatically copied from an existing view, so long as at least one view exists.

    64. Question 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?

      Answer :

      You can use transaction MM50.
      To extend a material to a different plant requires selecting the new plant on the organizational level screen. Note that all views of a material are not extended unless they were selected on the initial screen. In addition, each plant may have a different system configuration requiring additional inputs on each of the departmental screens. Material changes made in one plant do not change that material in other plants.

    65. Question 65. When Creating A New Material, What May Prompt Some Of The Possible Material Types?

      Answer :

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

    66. Question 66. When Can A Production Resource/tool Be Defined As A Material?

      Answer :

      A Production Resource / Tool can be defined as a material if purchasing and inventory functions are to be carried out for that PRT.
      The information required to be input is dependent upon which department views are being created. Thus, material master information is typically entered at different times by numerous system users. Note that to add a view, the “Create Material” transaction is used rather than the “Change Material” transaction.

    67. Question 67. What Views Are Possible For A Material?

      Answer :

      The material type selected controls the views possible for material.
      For a material to be used in the system it needs to be created for each plant. Multiple views of a material are possible but at a minimum, the material needs to have a description and a base unit of measure assigned on the basic data view. Additional department views (i.e. Accounting, Sales, Purchasing, MRP, Warehouse) can be added at a later time by extending the material. As additional plants are added, a material will need to be extended to the plants before it can be used there.

    68. Question 68. What Sap Program Is Used To Update Or Create Material Master Records?

      Answer :

      RMDATIND is used to update Material Master Records and can be used for such assignments as extending all materials to a new plant.

    69. Question 69. Where Can You Dictate How Planned Orders Are Converted Into Requisitions In Mrp?

      Answer :

      Look at the Transaction Code OPPR indicator. Assign proper indicator.

    70. Question 70. What Are Some Of The More Important Materials Management Tables?

      Answer :

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

    71. Question 71. How Are The Various Mm Configuration Transactions Accessed?

      Answer :

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

    72. Question 72. How Do You Access The Materials Management Configuration Menu?

      Answer :

      Transaction Code OLMS has a host of options that are not accessible through the IMG.

    73. Question 73. How Do You Set Price Control For Receipts (goods/invoice) Telling The System How To Value Stocks?

      Answer :

      Transaction Code OMW1 allows you to set price control to S (Standard Price) or V (Moving Average Price).
      Under Standard Price (S), the materials and accounting documents are both valid. The one with the lower value will be posted with a price variance entry.

    74. Question 74. Why Would An Organization Need To Allow Negative Stocks?

      Answer :

      Negative Stocks are necessary when Goods Issues are entered necessarily (business process reasons) prior to the corresponding Goods Receipts and the material is already located physically in the warehouse.

    75. Question 75. What Is An Invoice Verification?

      Answer :

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

    76. Question 76. What Is The Source List?

      Answer :

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

    77. Question 77. What Is A Quotation?

      Answer :

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

    78. Question 78. Give Some Examples Of The Information Relating To A Materials Storage/warehousing?

      Answer :

      Some examples are Unit of Issue, Storage Conditions, Packaging Dimensions, Gross Weight, Volume, and Hazardous Materials Number. Also, there are various Storage Strategies information and options.

    79. Question 79. What Are The Various Steps In The Mm Cycle From Material Creation Through Invoice?

      Answer :

      The following creates a rough picture of the MM Cycle. Create material, create vendor, assign material to vendor, procure raw material through PR, locate vendor for certain material, processing GR, goods issue, and invoice verification.

    80. Question 80. What Is A Source List?

      Answer :

      The Source List identifies preferred sources of supply for certain materials. If it’s been maintained, both the source of supply and the time period. The Source List facilitates gaining a fixed source of supply, blocked source of supply, and/or helps us to select the priffered source during the source determination process.

    81. Question 81. What Is A Price Comparison?

      Answer :

      Perform a price comparison using ME49 and one may compare quotations from different vendors.

    82. Question 82. What Is A Material Type?

      Answer :

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

    83. Question 83. If You Have A Multi-lineitem Po, Can You Release The Po Item By Item?

      Answer :

      No, a PO is released at the header level meaning a total release or “With Classification”.
      PRs, on the other hand, have two release procedures possible. “With Classification” as described above, and “Without Classification” where it is only possible to release the PR item by item.

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

      Answer :

      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. Question 85. What Is Sap R/3?

      Answer :

      • 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 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. Question 86. What Are The Core Functionalities Of The Sap System?

      Answer :

      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. Question 87. How Can You Define An Mm Module? What Is Its Importance In Sap R/3?

      Answer :

      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. Question 88. How Is The Mm Module Integrated With Other Modules Of Sap?

      Answer :

      •  The MM module deals with material procurement on the basis of the production required; therefore, it is linked with the Purchasing Planning (PP) module.
      •  The Sales and Distribution (SD) module is proportionally related to the MM module, because it uses information about the quantity of material sent for production.
      •  The MM module is related to the Warehouse Management (WM) module, because the MM module maintains information about the material storage and material transfer inside an organization.
      • The MM module is also related with the Financial Accounting (FI) module, because every operation performed in the MM module directly impacts the financial process of the organization.

    89. Question 89. What Are The Levels Of Organizational Units Of Enterprise Structure In R/3?

      Answer :

      The client is the top level of the organizational units of Enterprise Structure in R/3. The client is followed by the company code, which represents a unit with its own accounting, balance, and P&L The next level of organizational units of Enterprise Structure is plant, representing an operational unit of a company.

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

      Answer :

      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. Question 91. How To Create A Client In Mm Module?

      Answer :

      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": Overview screen appears where you can create a new client.

    92. Question 92. How To Create A Company Code In Sap?

      Answer :

      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. Question 93. How Can You Assign A Company Code To A Company In Sap?

      Answer :

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

      Answer :

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

    95. Question 95. How Many Company Codes Can Be Assigned In One Chart Of Accounts?

      Answer :

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

    96. Question 96. How Many Company Codes Can Be Assigned To A Company?

      Answer :

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

    97. Question 97. What Is A Plant In Mm?

      Answer :

      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. Question 98. How Many Company Codes Can Be Assigned To A Plant?

      Answer :

      You can assign only one company code to a plant.

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

      Answer :

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

    100. Question 100. Define Storage Location In Sap.

      Answer :

      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. Question 101. Can Storage Locations Be Created Automatically? How Can They Created Automatically?

      Answer :

      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 Automatically.

    102. Question 102. Can Two Plants Have A Common Storage Location?

      Answer :

      A storage location is a unique four-character alphanumeric key; therefore, it cannot be common for two plants.

    103. Question 103. What Is The Menu Path To Configure The Storage Location?

      Answer :

      You can configure the storage location by navigating the following menu path:
      Select Display IMG ->Enterprise structure ->Definition->Maintain storage location

    104. Question 104. What Are The Different Ways Of Organizing Purchasing Organizations?

      Answer :

      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. Question 105. What Is The Reference Purchasing Organization In Sap?

      Answer :

      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. Question 106. What Is Master Data In Mm Module?

      Answer :

      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. Question 107. How Is Master Data Important In Mm Module?

      Answer :

      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. Question 108. What Is A Material Master File?

      Answer :

      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. Question 109. Why Are Material Master Records Used In Sap?

      Answer :

      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. Question 110. How Is The Information Of Material Master Records Updated?

      Answer :

      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. Question 111. What Data In Material Master Is Maintained At The Client Level?

      Answer :

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

    112. Question 112. What Are The Data In Material Master That Are Maintained At The Company Code Level?

      Answer :

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

      Answer :

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

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

      Answer :

      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. Question 115. How Is Material Information Structured In Material Master Records?

      Answer :

      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. Question 116. What Is A Batch?

      Answer :

      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.

    117. Question 117. Why Is Batch Record Important?

      Answer :

      • 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. Question 118. How To Create A Batch?

      Answer :

      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. Question 119. How Can Batch Records Be Changed?

      Answer :

      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. Question 120. How To Delete A Batch?

      Answer :

      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. Question 121. What Is Batch Information Cockpit?

      Answer :

      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.

    122. Question 122. What Is A Serial Number?

      Answer :

      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. Question 123. State The Importance Of Classification Data.

      Answer :

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

      Answer :

      The following are the main master files used in MM:

      •  Material master file
      •  Inventory master file
      •  Vendor master file

    125. Question 125. Give Some Example Of Master Data In Material Management (mm).

      Answer :

      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. Question 126. What Is Vendor Master Data?

      Answer :

      Vendor master data contains details of each vendor who supplies materials or services to an enterprise. The vendor master data is stored in individual vendor master records consisting data, such as vendor's name vendor's address currency used for the transaction payment terms and contact person's name sales staff.

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

      Answer :

      The different fields in a vendor master data are as follows:

      •  The name and address of the vendor
      •  The currency in which the transaction would be done
      •  The terms and conditions of payment
      •  The names of important contact persons
      •  The different accounting information, such as the reconciliation account in the general ledger

    128. Question 128. How To Create A Vendor Number Range?

      Answer :

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

    129. Question 129. What Is The Transaction Code To Access The Materials Management Configuration Menu?

      Answer :

      The OLMS transaction code is used to access the Materials Management Configuration menu.

