1. What is the difference between a Purchase Requisition and a Purchase Order?

A PR is an internal document that sends  notification to purchase department when

some material is service is required. PR can be generated by department that needs any
material or service.

A PO is a document sent to vendor by purchaser which is an official request of mentioned

material or services. POs are generally binding on purchaser, though it depends on terms
and conditions mentioned in PO.

2. What MRP procedures are available in MM-CBP (Consumption Based Planning)?

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

3. Can you change a Purchase Requisition after it has been created?

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

4. How do we create Consignment Stocks?

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

5. What is Vendor Evaluation and how do you maintain it?

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

6. What are the components of the Master Data that details a company’s procurement;

used by, Vendor Evaluation for example?

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).

7. How do we get a proper list of vendors to send an RFQ?

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

8. How do you create a Source List?

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

9. What are different Info Records types?

Different Info Record types are Standard, Consignment, Sub-Contracting and Pipeline.

10. Under what conditions are “planned orders” created? What may planned orders be

converted to and how is that conversion accomplished?

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

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11. What is a consignment Stock?

The stock supplied by the vendor is in the purchasing company’s premises but the
company has no liability for the same. The liability for the company will only arise one the
goods are issued from the consignment stock for use. However, in this case, even before
the use, purchasing company can check in system how much stock is lying in inventory.

12. What is Sub-Contracting cycle in MM?

In Sub-contracting, we send raw material or input material to sub-contractor and then
receive the finished goods. A sub-contracting PO is created with item category ‘L’. Input
material is sent to vendor for processing with movement type 541. When GR is done using
movement type 101, movement type 543 takes place automatically and takes care of
consumed material.

13. What is meant by Scales in MM?

When we maintain price in Info Records, we can make use of scales. It is used when price
of a material is dependent on quantity purchased. For eg. For 500 pieces of material ABC,
price is Rs. 10, however, if the order quantity is more than 500, price is Rs. 9. Scales are
maintained in various master data like info record, quota arrangement etc. from where
scales can be pulled in a Purchase Order.
14. How to Flag a material for deletion?
A material must be flagged for deletion before deleting it using Archive and Delete
program. A deletion flag can be set at client level, plant level or storage location level.
Whatever level you flag a material for deletion, it is flagged for deletion at all
corresponding lower levels. Transaction MM06 is used to flag a material for deletion.

15. Can a material be used after flagging it for deletion?

Yes, even after flagging a material for deletion, it can be used till it is actually deleted. It
will just trigger a warning message whenever the material is used. If you want a material
to be blocked for any use with immediate effect, you should use a material status which
is there in Basic View 1 for general level or in MRP 1 view for plant level blocking.

16. What is the function of OBYC?

OBYC is t-code used for configuring Automatic Account Posting.

Postings are made to G/L accounts automatically in the case of Inventory Management
and Invoice Verification relevant to Financial and Cost Accounting.

17. What is valuation grouping code related to OBYC?

Valuation grouping code is used to group the valuation area, In SAP, we can have
valuation level at Company code level or at plant level.

General practice is to use the valuation area at plant level, because valuation may differ
from one plant to another. The valuation grouping code makes it easier to set automatic
account determination. If we need to define common account determination for several
valuation areas, we can assign same valuation grouping code to all those valuation areas.
We can maintain the valuation group code in OMWD for various valuation areas.

18. What types of special stocks are available?

pecial stock types available in SAP are Consignment, Subcontracting, pipeline, project,
sales order stock, Returnable transport packaging, stock transfer, and the third party.

19. What is the difference between Contracts and Scheduling Agreements?

A contract is a pre-determined long term agreement to supply material or service for a
certain period of time. Specific delivery dates are not mentioned in the contracts.
Contracts can be of two types: Value Contract or Quantity contract

In Scheduling agreements, we can enter scheduling lines which gives details of quantity
that should be delivered on specific date. Plant must be entered in SA so that materials
can be delivered at plant. These are generally used for materials whose requirements are
predictable.