    130. Question 130. What Are Purchasing Information Records?

      Answer :

      The purchasing information records, also known as info record, contain information related to the material and vendor who is supplying the material. It also contains details about the material, such as the current price of the material.

    131. Question 131. What Are The Categories Of Purchasing Information Record?

      Answer :

      The following are the categories of purchasing information record:

      •  Standard — Contains information for the standard purchase order. In this type of purchasing info record, you can create info records for materials and services which do not have master record.
      •  Subcontracting— Contains the ordering information for subcontract orders.
      •  Pipeline— Contains information of the commodity that is sent through the pipeline such as oil, water.
      •  Consignment— Contains information of the material that is in vendor's possession and is kept by the vendor at some other premises at his own cost.

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

      Answer :

      The prerequisites of creating a purchasing info record are as follows:

      •  Material number — Before creating a purchasing info record, the material number of the  Material Master record should be known
      •  Manufacturer Part Number (MPN) Material number — Before ordering a material having a  MPN, you must know its MPN material number
      •  Vendor number— The number of the vendor master record should also be known
      •  Organizational level — Suppose the purchasing info record is for a particular purchasing  organization or plant then the code specific to that purchasing organization or plant is  required

    133. Question 133. How Can You Create A Purchasing Information Record?

      Answer :

      You can create a purchasing information record either manually or automatically by setting the Info update indicator when maintaining a quotation, a purchase order, or an agreement.

    134. Question 134. Can Purchasing Info Record Be Created Without A Material Number?

      Answer :

      Yes, you can create a purchasing info record without a material number. If the material is without the material number, you need the following information for creating the purchasing info record:

      •  Material short text
      •  Order unit
      •  Material group
      •  Short term key

    135. Question 135. How Is An Information Record Based On The Material Master Created?

      Answer :

      At first, you need to create the info record by selecting SAP Menu->Master Data-Info Record->Create. Details, such as vendor number, material number, purchase organization, or plant number, are then entered. The number of the information record (in case of external assignments) is then entered. Next, the general data for vendors, ordered quantity, origin of data, supplying information, and Customs Tariff Number is entered. The planned delivery time, purchasing groups, and standard purchasing quantity are then entered. The control data is then checked. The default value of tolerance data and purchasing group are taken from the material master record. The net price is entered and then select Go TO->Texts to display the text overview. If the PO text is already defined, it appears in the material master record; otherwise, it needs to be entered. After all these entries, the record is saved.

    136. Question 136. What Is Document Management System In Sap?

      Answer :

      Document management system (DMS) in SAP helps you store external documents, such as the goods or material pictures. By using the DMS, you can set the maximum size of the picture that can be uploaded in a document. The DMS helps to link these external documents with the appropriate SAP objects.

    137. Question 137. How Will You Create A Document?

      Answer :

      You can create a document by using the CV01N transaction code or by using the following menu path:
      SAP Menu -> Logistics -> Central Functions -> Document Management System -> Document -> CVOIN-Create.

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

      Answer :

      The key fields that you must specify while creating a document are:

      •  Document Number — Refers to a unique alpha-numeric number that is used to identify  the document. .
      •  Document Type— Refers to a document type that categorizes a document.
      •  Document Part— Refers to a document's section that is treated as an in dividual  document.
      •  Document Version— Refers to a two-character number that represents the document  version

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

      Answer :

      After creating a document, you can link it with the Material Master record by using the MM01 transaction code or by using the following menu path:
      SAP Menu -> Logistics -> Materials Management -> Material Master -> Material -> Create (General) -> MM01- Immediately.

    140. Question 140. How Will You Link A Document To A Vendor Master Record?

      Answer :

      Once you complete creating a document, you can link that document with the vendor master record by using the XK01 transaction code or by using the following menu path:
      SAP Menu -> Logistics -> Materials Management -> Purchasing -> Master Data -> Vendor -> Central -> XK01- Create.

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

      Answer :

      A Document Management System (DMS) stores large number of documents; thereby, it becomes quite difficult to find the right document. In such a case, the classification system is used to describe a document that uses a set of characteristics combined together to form a class, which is later assigned to a document. The class assigned for a document can be used to find a specific document from the DMS.

    142. Question 142. What Is The Source Of Error "not Allowed" In Case Of Custom Movement Type Creation?

      Answer :

      You need to check the allowed transaction for the customized movement types and use the OMJJ transaction code.

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

      Answer :

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

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

      Answer :

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

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

      Answer :

      The vendor evaluation is an activity to find a vendors performance by giving a particular score on a scale of 0 to 100. Alternatively, you can use a transaction code ME61 and enter purchase organization and vendor number to view the details.

    146. Question 146. Write The Name Of The Sap Program Used To Updated Or Create Material Master Records (mmr).

      Answer :

      The RMDATIND program of SAP is used to update or create Material Master Records (MMR).

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

      Answer :

      There might be a case when you need to store a material at more than one storage locations. In this case, to store the data, you need to create different material master records for each storage location. This is called the storage location-specific material master data.

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

      Answer :

      If purchasing and inventory functions are carried out for Production Resource  Tool (PRT), then a PRT is defined for a material.

    149. Question 149. What Transaction Code Is Used To Extend The Material View?

      Answer :

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

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

      Answer :

      A source list is used to identify sources of supply for certain materials. The following is the menu path to define a source list:
      Select Logistics -> Materials management -> Purchasing -> Source list.

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

      Answer :

      Material numbers are unique numbers used to identify a material.

    152. Question 152. What Does An Industry Sector Control?

      Answer :

      While creating the material master record for a material, you need to classify the material according to the industry type. This is called the industry sector. The industry sector controls the screen appearance, the screen sequence, and the appearance of industry-specific fields on individual screens in the material master record.

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

      Answer :

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

    154. Question 154. What Is Valuation Category?

      Answer :

      The valuation category specifies the standard used to differentiate the different partial stocks. In simple words, you can say that valuation category is the criteria to define partial stocks. The standard system comprises a variety of valuation categories, such as B and H. B is used for procurement type that is here the stock is divided up depending on whether the stock is procured externally or manufactured in-house. On the other hand, H is used for origin, that is here the stock is divided oh the basis of from where it was delivered. The valuation category in the Material Master record holds every material that is assigned for valuation.

    155. Question 155. What Does The Material Type Control?

      Answer :

      The material type controls the materials stock management, which implies:

      •  If there is a change in the quantity of the material, it should be updated in the material master record.
      •  Along with the change in the material master record, there should be changes in the stock accounts also.

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

      Answer :

      MOS2 is the transaction code to create a material type.

    157. Question 157. What Material Types Are Prompted While Creating A New Material?

      Answer :

      Click the F4 key to select the material type for a material that you want to create. For example, the material type FHMI is used for Prod. Resources/tools, the material type ROH is used for raw materials, and FERT is used for finished product.

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

      Answer :

      The following is the menu path to define material type attributes:
      Select Logistics Master Data: Material Master -> Material -> Control data -> Define material type attributes.

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

      Answer :

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

    160. Question 160. How Are User Defaults Set For Views?

      Answer :

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

    161. Question 161. List The Steps To Create A Profile.

      Answer :

      You can create a profile by following these steps:
      1. Select Profile -» MRP Profile from the Menu screen to display the Initial Create Profile screen.
      2. Enter the value in the key file that you want to assign in the profile.
      3. Select Goto -> Selection to display the Selection screen.
      4. Enter a profile description and select the fields that you want to include in the profile.
      5. Select Goto -> Data to display the Data screen.
      6. Enter your data in the Data screen and save the profile by selecting Profile -> Save.

    162. Question 162. How Are The Characteristics Changed?

      Answer :

      The characteristics are the properties that describe the length, color, and other related features of an object. Perform the following steps to change the characteristics of an object:
      Select SAP Menu->Gross App. Components->Classification System->Master Data->Characteristics
      Alternatively, the CT04 transaction code is used to change the characteristics.

    163. Question 163. How Is A Class Created?

      Answer :

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

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

      Answer :

      Usually, the raw materials cannot be included in the sales view. However, the raw materials can be included in the sales view only when they are sold to procure finished products in return.

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

      Answer :

      The key fields of the material master table are material groups, material status, divisions, storage conditions, labs and offices, basic materials, container requirements, measure groups, container requirements, and temperature.

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

      Answer :

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

    167. Question 167. What Is Non-valuated Material?

      Answer :

      The material that is maintained on the basis of the quantity rather than its value is called the non- valuated material. The non-valuated material can only be withdrawn from the stores or warehouses  only when it is transferred to "valuated" stock.

    168. Question 168. How Can You Access The Additional Data Screen?

      Answer :

      You can access the additional data screen in a material master record from any view by selecting additional data in the standard material master.

    169. Question 169. How To Move A Material Master Record From One Sap System To Another?

      Answer :

      You can use either of the two ways to move data from one SAP system to another.
      1. Using direct input
      2. Using Application Link Enabling (ALE)

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

      Answer :

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

    171. Question 171. What Is The Purchasing Value Key?

      Answer :

      It is the key, which determines the following:

      •  Reminder keys— Keys that help determine the number of the days before or after the vendor has to be reminded for the material procurement
      •  Under delivery tolerance limit & Over delivery tolerance limit
      •  Order acknowledgement requirements in purchase order

    172. Question 172. How Can You Configure The Purchasing Value Key?

      Answer :

      You can configure the purchasing value key by performing the following steps:
      1. Open the SAP implementation guide.
      2. Click Materials Management->Purchasing->Material Master->Define Purchasing Value Keys.
      This opens the Change View "default Values: Material Master": Overview page.
      3. Enter the New Entries button. This opens the New Entries: Details of Added Entries page.
      4. Enter the appropriate values in the fields.
      5. Click the Save button on the toolbar.

    173. Question 173. What Is Vendor Sub-range?

      Answer :

      The vendor sub-range is defined as a subdivision of the total range of products provided by a vendor. Vendor sub-ranges are required when you create or maintain Material Master data.

    174. Question 174. What Is A One-time Vendor?

      Answer :

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

    175. Question 175. Why Is Negative Stock Needed In An Organization?

      Answer :

      Negative stock is needed in an organization when a material is shipped to a customer and the production is not confirmed or there is not enough stock to satisfy the requirement. The system allows issuing the material and inventory shows a negative quantity of stock, until the product of material is confirmed.

    176. Question 176. How Are The Consignment Stocks Created?

      Answer :

      The consignment stocks are created in the normal purchase order or requisition, but the main thing to consider is that the K category is to be entered for the consignment item. As a result, the goods issued are posted to the consignment stores and the invoice receipt is not generated.

    177. Question 177. Define The Consignment Cycle?

      Answer :

      Consignment cycle is much more similar to the purchase cycle except that when you create goods receipts of the consignment stocks, only QTY (quantity) is updated without creating any accounting documents. Once the goods are utilized, consignment is settled. The value of the consumed or issued consignment stocks is used from the active purchase info record.

    178. Question 178. How Is Consignment Material Procured?

      Answer :

      The consignment material is procured through purchase requisitions, purchase orders, and outline agreements.

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

      Answer :

      You can take consignment stocks from the vendor into your own stock by performing the following steps:
      1. Select Goods movement->Transfer posting to display the initial screen.
      2. Enter the plant name and the location where you want to store the materials.
      3. Select Movement type->Transfer posting->Consignment->Consignment to own.
      4. Select Continue to display the collective entry screen.
      5. Enter the name of the vendor, the materials, and the quantity of materials.
      6. Enter the receiving storage location if you want to store the materials in another storage location.
      7. Post the document. This makes the vendor liable to change the storage location of the materials.

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

      Answer :

      You can do the invoicing of consignment stocks by performing either of the following:

      •  Invoicing with purchase order
      •  Invoicing without purchase order

    181. Question 181. How Can We View The Stocks Provided To Vendor?

      Answer :

      The stocks of material provided to vendor can be viewed by using the SC Stock Monitoring for Vendor report. The report can be accessed by selecting Purchase Order->Reporting->SC stocks per vendor from the menu. With this report, the current status of the stocks, the planned issues, and the planned receipts can be viewed.

    182. Question 182. How Are Components Consumed In Case Of Subcontracting?

      Answer :

      In subcontracting, the end product is ordered by using a subcontract order. The materials or components required by the vendor to manufacture the end product are mentioned in the purchase order. The components are posted to the stock of material provided to vendor in Inventory Management. When the components are supplied to the vendor, the vendor manufactures the end-product and delivers it. At this point, the goods receipt with reference to the subcontract order is posted. The goods receipt also contains the posting of the consumption of the components from the stock of material provided to vendor. In case the components consumed by the vendor are more or less than that specified in the purchase order, an adjustment needs to be posted to correct the consumption of components.

    183. Question 183. What Is The Need Of Creating Physical Inventory Documents For An Inventory Cycle-count Procedure Of A Material Or Materials?

      Answer :

      For a cycle-count procedure, the physical inventory documents are needed, because these are used to record inventory levels of the materials.

    184. Question 184. What Is The Difference Between Planned And Unplanned Consumption?

      Answer :

      The difference between planned consumption and unplanned consumption is that planned consumption is updated if goods are withdrawn due to reservation, whereas unplanned consumption is updated, if goods are withdrawn from stock without a reservation.

    185. Question 185. How Can One Vendor Obtain Components From Another Vendor Or Third-party?

      Answer :

      The components can be provided by a third party, such as another vendor. In this case, the subcontractor is specified as the delivery address in the purchase order. This implies that the components are directly delivered to the subcontractor. To order components for a subcontract order from another vendor, perform the following steps:
      1. Select Purchase order->Create->Vendor known from the Purchasing menu.
      2. Enter the vendor of the components and the desired plant.
      3. Enter the components.
      4. Select Item->More functions-> Delivery address. A dialog box appears in which the delivery  address can be entered.
      5. Enter the number of the subcontractor in the Vendor field.
      6. Select the SC vendor box. As a result, the components at the goods receipt are posted to the stock of material provided to the vendor.
      7. Save the purchase order.

    186. Question 186. How Is Invoice Verification Of Subcontracting Po Done?

      Answer :

      The invoice verification of subcontracting PO is done in the same way as it is done in purchase order.

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

      Answer :

      A document can be manually attached to a purchase order by using the document management system in SAP. In case when the purchase order is prepared using the T-code ME21N, then no attachment can be added. You need to save the purchase order and re-open with the T-code ME22N. Click the service for object button, select Service Object Button-> Create-> Create Attachment, and then select the file to be attached.

    188. Question 188. How Can A Subcontract Order Be Created?

      Answer :

      A subcontract order can be created by performing the following steps:
      1. Enter the end-product to be ordered and the item category for subcontracting (L) in the order item.
      2. Press the Enter key to display the screen for component processing.
      3. Enter the components required by the vendor to manufacture the end-product.
      4. Save the purchase order.

    189. Question 189. What Do You Mean By The Lot Size?

      Answer :

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

    190. Question 190. What Do You Mean By A Reservation?

      Answer :

      A reservation is a document that ensures availability of materials in the warehouse when materials are required for transferring materials to a customer. It contains information, such as which materials are needed, what quantities of materials are required, and when or where the materials are needed. It helps the Material Requirement Planning (MRP) system to avoid lack of stock in the warehouse.

    191. Question 191. What Transaction Codes Are Used With Reservations?

      Answer :

      The following transaction codes are used with reservations:

      •  The MB21 transaction code: Creates a reservation
      •  The MB22 transaction code: Changes a reservation
      •  The MB23 transaction code: Displays a reservation
      •  The MB25 transaction code: Displays lists of reservations

    192. Question 192. How Is The List Of All Reservations In The Systems Displayed?

      Answer :

      The reservation list can be displayed by running the RM07RESL report.

    193. Question 193. State The Difference Between Stock Transfer And Transfer Posting?

      Answer :

      Stock transfer is the physical movement of goods from one store to another store or one plant to another plant. Transfer posting is movement of goods from one stock type to another or from one storage location to another storage location within a plant.

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

      Answer :

      OMJJ is the transaction code to create movement types.

    195. Question 195. How To Create Movement Type?

      Answer :

      Perform the following steps to create a movement type:
      1. Select the standard movement type 201 from the Determine Work Area Entry dialog box.
      2. Click the copy icon and then overwrite 201 with Z01.
      3. Select the new movement type Z01 from the Determine Work Area Entry dialog box.
      4. Select Reversal-> follow-on movement.
      5. Enter the reversal movement type.

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

      Answer :

      Stocks can be transferred between plants that belong to different company codes. Such a stock transfer process can be done in any of the following ways:

      •  One-step plant-to-plant stock transfer
      •  Two-steps plant-to-plant stock transfer
      •  STO without delivery through shipping
      •  STO with delivery through shipping

    197. Question 197. How Can A Stock Transfer Be Monitored In Purchasing?

      Answer :

      A stock transfer can be monitored in Purchasing by using the following stock documents:

      •  Purchase requisition
      •  Stock transport order (STO)
      •  Stock transport scheduling agreement

    198. Question 198. Can A Purchase Requisition Be Generated Automatically?

      Answer :

      You can generate a purchase requisition automatically only in case where a material is sent out for external processing, for example subcontracting work. Another situation where you may need to generate a purchase requisition automatically is when the bill of materials is for a material other than a non-stock item.

    199. Question 199. State The Configuration Steps For Purchase Requisition?

      Answer :

      The steps for the purchase acquisition are as follows:
      1. Defining of document type
      2. Processing Time
      3. Release Procedure
      4. Authorization Check
      5. Defining of the number ranges

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

      Answer :

      To change a purchase requisition after it is issued, the first task is to check whether a purchase order against was issued or not. If it is issued, then the purchase groups are informed. Next step is to check whether the purchase requisition is approved or not. If it is approved, then only change to the limited extent is possible. Also if the purchase requisition is created by the MRP, then much less interference in the process is possible. Keeping all these parameters in mind, regarding all the changes that are going to be brought into effect, select the desired item and select Go To-> Statistics ->Changes link.