20. How can we create new transaction codes in SAP?

New transaction codes can be created using t-code SE93.

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21. What are release procedures with and without classification?

Release Strategy with Classification:
 PR can be released at header level as well as item level.

 It can be used for both internal/external documents.

 Can be set on any field available in structure CEBAN

Release Strategy without Classification:
 PR can be released only at item level.

 It can be used only for internal documents such as PR.

 This strategy can be used only on 4 parameters which are Account assignment category, Plant,

Material Group and value of PR.

22. What is meant by batches?

A batch is a subset of the total stock of a material. It represents a homogeneous unit
which has unique specification. Normally, a batch is assigned to the quantity of material
produced during a given production run. A batch number uniqueness can be assigned at
any of the following 3 levels:

At client level: The same batch number can be assigned only once within the entire
client.

At material and plant combination level: Same batch number can be assigned to material
with different specification in each plant.

At material number level: A batch assigned to a material has the same specification for
all plants where material is extended. Batch number can be reassigned with a different
specification for each material.

23. How to handle free items in PO?

While creating PO, we can tick the item as free item in item overview section of PO. The
price will be zero for free marked item.

24. What information is maintained in Accounting View of material master?

Accounting view is a plant specific view. Besides other information, it contains important
information such as valuation class and price control. Valuation class helps in
determining the relevant GL account used for account posting. It is also used while
configuring OBYC settings. Price control indicator determines if material is maintained at
Standard price(S) or Moving average price (V).

25. What is the use of Material types?

‘Material Types’ is used to group various materials based on some common properties. It
helps in maintain material master data for a particular material. Using material types, we
can control which all views are required for a material type, which fields are required or
optional, the material number range etc.

26. If you have a multi-lineitem PO, can you release the PO item by item?
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

27. What is a Material Type?

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

28. What is a price comparison?

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

29. What is a Source List?

The Source List identifies preferred sources of supply for certain materials. If it’s been
maintained, it will ID 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 proffered source during the source determination process.

30. What are the various “steps” in the MM Cycle from material creation through invoice?
The following creates a rough picture of the MM Cycle. Create material, create vendor,
assign material to vendor, procure raw material through PR, locate vendor for certain
material, processing GR, goods issue, and invoice verification.

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31. Give some examples of the information relating to a material’s storage/warehousing?

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.
32. What are the various features of Consignment Stocks?
Consignment Stocks remain the legal property of the Vendor until the organization
withdraws the material from the consignment stores. The invoice can be due at set
periods of time, for example monthly, and it is also a configuration possibility that the
organization will take ownership of the stock after a certain period of time. Consignment
Stock is allocated to the available stock because the Consignment Stock is managed
under the same material number as your company’s stock. The most important
characteristic of Consignment Stock is that it isn’t valuated. When the material is
withdrawn, it is valuated at the price of the respective vendor. Before procuring the
stock, consideration should be given if one consignment is coming from multiple vendors.
If so, we can manage all of them independently at the price of the individual vendors.

33. What is a Quotation?

Once a vendor has received an RFQ, the vendor will send back a quote that will be legally
binding for a certain period of time. Specifically, a Quotation is an offer by a vendor to a
purchasing organization regarding the supply of material(s) or performance of service(s)
subject to specified conditions.

34. What is the Source List?

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

35. What is an Invoice Verification?

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

36. What are the different types of Invoice Verification?

Invoices based on Purchase Orders. With purchase-order-based Invoice Verification, all of
the items of a purchase order can be settled together, regardless of whether or not an
item has been received in several partial deliveries. All of the deliveries are totaled and
posted as one item. Invoices based on Goods Receipts. With goods receipt-based Invoice
Verification, each individual goods receipt is invoiced separately. Invoices without an
order reference. When there is no reference to a PO, it is possible to post the transaction
directly to a Material Account, a G/L Account, or an Asset Account. You can park Invoices
that reference POs and GRs as well as Invoices with no reference in the system. When
you park a document or change a parked document, neither substitution nor validation is
supported.