    201. Question 201. State The Differences Between The Purchase Requisition With A Master Record And Without A Master Record?

      Answer :

      In case of the purchase requisition with the master record, the source list, information record, and vendor evaluation are present in the system. In this case, the outline agreements are generated due to the changing of the short-term purchasing into the long-term agreement. As a reason, the purchase order cannot be issued against a purchase order, but only an agreement can be set up. If the material master is not present, then the material is ordered as a consumable item. The account assignment is done by specifying the consumption accounts against this acquisition. For example, the purchase information related with this requisition can be assigned to a specific cost center.

    202. Question 202. State The Importance Of The Vendor Evaluation In The Purchase Department?

      Answer :

      Vendor evaluation is an important function of the purchase department as it supports in optimizing the procurement process by selecting vendors to supply materials or services.

    203. Question 203. What Are The Main Criterias Of Vendor Evaluation?

      Answer :

      The main criterias of vendor evaluation are as follows:

      •  Price Quality
      •  Delivery
      •  Service and Support
      •  External Service

    204. Question 204. What Are The Document Types Used In Prs?

      Answer :

      Purchase requisitions (PRs) are internal documents of an enterprise. These documents are used to request the Purchasing department of the enterpriser to procure a particular material or a service. The quantity of the requested material and the date of the procurement are also specified in the PRs. The document types used in PRs are as follows:
      1. Request for Quotation (RFQ).
      2. Outline Agreement.
      3. Purchase Order.

    205. Question 205. What Is The Difference Between An Indirectly Created And Directly Created Purchase Requisition?

      Answer :

      A purchase requisition is said to be created indirectly when it is initiated through another SAP component, such as consumption-based planning, project system, plant maintenance, and production planning and control. On the other hand, a directly created purchase requisition is the one that is manually created through the requesting department. The person concerned has the full control to decide the item, the quantity to be ordered, and the delivery date of the order.

    206. Question 206. Can A Purchase Requisition Be Manually Generated Through The Reference Of A Purchase Order Or A Scheduling Agreement?

      Answer :

      A purchase requisition cannot be generated either by using the reference of a purchase order or by using a scheduling agreement.

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

      Answer :

      A purchase order is a document issued by a buyer to a seller which consists of the type and quantity of the goods or services the seller will provide to the buyer at a specified date.

      A purchase order consists of:

      •  Document Header — Relates to the entire purchase order
      •  Number of Items — Relates to the number of items to be provided by the seller to the  buyer.

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

      Answer :

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

    209. Question 209. What Are The Document Types Used In Po?

      Answer :

      The document types used in PO are:

      •  Standard Purchase Order (NB)
      •  Stock Transport Order (TB)
      •  Framework Order

    210. Question 210. What Is The Difference Between Blanket Purchase Order And The Service Order?

      Answer :

      The blanket purchase order is used for consumable materials, such as office paper with a sort text. In case of blanket purchase order, no Good Receipt (GR) is required for the purchase order. In framework order, the document type is used for purchase order and GR and Service Entry (SE) are required for purchase order.

    211. Question 211. What Is Price Comparison?

      Answer :

      Price comparison is used to compare quotations from different vendors. You can use transaction code ME49 to perform a price comparison between different vendors.

    212. Question 212. What Are The Document Types Used In Sa?

      Answer :

      The document types used in SA are:

      •  LP for standard scheduling agreements
      •  LT for stock transport scheduling agreements
      •  LPA for scheduling agreements with release documentation

    213. Question 213. What Are The Document Types Used In Contract?

      Answer :

      The document types used in Contract are:

      • MK
      • WK

    214. Question 214. What Is A Contract?

      Answer :

      A contract is an agreement between a customer and a vendor that states that the vendor will supply material to the customer at an agreed price for a specified period of time. It can be based on either a total quantity or a total price. A contract avoids the need to create a new purchase order each time the material or service is required.

    215. Question 215. What Are The Different Types Of Contracts?

      Answer :

      A contract can be one of the following two types:

      •  Quantity contract — In this type of contract, the purchasing department agrees with the  vendor for supply of a specified quantity of material, or services.
      •  Value contract — In this type of contract, the purchasing department can limit the total  spending for a material with a vendor. The release orders are valid only till the total  spending for the value contract equals the total agreed upon value.

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

      Answer :

      A scheduling agreement contains the details of a delivery schedule whereas a contract contains only quantity and price information and does not contain any details of specific delivery dates.

    217. Question 217. What Is The Difference Between Release Procedure In Internal Documents And External Documents?

      Answer :

      The release procedure differs for internal and external documents. The internal document and the purchase requisition can be released either at the item level or at the header level. Additionally, the internal document can be released ether with classification or without classification. The external document, such as the purchase order or the request for quotation, can only be released at the header level by the classification method.

    218. Question 218. What Are The Main Documents Used In Mm?

      Answer :

      The following are the main documents used in MM:

      •  Purchase requisitions
      •  Purchase orders
      •  Goods transfers
      •  Goods receipts
      •  Goods issues

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

      Answer :

      The following are the different steps of the MM cycle:

      •  Create material
      •  Create vendor
      •  Assign material to vendor
      •  Procure raw material by using purchase requisition
      •  Locate vendor for certain material
      •  Process goods receipts
      •  Goods issue, and
      •  Invoice verification

    220. Question 220. What Is The Definition Of Procurement?

      Answer :

      Procurement can be defined as the purchase of goods or services at the best possible total cost in correct amount and quality. It is the process of acquiring goods and services that covers both acquisitions from third parties and from in-house providers.

    221. Question 221. What Is An Account Assignment Category In A Po Document?

      Answer :

      The Account assignment category field plays an important role in the purchasing documents. It contains many control functions that help to determine the objects that are charged in case of an ordered material. The ordered material must be procured for direct usage or consumption. With the help of account assignment category in the purchasing documents, the cost of the material can be allocated to a single Controlling object or it can be allocated among various Controlling objects.

    222. Question 222. What Is The Difference Between A Purchase Order And Purchase Requisition?

      Answer :

      A purchase order is a document type that gives notification about formal requests for materials or services from an outside vendor or plant. A purchase requisition is a document type that gives notification about the need for materials or services.

    223. Question 223. What Is The Creation Indicator?

      Answer :

      The creation indicator defines whether or not the planned orders, purchase requisitions, or schedule lines must be created for materials that are procured externally. It also defines whether or not MRP lists need to be created.

    224. Question 224. Define Automatic Generation Of Purchase Orders From Purchase Requisitions.

      Answer :

      The SAP system can automatically convert purchase requisitions into purchase orders. This task can be performed either online or in the background. In the process of conversion, the SAP system attempts to merge as many purchase requisition items as possible to form one purchase order. Automatic processing of conversion of purchase requisitions to purchase orders is recommended only in the case when you have a well-maintained SAP system, else manual processing is advised.

    225. Question 225. What Is Quotation?

      Answer :

      Quotation is offered by a vendor to a purchasing organization that contains the details regarding the supply of materials or performance of services subject to specified conditions. A quotation is a legal document that binds the vendor for a certain period. The quotation is created by the vendor in response to a request for a quotation issued by a purchasing organization. A quotation consists of all the details, such as the total quantity and delivery date of a material or service offered.

    226. Question 226. What Is Request For Quotation (rfq)?

      Answer :

      A request for quotation (RFQ) is a document sent to a vendor by a purchasing organization and the vendor sends quotations with prices in response. An RFQ consists of two parts:

      •  RFQ header— Contains general information, for example, the name and address of the vendor
      •  Items — Contain information about the total quantities and delivery dates for the materials or services specified in the RFQ

    227. Question 227. How Rfqs And Quotations Are Processed In Sap?

      Answer :

      The RFQs and quotations are processed in the following manner in SAP:
      1. RFQ is created either manually or by using an already existing RFQ, requisition, or outline purchase agreement by the company.
      2. Company creates the list of vendors who are to receive the RFQ. For this purpose, a separate document is created for each vendor.
      3. Company enters the prices and conditions set out in the quotation submitted by the vendor into the RFQ document.
      4. Company carries out a comparative appraisal of all of the vendor quotations by means of the price comparison list. The quotations given by each vendor are compared item by item. The mean value quotation represents the average value of the individual quotes.
      5. Company enters the most favorable quotation in an info record and sends rejection letters to the other unsuccessful bidders.
      6. Finally, company monitors the status of follow-on activities related to the RFQ and quotation (e.g. a contract is set up or a purchase order issued).

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

      Answer :

      RFQs can be created in either of the following ways:

      •  Using manual approach — Data for an RFQ is entered manually for the materials for which you wish prices to be quoted.
      •  Using copying approach — An RFQ is copied from an existing RFQ.
      •  Using referencing approach — An RFQ is created by using reference requisitions or an outline purchase agreement.
      •  Using automatic approach — An RFQ is created automatically by using a requisition.

    229. Question 229. What Are The Rfq Types?

      Answer :

      The RFQ type is a two-character field used in the configuration of RFQ document types. It helps the company to differentiate between the different types of RFQs that they can send out.

    230. Question 230. List The Important Key Fields For Rfq?

      Answer :

      Different important key fields for RFQ are as follows:

      •  RFQ Date
      •  Quotation Deadline
      •  RFQ Document Number
      •  Organizational Data
      •  Default data for Items
      •  Collective Number
      •  Validity Start/Validity End
      •  Application By
      •  Binding Period
      •  Reference Data or RFQ Item detail
      •  RFQ Delivery Schedule
      •  Additional Data
      •  Vendor Selection

    231. Question 231. What Is Rfq Delivery Schedule?

      Answer :

      RFQ delivery schedule refers to the information entered by the purchaser that comprises date, time, and amount required on that date. You can access the delivery scheduling screen by pressing the SHIFT+F5 key combination from the keyboard in the SAP interface.

    232. Question 232. How Will You Release A Rfq?

      Answer :

      Follow this navigation path to release a RFQ: SAP Menu -> Logistics -> Materials Management->Purchasing->RFQ/Quotation->ME45-Release. A screen appears; enter all the information in the screen and the RFQ is released based on the information entered.

    233. Question 233. How Can The List Of Vendors Be Found To Send A Request For Quotation (rfq)?

      Answer :

      You can use the information record to find the list of the materials to find out the vendors from whom the goods have been purchased in the past. Thereafter, the request for purchase requisition is issued. Alternatively, you can go for a source list.

    234. Question 234. What Is The Purchasing Document Category For Rfq?

      Answer :

      The Purchasing Document Category for RFQ is the single character A, and for other documents such as for Purchase Orders, the category is F, for Contracts it is K, and for Scheduling Agreements it is L.

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

      Answer :

      The confirmation control key is used to specify whether or not a notification for shipping is expected PO item.

    236. Question 236. What Is Purchasing Document?

      Answer :

      A purchasing document is a document type used by the purchasing department to procure materials or services.

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

      Answer :

      Some of the data points provided by purchasing for the materials are Base unit of measure, purchasing group, remainder days, shipping instructions, tolerance levels, GR processing time, critical part, and JIT schedule indications.

    238. Question 238. How Does The Sap System Differentiate Between Purchasing Documents?

      Answer :

      Document type is the unit to differentiate between different kinds of purchasing documents in the SAP system. Each document consists of a unique number, which determines the significant number range and the fields that are offered to you for data maintenance purposes.

    239. Question 239. How Are Purchasing Documents Numbered?

      Answer :

      In the SAP system, each document is assigned a unique number. These numbers can be alphanumeric also. You can assign these numbers in two ways, either internally or externally, depending on the policy of your company or enterprise. An internal number depicts that the SAP system assigns the number automatically, whereas an external number depicts that the person creating the document must supply manually. Alphanumeric assignment of numbers is only possible in the latter case.

    240. Question 240. Can A Line Item In A Purchase Order Be Blocked After It Has Been Created?

      Answer :

      Yes, a line item in a purchase order can be blocked after it has been created. Blocking a line item stops acceptance of any goods receipts related to that line item.

    241. Question 241. What Are The Account Assignment Categories In A Purchase Order?

      Answer :

      SAP provides you with a number of account assignment categories that you can use for a purchase order. An account assignment category indicates the account assignment details that are required

    242. Question 242. Can Multiple Accounts Be Assigned To A Purchase Order Line?

      Answer :

      Yes, you are allowed to assign multiple accounts to one purchase order line. Multiple account assignments may be required in a situation where the cost of the item to be purchased is divided among multiple people.

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

      Answer :

      An Item Category is a field in purchase requisition that specifies the category of purchase requisition. The following are the different types of Item Categories:

      •  Blank-Standard
      •  K-Consignment
      •  L-Subcontracting
      •  S-Third party
      •  D-Service
      •  U-Stock Transfer

    244. Question 244. What Is Service Procurement?

      Answer :

      Service procurement consists of activities, such as bidding, contract management and operational procurement processes from requisition to payment.

    245. Question 245. What Is The Difference Between Procurement For Stock And Procurement For Consumption?

      Answer :

      In procurement for stock, when you order a material, the system does not require an account assignment because the posting to the appropriate stock and consumption occurs automatically every time the transaction related to goods takes place.

      In procurement for consumption, you need to enter the account assignment (such as cost center) that specifies the purpose of consumption. On the receipt of goods, the material or service is shown as it has been consumed.

    246. Question 246. What Is The Difference Between External Procurement And Internal Procurement?

      Answer :

      In the external procurement, the procurement of raw material, trading goods, and services is made from the external supplier for the organizational units of an enterprise that need such items or services.

      In the internal procurement, the procurement of raw material, trading goods, and services is made from an organizational unit of an enterprise for other organizational units of the same enterprise that needs such items or services.

    247. Question 247. What Is A Document Type?

      Answer :

      A document type is used to differentiate between different kinds of purchasing documents. In other words, different purchasing documents are distinguished on the basis of their document types. Document types are defined for RFQs, purchase orders, and contracts.

    248. Question 248. What Are The Ways Of Converting Planned Orders Into Purchase Requisitions?

      Answer :

      You can convert the Planned Orders into Purchase Requisitions either by converting them individually or by collectively converting all the planned orders.

    249. Question 249. What Transaction Code Is Used To Convert Planned Orders (po) Into Requisitions In Material Requirement Planning (mrp)?

      Answer :

      The OPPR transaction code is used to convert Planned Orders (PO) into requisitions in Material Requirement Planning (MRP).

    250. Question 250. Can You Add Custom Fields To Purchase Order(s) And Request For Quotation (s)?

      Answer :

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

    251. Question 251. How Is Framework Order Different From Standard Po?

      Answer :

      Framework Order (FO) is a purchasing document used for procuring materials or services. This type of purchase order has an extended validity period instead of a stipulated delivery date as in case of the Standard Purchase Order (PO).

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

      Answer :

      The service procurement is used by the organizations to procure the services or part of the services. It consists of activities, such as bidding, contract management, and all the activities from requisition to payment.

    253. Question 253. What Do You Mean By Using Multiple Account Assignment In A Po?

      Answer :

      Using multiple account assignment in a PO allows you to apportion the cost associated with a PO item. When you use the multiple account assignment, the account assignment data takes the form of individual account assignment items.

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

      Answer :

      In STO, UB document type is used and it also requires a supplying plant for the movement of materials, whereas in the standard PO, NB document type is used and requires a vendor for the procurement of material.

    255. Question 255. How Can We Return A Material That We Have Received With Reference To A Po?

      Answer :

      In case of external vendor, when your company returns a good, received with reference to a purchase order, the reference of the PO is not mandatory to post the return in the system. The system just posts a goods receipt correction and issues to a credit memo against the vendor. However, if the vendor is internal, you may require the reference of the PO. In this case, the system automatically updates the stock, without any internal billing.

    256. Question 256. How Are Free Items Managed In A Po?

      Answer :

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

    257. Question 257. Which Documents Are Used As References When We Create Po?

      Answer :

      At the time of creating PO, we take the reference of Purchase Requisition, Request for Quotation, and any other Purchase orders. However, it is not necessary to take the reference of these documents as most of the values are automatically taken by the SAP R/3 system.

    258. Question 258. What Is The Transaction Code To Set Price Control For Receipts (goods/invoice)?

      Answer :

      The transaction code OMW1 is used to set price control for receipts (goods/invoice).

    259. Question 259. What Is The Difference Between Quantity And Value Contracts?

      Answer :

      Quantity Contracts— When the total quantity to be ordered is known in advance during the validity period, the quality contract is used. This contract is considered as fulfilled when totaling of release orders of a given quantity has been issued.

      Value Contracts — When the total value of the release orders does not exceed a definite and predefined value, the Value contract is used. The contract is considered as fulfilled when totaling of release orders of a given value has been issued.

    260. Question 260. What Is A Centrally Agreed Contract?

      Answer :

      A centrally agreed contract type is created without specifying the name of the plant. The plant specification is provided at the time of creating the contract release order. In centrally agreed contract, different conditions for individual plants can be maintained easily. Moreover, different ordering addresses or goods suppliers in the vendor master record can also be specified in this type of centrally agreed contract. The centrally agreed contract is useful in the enterprises that have a central purchasing department and the materials are required to be bought for different plants. In this case, they create a high-level contract used by the other department-specific purchase organizations within the enterprise. The use of such centrally agreed contracts usually results in more favorable conditions of purchase and helps maintain consistency in process of purchasing throughout the enterprise.