36. Why would an organization need to allow Negative Stocks?

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

37. What is the use of ‘Partner Functions’ for a vendor?

Partner Function is used to define responsibilities and duties of other business partners.
Some partner functions are AZ(Alternate payee), CR(Carrier), OA(Ordering address),
GS(Goods supplier), PI(Invoice presented by) etc.

38. What is the use of ‘Material Status’?

Material Status helps in determining the usability of a material. It is a 2-digit code which
can be maintained as plant specific material status, cross-plant material status, and
distribution material status.

39. What is the ‘Price Control Indicator’?

Price Control Indicator’ is maintained in accounting view and is used to determine how a
material will be valuated. It can be Standard Price(S) or Moving Average Price(V). If the
indicator is set to S, all inventory postings are posted at standard price maintained in
material master. If there are variances in any transaction due to different price, the
variance is posted in price difference account.

If price control indicator is set at V, goods received will be done at GR price. The moving
average price will be adjusted in material master using weighted average formula. If
goods movements or invoice receipts are posted using a price that differs from the
moving average price, the differences are posted to the stock account.

40. What are various types of Stock transfer?

The physical movement of stock between different physical locations is called as ‘Stock
transfer’. Stock transfer can be either a single step process or a two-step process.

Various Stock transfers are:

Inter Company (Company to Company)

Inter Plant/Intra Company (Plant to Plant)

Intra Plant (Storage location to Storage location)

41. What are various Stock Types?
In SAP, commonly used stock types are:

Unrestricted Stock (Stock that is available for use)

Restricted Stock

Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)

Blocked Stock (Stock rejected by quality or production)

GR Blocked Stock (Conditionally accepted stock. Not the unrestricted stock)

42. What are various procedures for counting Physical Inventory?

Physical Inventory procedures in SAP MM are as follows:

Periodic Inventory (All stocks are counted on a pre-determined date)

Continuous Inventory (stocks are counted continuously during the entire fiscal year)

Cycle Counting (Counting is done at fixed intervals)

Inventory Sampling (Randomly selected material stocks are physically counted on the
balance sheet key date. If variances are small enough, it is presumed that the book
inventory balances for the other stocks are correct.)

43. What is the use of ‘Split Valuation’?

Within a valuation area, sometimes, we need to valuate various stocks of a material
separately. It can be because of different origin, quality, status, etc. We use split
valuation in such cases. In this case, material is managed at several partial stocks which
are sub-stocks of main material stock. Any transaction, relevant for valuation, is carried
at this partial stock level. In accounting view, we define if we need split valuation for any
material.

44. What are the various stock valuation methods?

Stock revaluation can be done by following three methods:

LIFO(Last In First Out): Materials received last are consumed first. You can assume
example of elevator where people who enter last exit first!

FIFO(First In Firs Out): Materials received first are consumed first.

Lowest Value Method: Stocks are valued at their original price or the current market price
whichever is lower.

42. What are the organizational levels of the Enterprise Structure in R/3?
The top level of the organizational plan is the Client, followed by Company Code, which
represents a unit with its own accounting, balance, P&L, and possibly identity
(subsidiary). The next level 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.

43. How do you set ‘Automatic Account Assignment’ in MM?

Once OBYC settings are properly done, system finds the correct G/L account using the
following data:

Chart of Accounts: Chart of Accounts is determined based on plant or company code used
in transaction

Valuation Grouping Code: It is determined based on the valuation area. Valuation

Grouping Code is maintained in t-code OMWD.

Transaction Key: eg. BSX, GBB etc. Transaction keys are determined automatically from
the transaction (invoice verification) or the movement type (inventory management).

Account grouping /Account Modifier (only for offsetting entries, consignment liabilities,
and price differences)

Valuation class of material or (in case of split valuation) the valuation type: The valuation
class allows you to define automatic account determination that is dependent on the
material. This can be achieved by assigning different valuation classes to the materials in
material master (Accounting view) and by assigning different G/L accounts to the posting
transaction for every valuation class.