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

      Answer :

      The important fields of a Service Master Record are as follows:

      • Service number— Defined for external or internal numbering of the service
      • Service Category— Distinguishes between the types of services
      • Descriptive text— Contains a short or long description of the service
      • Base unit of measurement— Contains the unit in which you can measure the service
      • Material/Service group— Allows the service to be selected for grouping purpose
      • Valuation class— Finds the general ledger accounts that are related with the service

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

      Answer :

      A Standard Service Catalog (SSC) is a general standardized catalog that contains the detailed explanation of services. The descriptions of these services are stored as master records and help to remove data duplication.

    263. Question 263. How Can Services Be Purchased?

      Answer :

      The services can be purchased by first creating a document in system which forms the base of the purchasing process. This document can be a purchase requisition, an RFQ, or a purchase order. Now, determine the possible sources that can provide the service. For this, you can either select a new service or a service that has been previously used. If the service is requested for the first time, a bid invitation process is started. In the bid invitation process, you first need to create an RFQ and then record the incoming quotations in it. The best quotation is determined based upon certain factors, such as price, warranty period. The order is then placed to the successful bidder who receives either a standard purchase order or a release order issued against an existing contract.

    264. Question 264. What Is A Service Entry Sheet?

      Answer :

      A service entry sheet is a transaction in which the data related to the service that has been ordered is recorded using a purchase order. You can use the ML81N transaction code to locate the service entry sheet. You can also locate the service entry sheet by using the following path: SAP menu->Logistics->Materials Management -> Service Entry Sheets Maintain.

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

      Answer :

      A purchase order that has a validity period and contains a simple process of procuring materials or services is referred as a blanket purchase order. For creating a blanket purchase order, use the ME21 or ME21N transaction code.

    266. Question 266. In What Cases Item Category M (material Unknown) And Item Category W (material Group) Can Be Used In Contract?

      Answer :

      The Item category M is used when the material issued is unknown. The item category W is used when the value and quantity of material are unknown.

    267. Question 267. How Can We Create An Sa In Sap?

      Answer :

      You can create a Scheduling Agreement (SA) in SAP either manually or by using the referencing techniques. To create a SA manually, you have to enter all the information on scheduling agreement manually. You can even use reference documents from where you will copy the information related to the scheduling agreement. These reference documents can be Purchase requisitions, Request for Quotations, and Centrally agreed Contract.

    268. Question 268. What Are Schedule Lines?

      Answer :

      Schedule Lines — The Schedule lines are generally created adjacent to the schedule agreements. For example, you have a material that is procured through a subcontract and you are required to ensure the delivery of this material on specific days. For this, you can create a schedule line for the schedule agreement of that material. In the source list of the schedule line, you have to provide information regarding the vendor and schedule agreement along with the validity dates of delivery and also specify the agreement, which is relevant for MRP.

    269. Question 269. What Is Tax Code?

      Answer :

      The tax code defines how the tax will be calculated and posted in SAP R/3 System. Each item on which the tax is applicable is allocated to a tax code. The R/3 System reads this tax code for each item and calculates tax for it. This tax and tax code is a part of Purchase order.

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

      Answer :

      Material requirement planning guarantees the procurement and production of the required quantities of materials on time. The MRP helps a company to determine which materials are to be produced and in what quantity they are to be produced.

    271. Question 271. List The Types Of Mrp?

      Answer :

      The three types of MRP are as follows:

      •  Reorder-point planning — In this type of MRP, the procurement starts when the existing stock and the receipts fall below the reorder point.
      •  Forecast-based planning — In this type of MRP, the forecast values and the future requirements of the material is decided by the forecasting program.
      •  Time-based planning— In this type of MRP, the date of the planned requirement should match with a known date, such as the date when the vendor delivers. If the vendor delivers the material on the same date, then you can start the planning procedure from that date itself.

    272. Question 272. What Is A Mrp List?

      Answer :

      The MRP list is a static list which is the initial working document for the MRP controller to start working from and contains the planning result information for a material.
      You can access the MRP list for an individual item by using the MD05 transaction code. You can also access the MRP list by using the following navigation path: SAP menu->Logistics-> Materials Management->MRP->Evaluations->MRP List - Material.

    273. Question 273. What Is The Difference Between Material Requirement Planning (mrp) And Consumption- Based Planning?

      Answer :

      MRP and Consumption-based planning are two types of SAP planning used to determine a product's requirements. When you plan materials by using MRP, you need to plan the materials requirement based on Sales and Operations Planning (SOP). When you follow the consumption-based planning approach to plan the materials, you need to plan the future demand of the product. This can be done by using the historical demand of materials.

    274. Question 274. What Important Values Are Used To Define The Reorder Point?

      Answer :

      The following important values are used to define the reorder point:

      •  Safety stock
      •  Replenishment lead time
      •  Average consumption

    275. Question 275. What Is A Procurement Proposal? What Are The Types Of Procurement Proposal?

      Answer :

      Procurement proposals are created by the system and are based on the settings defined by the purchasing department. They help in ascertaining the required materials.

      The different types of procurement proposals are:

      • Purchase requisitions: Required for a material that is procured externally.
      • Schedule lines: Required when a material is procured externally and the material has an identifiable source and scheduling agreement.
      • Planned orders: Required for materials that are procured internally.

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

      Answer :

      You need to maintain the source list and select the source list indicator record. In case of more than one source code list, one of them is fixed. You then need to run the MRP. As a result, a purchase requisition is generated with the pre-assigned list of the supply source. Lastly, the ME59 T-code is entered for automatic creation of purchase order from the purchase requisition.

    277. Question 277. What Is Forecasting In Sap System?

      Answer :

      Forecasting is a future prediction which is an uncertain process. Most business decisions are based on forecasts, such as decision of material requirements. While making business decisions, forecasts are continuously needed. The impact of the forecast on actual results is first evaluated and the initial forecasts are updated and then accordingly the decisions are modified.

    278. Question 278. Can Forecast Model Be Selected Automatically?

      Answer :

      The forecast model can be selected automatically by entering the value J in the Forecast Model field in the Material Master record where the value J is used for Automatic Model Selection.

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

      Answer :

      Forecast-based planning is a process used in consumption-based planning which depends on predictions of future requirements calculated on the basis of forecast.

    280. Question 280. What Are The Different Types Of Forecast Model?

      Answer :

      The following are the different types of forecast model:

      •  Constant
      •  Trend
      •  Seasonal
      •  Seasonal trend

    281. Question 281. Define Time-phased Planning.

      Answer :

      Time-phased planning is an MRP procedure, where materials are planned to be delivered in a particular time interval. In the time-phased planning technique, there is a planning file that contains an MRP date to plan the delivery of materials. When the material master is created and is reset for each running plan, then MRP date is set. If you need to plan the delivery of a material earlier than the specified MRP date, you can enter an MRP date while running the plan. For example, if the running plan is set to Wednesday, you can get it forwarded to Monday.

    282. Question 282. Define The Planning Process Flow.

      Answer :

      The planning process flow describes the business process and the technical system process that are involved in CBP. The system accomplishes the following partial processes in the planning run:
      1. The system first checks the planning file entries and also checks whether or not the material is changed in the planning run.
      2. The system accomplishes a net requirement calculation for every material. It checks whether, or not the requirement quantity is covered by available warehouse stock.
      3. After carrying out a net requirement calculation for every material, the system then carries out the log-sizing calculation.
      4. The scheduling is done for the start and finish dates of the procurement proposals.
      5. The system determines the type of procurement proposals and creates planned orders, purchase requisitions, or schedule lines for the materials.
      6. The system creates exception messages and accomplishes a rescheduling check to recognize critical situations of the planner that has to be processed manually in the planning results.
      7. The system also computes the actual days supply and the receipt days supply of the materials.

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

      Answer :

      The condition to create planned orders is that the system creates an internal procurement proposal and then planned orders are created. In the case of vendor procurement, a planned order is created by the MRP Controller.

    284. Question 284. What Is The Transaction Code To Convert Planned Order Into Purchase Requisition (pr)?

      Answer :

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

    285. Question 285. What Is Total Planning?

      Answer :

      The planning of all materials that are related to requirement planning is known as total planning . It includes the Bill of Material (BOM) explosion for the materials. The total planning can be used for a single plant. It can also be used to control the total planning run for multiplant. Total planning can be used in the following areas:

      • Several plant areas
      •  One MRP area
      •  Several MRP areas
      •  A combination of plants and MRP areas

    286. Question 286. Define Planning Time Fence.

      Answer :

      The fence, which protects the master plan from automatic changes in the master plan items, is called the Planning Time Fence. The system does not create or update the order proposals for the planning time fence during the planning run. It dynamically calculates the end date of the planning time fence beginning from the planning date. The planning time fence is used for materials planned in MRP, master schedule items in master production scheduling, and materials in long-term planning.

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

      Answer :

      Inventory management in SAP system helps in recording and tracking of stocks of materials. It also involves planning and documentation of all goods movements.

    288. Question 288. What Tasks Are Covered Under Inventory Management?

      Answer :

      The inventory management is an important part of the material management. The optimal inventory management not only ensures the uninterrupted supply of the material at the required time, but also prevents wastage of the items. The material management covers the following tasks:

      •  Material stock management
      •  Planning, entry and documentation of goods transfers from/to the inventory
      •  Physical stocking of items

    289. Question 289. What Is Physical Inventory?

      Answer :

      Physical inventory is a process in which all the transactions related to the movement of goods are stopped and the company physically counts inventory. It is required in financial accounting rules or for regulating taxes by placing an accurate value on the inventory.

    290. Question 290. What Are The Initial Configuration Steps For Physical Inventory?

      Answer :

      The steps for the purchase acquisition are as follows:

      •  Defining the default values for physical inventory document
      •  Reporting batch inputs
      •  Recording tolerances for physical inventory differences
      •  Inventory sampling as well as configuration of cycle counting

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

      Answer :

      The inventory management is an important constituent in the SAP MM module. The business activity of an organization revolves around the inventory of materials that serves as the input for the manufacturing process or the inventory of prepared goods for delivery or selling. The material is purchased from the concerned vendors on the basis of request from the Material Requirement Planning (MRP) module. The delivered items are recorded in the inventory management as the goods receipt. The material are then stored either for delivery to the customer or for manufacturing processes. Inventory management is integrated with other modules, such as FI, SD, PP, PS and QM.

    292. Question 292. How Is The Inventory Management Integrated With Mm?

      Answer :

      The inventory management is directly linked with the material management module because any movement of goods to/from the inventory comes under the MM module. The material requirement planning, purchasing, and invoice verification are some of the MM components that are also linked with inventory management. After the ordering of the material it is posted as a goods receipt with reference to the purchase order. The actual data of the quantities are checked in the vendor's invoice.

    293. Question 293. What Are The Initial Configuration Steps For Inventory Management?

      Answer :

      The steps for the inventory management are as follows:

      •  Defining plant parameters
      •  Defining system message attributes
      •  Defining Number Assignment
      •  Defining good issue, transfer posting, screen layout
      •  Maintaining copy rules for reference documents
      •  Setting up dynamic availability checks
      •  Confirmation of the negative items

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

      Answer :

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

    295. Question 295. Why Is Goods Receipt Important To A Company?

      Answer :

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

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

      Answer :

      If the PO number is not known, you must enter the search criteria for the PO in the initial screen. As a result, the list of purchase orders is displayed. The desired PO items can then be copied.

    297. Question 297. How Can A Goods Receipt Be Posted When Purchase Order Number Is Unknown?

      Answer :

      If the goods receipt does not have a purchase order, some companies do not accept the goods receipt and refuses to accept the delivery. On the other hand, other companies accept the delivery of materials and keep the materials into the quality or blocked stock till the situation is resolved. For obtaining the goods receipt without a purchase order number, the companies use the MIGO transaction. After entering the required details of the material, the goods receipt is posted and the material becomes a part of the plant stock.

    298. Question 298. How Do We Receive Goods From Production?

      Answer :

      The goods from the production can be posted either to the warehouse or consumption. They are posted with the same movement type.

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

      Answer :

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

    300. Question 300. What Are The Ways Of Receiving Goods?

      Answer :

      The goods can be received as per the reference to inbound delivery. The following are the different ways of receiving the goods:

      •  Order
      •  Others
      •  Outbound Delivery
      •  Purchase Order
      •  Reservation
      •  Transport
      •  Transport ID code

    301. Question 301. What Is Movement Type?

      Answer :

      While implementing the goods movement in an organization, the movement type is required to be entered. It is a three-digit identification key that is entered as per the movement type. The following are the common movement types that are used in SAP:

      •  102: Goods that are receipt against a purchase order
      •  201: Goods that are issued
      •  321: Goods released from quality inspection stock

    302. Question 302. What Does A Movement Type Control?

      Answer :

      The movement acts as a controlling factor in inventory management. It handles the following activities:

      •  Updating of quantity
      •  Updating of consumption and stock
      •  Displaying of particular fields in a document

    303. Question 303. List The Movement Types For Unplanned Goods Received?

      Answer :

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

      •  501
      •  561
      •  531

    304. Question 304. How Will An Item Be Returned To A Vendor?

      Answer :

      While posting the goods to the goods receipt in the purchase order, you need to enter the items that can be returned to the vendor. There is no need to explicitly reference the purchase order.

    305. Question 305. What Is Goods Issue Reversal?

      Answer :

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

    306. Question 306. Name The Documents That Are Created When A Goods Issue Is Posted?

      Answer :

      The following documents are created when a goods issue is posted:

      •  Material document
      •  Accounting document
      •  Goods issue slip
      •  Stock changes
      •  General ledger account changes

    307. Question 307. What Are The Different Ways Of Stock Transfer?

      Answer :

      A stock transfer can be made physically or logically. In other words, when you move material from one storage location to another it is said that the stock transfer is done physically. Whereas when you move stock from the quality inspection status to the unrestricted status, it is said that the stock transfer is done logically. The different ways of stock transfer are as follows:

      •  From storage location to storage location
      •  From plant to plant
      •  From company code to company code

    308. Question 308. What Is Transfer Posting?

      Answer :

      The physical and logical stock transfers are collectively called the transfer posting. The stock transfers typically change the stock type, batch number, or material number. The transfer posting is related to the documentation of the stock changes resulting from a stock transfer.

    309. Question 309. How Is Stock Transfer From One Storage Location To Another Done?

      Answer :

      The stock transfer from one place of location to another place of location is carried out in a plant. The posting of this kind of transfer is done without entering the value of the stock material as the management of the items is done within the same plant.

    310. Question 310. How Is Stock Transfer From One Plant To Another Plant Done?

      Answer :

      The transfer of the stock from one plant to another is a bigger activity as compared to transfers done under the same plant. The material planning as well as accounting details is affected in case of the transfer of goods within a plant. In case of plant to plant transfer, the accounting data of the two stocks is affected if they are assigned to different valuations. In other words, if there are any changes in the value of the stock items from the source plant to the destination plant, the accounting entries need to be adjusted accordingly. In this case, the stock value and G/L accounts need to be updated. The materials planning are also affected, because the stock transfer is scheduled and implemented according to the guidelines in materials planning. The plant to plant stock transfer is done by one-step or the two-step procedure but only the one-step procedure can be planned with a reservation.

    311. Question 311. How Is The Stock Transferred From Company Code To Company Code?

      Answer :

      The stock transfer between different company codes is done in a way similar to that of inter-plant transfer, but differs in the company code. During the stock transfer process, two accounting statements are created, one for removal of stock from the source company and the other for receiving in the destination company.

    312. Question 312. What Is A Stock Posting?

      Answer :

      Stock posting is defined as a transaction, which occurs when you update an item quantity in the system, for example, updating the database after goods issue or goods receipt.

    313. Question 313. What Do You Mean By Physical Inventory?

      Answer :

      Physical inventory is the recording of actual stock levels (quantities) of materials by counting, weighing, or measuring at a given storage location at a specific time.

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

      Answer :

      You need to perform the following steps to display the value of the cross-company-code stock in transit:
      Select Environment-> Stock-> Stock in transit.

    315. Question 315. What Is Returnable Transport Packaging (rtp)?

      Answer :

      Returnable transport packaging is a medium used to transport goods between vendors and customers. Once the goods are received, the returnable packaging is returned to the vendor. The best example is the crate for cold drinks; it needs to be returned back after receiving the cold drinks.

    316. Question 316. What Is Sales Order Stock?

      Answer :

      • The stocks assigned to a sales order but still available in the company premises is called the sales order stock.
      •  The raw material ordered by the customer for processing a specific order and finished goods are the type of materials that come under the category of sales order stock.

    317. Question 317. What Is Project Stock?

      Answer :

      The stock available in the company premises to execute a project is called the project stock. It is allotted to a work breakdown structure element and is specific to the project only. All accounting treatment in MM is done for the specific project head.

    318. Question 318. What Is Invoice Verification?

      Answer :

      Invoice verification is used to store details of vendor invoices and forms an important part of purchasing and inventory management. It consists of entering invoices and credit memos, checking accuracy of invoices in accordance to price, and checking block invoices.

    319. Question 319. What Are The Different Types Of Invoice Verification?

      Answer :

      The different types of invoice verification are as follows:

      •  Invoices based on purchase orders
      •  Invoices based on goods receipts
      •  Invoices without an order reference

    320. Question 320. Name The T Code For Invoice Verification?

      Answer :

      An invoice is verified by using the OLMR T code.

    321. Question 321. How Do You Perform Invoice Verification?

      Answer :

      Invoice verification is a process of checking the accuracy of an invoice in terms of the quantity, price, and other related information. The invoice can be issued for several processes. For example, if an invoice is issued for a purchase order, then the system checks for the relevant information, such as vendor, material, quantity, delivery date, and payments details.