45. What is ‘Transaction Keys’ while setting OBYC?

Since each movement type is assigned to a ‘value string’ which in turn is identified with a
transaction key, the goods movement determines the correct transaction key. Transaction
Keys’ are pre-defined in the system to enable transaction postings in Inventory
Management and Accounting (Invoice Verification).

Examples of pre-defined transaction keys are:

BSX (Inventory Postings)

WRX (GR/IR Clearing Postings)

PRD (Cost/Price differences)

UMB (Revenue/Expenses from revaluation)

GBB (Offsetting entries in Stock postings)

BSX, WRX, and PRD are relevant for a GR with reference to a purchase order for a
material with standard price control. The transaction key UMB is used when the standard
price has changed and the movement is posted to a previous period. GBB is used to
identify the GL account to post to as the offsetting entry to the stock account (when not
referencing a purchase order) such as miscellaneous goods receipts, goods issues for
sales orders with no account assignment, and scrapping etc.

46. What is a Business Area?

The business area is an organizational unit within financial accounting. It corresponds to
a defined business segment or area of responsibility, to which value movements recorded
in Financial Accounting can be assigned. It is usually derived automatically as it linked to
other organizational units. For eg. Business area for a combination of plant and division is
maintained by t-code OMJ7.

47. What is a Cost Center?

Cost Center accounting is used for controlling purposes. It is an organizational unit within
a controlling area which represents a defined location of cost incurrence. For example,
any department can be a cost center for recording all expenses incurred for that
department.

48. What is a Profit Center?

Profit Center Accounting evaluates the profit or loss of individual, independent areas
within an organization. Profit center is an organizational unit in controlling to recognize
your profit. Profit center is attached to material master at plant level.

49. How to create Tax calculation procedure in MM?

Tax can be calculated for each line item of a PO separately based on the tax code. Earlier
TAXINJ, which is a formula based tax procedure, was used. Now, TAXINN, which is a
condition based tax procedure, is generally used. Tax procedure contains the condition
type and necessary specification for each condition type. Account keys are assigned to
condition types and these account keys determine the G/L to which the tax amount is to
be posted(OB40). These account keys are maintained using t-code OBCN. (All these
transactions are under Financial Accounting Global Settings Tax on Sales/Purchases
Basic Settings). Tax codes are assigned to country codes and country are linked with tax
procedure. Thus, based on tax code, corresponding tax procedure is determined and then
calculation is done based on condition types in that tax procedure.

50. How is scrap material taken care of in sub-contracting?

Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or
Co-Product. Common practice is to maintain scrap as by-product and receive it back
along with processed material.

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51. How are the by-products taken care of in sub-contracting?

When you create BOM using CS01, we can maintain main components with + ve
quantities and By Products / Scraps with – ve quantities.

When you make Goods Receipt for Subcontracting Purchase Order with 101 movement
type, components are automatically consumed with movement type 543 By Products /
Scrap are updated as stock provided to vendor movement type 545. Now we can receive
this scrap/ By product back in company’s inventory using movement type 542 (reversal of
541) with t-code MB1B.

52. What are the commonly used movement types in Sub-Contracting process?
541 – Issues of goods from warehouse to subcontractoru2019s stock

542 – Reversals of goods issues from warehouse to subcontractoru2019s stock

543 – Consumption from subcontracting stock (Automatic updating during GR)

544- Co-products receiving

545- Goods receipt of by-products from subcontracting (Stock provided to vendor)

101 – Finished good/ Sub-Contracted good received after processing

53. What are accounting entries in standard sub-contracting process?

Accounting entries in standard sub-contracting process are as follows:

For finished goods received:

Debit stock account of assembly(FG) (BSX)

Credit Change in Stock (BSV)

For amount payable to vendor:

Debit SC/JW charges (FRL)

Credit GR/IR (WRX)

For material provided to vendor:

Debit Consumption Account of components (GBB-VBO)

Credit Stock account of components (BSX)

If there is a price difference and customization is done for accounting for price difference
in subcontracting, PRD transaction key comes in picture.