    322. Question 322. Define Ers?

      Answer :

      ERS stands for Evaluated Receipts Settlement. It refers to the process of settling down receipts of the goods in an automatic manner. In this process, an agreement is made between the vendor and the user that vendors do not prepare any invoice for the goods ordered. Rather, the system would automatically generate and post the invoice document on the basis of purchase order and receipts of goods. In addition, ERS also offers the following advantages:

      •  Using ERS, all the purchasing transactions are quickly closed.
      •  Errors of communication are avoided.
      •  Invoice verification is not prone to price and quantity variances.

    323. Question 323. With Reference To Which Documents Can Invoice Verification Be Done?

      Answer :

      In SAP, invoice verification is done on the basis of the following:

      •  Document date, purchase order number, invoice amount, tax amount, and terms of payment(if required)
      •  Purchase order that comprises vendors, terms of payment(if required), currency , and invoice items
      •  Purchase order history that comprises quantity and amount
      •  R/3 system settings that comprise the rate at which the tax is calculated
      •  Vendor master record that comprises bank information

    324. Question 324. What Are The Benefits Of Document Parking?

      Answer :

      The benefit of document parking is that you can modify the invoice in a parked status whereas the invoice that is placed on hold cannot be modified.

    325. Question 325. How Do You Display The Parked Document?

      Answer :

      You can display the parked documents by using either FB03 or FBV3. The FB03 transaction code displays all the posted documents; whereas, the FBV3 code shows only the parked documents that have not been posted to the expenditure balance.

    326. Question 326. What Is Stochastic Block?

      Answer :

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

    327. Question 327. What Are The Different Accounts Used In Invoicing?

      Answer :

      Different accounts used in invoicing are as follows:

      • Vendor accounts
      •  Stock accounts
      •  GR/IR clearing accounts
      •  Tax account
      •  Price differences account
      •  Cash difference clearing account
      •  Freight clearing account

    328. Question 328. What Are The Different Types Of Variances In Invoices? Describe Them.

      Answer :

      The different types of variances in invoices are listed and described as follows:

      •  Quantity Variance— If there is a difference between the quantity mentioned in the invoice and the quantity delivered.
      •  Price Variance— If there is a difference between the price mentioned in the invoice and in the purchase order.
      •  Quantity and Price Variance—If there are differences in both the quantity and price.
      • Order Price Quantity Variance — If there is a difference between the price per ordered quantity, such as $50 per piece is mentioned on the purchase order but the invoice contains $60 per piece.

    329. Question 329. Why Does The Invoices Get Blocked?

      Answer :

      Invoices can be blocked due to the following reasons:

      •  Variance in the invoice item
      •  Amount of an invoice item
      •  Stochastic block
      •  Manual block

    330. Question 330. What Happens When An Invoice Is Blocked? What Are The Different Ways To Block An Invoice?

      Answer :

      When an invoice is blocked, the invoice amount cannot be paid to the vendor. Blocking an invoice also blocks the individual items. The different ways to block an invoice are listed as follows:

      •  Manual Block
      •  Stochastic or Random Block
      •  Block due to Amount of an Invoice Item
      •  Block due to Variance of an Invoice Item

    331. Question 331. How Can We Post An Invoice Directly Without Any Reference?

      Answer :

      In case of invoices posting without a reference, proposed values for the invoice items are not displayed by the system, because the system does not determine any purchase order items and posted goods receipt for the invoice. As a consequence, information related to the accounts changed by the offsetting entry for the vendor line item,is not found in the database of the system.

    332. Question 332. What Is The Menu Path To Create A Document/e-mail Notification For Your Supplier?

      Answer :

      The following is the menu path to create a document/e-mail notification for your supplier:
      Select Material Management-> Logistics Invoice Verification -> Message Determination.

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

      Answer :

      GR-based IV means Goods Receipt based Invoice Verification. In this process, each receipt of the individual goods is invoiced separately.

      On the other hand, PO-based IV means Purchase Orders based Invoice Verification. In this process, all the items that are in the purchase order list are arranged and are placed together. It is not taken into consideration whether the item is received in a single delivery or multiple deliveries. After all the items are collected, these items are then posted in the form of one single item.

    334. Question 334. How Do You Create The Vendor Account Group?

      Answer :

      Perform the following steps to create the vendor account group in SAP:
      Select Display IMG->Financial Accounting->Account Payable/Receivable->Vendor Accounts-> Master Records-> Preparation of Creating Vendor Master Records->Define Accounts Groups with Screen Layout /Define Screen Layout Per Activity.

    335. Question 335. What Is The Purpose Of Material Valuation?

      Answer :

      Material valuation in SAP MM module is necessary to determine the stock value of materials.

    336. Question 336. How To Determine Stock Value?

      Answer :

      The stock value of the materials is calculated using the following formula:
      Stock value = Stock quantity * Material price.

    337. Question 337. How Material Valuation Is Associated With Financial Accounting?

      Answer :

      Material valuation in MM module is associated with Financial Accounting as any change in the stock value also updates the G/L account in Financial Accounting.

    338. Question 338. What Are The Factors Controlling Material Valuation?

      Answer :

      The factors that control material valuation are:
      1. System settings
      2. Material master record

    339. Question 339. What Is Valuation Area?

      Answer :

      Valuation area is the organizational level at which the material valuation is carried out.

    340. Question 340. Define Valuation Class?

      Answer :

      Valuation class is a group of different materials that share some common properties. This group is defined so that you do not have to manage a separate account for each material.

    341. Question 341. What Is The Significance Of Account Assignment Category?

      Answer :

      Account assignment category determines the account assignment details that are required for the purchase order item, such as cost center or account number. It is useful in SAP MM as it helps in determining the following:
      1. The type of account assignment
      2. The accounts that will be charged when you post the invoice or goods receipt
      3. The account assignment data that you should provide

    342. Question 342. What Are The Different Types Of Account Assignment Categories?

      Answer :

      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. Question 343. What Is Lifo Valuation?

      Answer :

      LIFO is a balance sheet valuation technique. It stands for last in-first out principle, i.e. the material added to the stock in last is valuated first. In this technique, the pricing of old material in stock is not affected by the pricing of new material. In this technique, a layer of stock increased or decreased is created for a fiscal year, on the basis of which the valuation is done. For example, if the stock is increased then a layer is created for that stock. However, to use the LIFO, you have to configure it.

    344. Question 344. What Is The Release Procedure?

      Answer :

      The release procedure allows you to create condition records for the planning process. It is used to creating Purchase Requisitions (PR), Purchase Orders (PO), Request for Quotation (RFQ), Outline Agreements, and Service Entry Sheets.

    345. Question 345. What Is Release Strategy? How Many Release Points Can Be Involved In A Release Process?

      Answer :

      The release strategy specifies the release codes with which a purchase document must be released and the sequence in which the release must be used. You can define a maximum of eight release codes with their respective release strategies. You can involve 8 release points in a release process.

    346. Question 346. Can You Release The Po Item By Item When You Have A Multiline-item Po?

      Answer :

      No, you cannot release the PO item by item. PO can be released at the header level by using the with classification release procedure.

    347. Question 347. How Are The Release Procedures For Pr And Po Defined?

      Answer :

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

    348. Question 348. How To Release Blocked Purchase Documents?

      Answer :

      You can release a blocked purchase document by using your release code. This process is called the release transaction. After you have released the document, you can also cancel the document using the same release code.

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

      Answer :

      You can use the ME54N transaction code or purchase requisitions and ME29N transaction code for purchase order to reject approvals in SAP R/3. This does not affect the SAP business workflow.

    350. Question 350. How Many Procedures Are Available To Release Purchase Requisition?

      Answer :

      There are two types of procedures available to release purchase requisition:

      • With classification: In this procedure, you can release the purchase requisition both at item level and in total.
      • Without classification: In this procedure, you can release the purchase requisition only at item level.

    351. Question 351. How To Release Purchase Order? Which Transaction Code Is Used To Display As Well As Reset The Release Of Po?

      Answer :

      You can release a purchase order at header level. You cannot release a single item in purchase order. You need to release all the items at a time. The ME29N transaction code is used to display as well as reset the release of purchase order.

    352. Question 352. How Many Types Of Release Procedure Are Available For Po?

      Answer :

      There are two types of release procedures available for PO:

      • Individual release: In this type of release procedure, you can release only one item at a time.
      • Collective release: In this type of release procedure, you can release all the items at a time but using the release code.

    353. Question 353. What Is A Release Criterion?

      Answer :

      The release criterion defines the strategy with which a purchase requisition or an external purchase document is released. The release criteria contains the characteristics and the values of the characteristics which determine the status of the document, that is, either blocked or not blocked (a characteristic can be the total value of the document, say greater than $100,000). The criterion can be based on any one of the following or a combination of these:
      i. Account assignment category
      ii. Material group
      iii. Plant
      iv. Total value

    354. Question 354. What Is Release Code?

      Answer :

      The release code is a two-character field or ID that represents the person responsible for the approval of the release procedure.

    355. Question 355. What Do You Mean By Release Group?

      Answer :

      Release group is a two-digit code that is assigned with a class and contains one or more release strategies. For example, release group 01 is defined for purchase requisitions and release group 02 is defined for purchase order.

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