54. What are the possible values of procurement type in Material Master?
Procurement type is maintained in MRP1 view of material master. This is a plant specific
view as MRP is done at plant level. Various procurement types in material master are as
follows:

In-house production (E)

External procurement (F)

No procurement

Both Procurement types (X)

55. What are the requirements for an ‘MRP Run’?

MRP should be activated in that plant

Master Data for MRP should be maintained (Planning Calendar etc.)

MRP data for material should be maintained

MRP1 view should be maintained (e.g.. Reorder point, Safety stock etc.)

MRP2 view should be maintained (e.g.. Plan delivery time etc.)

MRP can be run using MD03

56. What is a MRP Area?

MRP Area is an organizational unit for which material requirement planning can be
carried out independently. MRP Areas are of three types:

Plant MRP Area

MRP Areas for Storage Locations

MRP Areas for Subcontractors

After defining MRP areas, MRP area is assigned to material in material master.

57. What is MRP list?

The system creates MRP lists during the planning run. The MRP list always displays the
future stock/requirements situation at the time of the last planning run. The MRP list is
stored in the system until it is either deleted manually or replaced by a new list from a
subsequent planning run.

58. How will items be returned to the vendor?

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

59. Where do you perform a Goods Issue?

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”.

60. How do you perform a Goods Issue?

Use Transaction MIGO. On the initial screen, enter the header data (you need not enter
the Movement Type or the Plant as these are automatically copied from the order).
Choose Goods Issue Æ Create with Reference Æ 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.

61. How do you perform an Invoice Verification?

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

62. How do you display parked documents?

There are two possible transactions to use here. They are FB03 and FBV3. The first shows
all posted document types. This is the best choice if you think the document has been
posted to you actual balance. The later shows only parked documents that have not yet
posted to your expenditure balance. These documents are still encumbrances. It is the
best choice if you are trying to find which documents are still awaiting completion or
approval. This transaction is very similar to the FBV2 transaction used with P-Card
reconciliation and marking parked documents complete.
63. What do the W, V, and F fields show about the status of a document in FBV3?
An X under the W column means the document is subject to Workflow. Most documents on
this screen should have an X in this column. However, not all documents are subject to
workflow (cash deposits etc.). An X in the V column means that the document has been
marked as complete. If they are subject to Workflow, they have been sent to Workflow for
approval when they were marked complete. An X in the F column means that the
document has been approved and posted to expenditures. This column will always be
empty in this screen. An X under W, but no X under V means that you have not marked the
document as complete. If it hasn’t been marked as complete, use FBV2 to check the
document and, if it is correct, mark it as complete.

64. What MRP procedures in Consumption Based Planning?

MRP procedures in CBP are as follows:

Reorder Point Procedure

Forecast based Planning

Time phased material planning

65. What is the difference between standard purchasing organization and reference

purchasing organization?
Purchasing organization is an organizational unit within Logistics. A standard purchasing
organization must be provided to one or more plants for which it is directly responsible
for procurements.

A purchasing organization is assigned to reference purchase organization to avail

conditions and centrally agreed contracts or release orders contained in the assigned
reference purchasing organization

66. Why do we use document types in SAP?

Document types are used to distinguish the business transactions to be posted. It also
helps in determining the account types to be posted and subsequent transactions to
complete the process. Document types are defined at client level.

67. Can we receive the goods before the scheduled delivery date in scheduling agreement?
No, we cannot receive the goods before scheduled delivery date. GR can be posted on or
after the scheduled dates. Though, SAP has provided some OSS notes to resolve this.
(708973, 741385)
68. Can changes be made in PO once it is released?
This can be controlled by settings given in release indicator in PO release procedure. If it
is a significant change, it will re-trigger approval cycle.

What is the use of ‘Info Update’ indicator in purchasing documents?

This indicator is used to decide if the info record is to be created/updated or not based on
this purchasing document.

69. What is a Material Ledger?

A material ledger retains all transactions that relate to the purchase and use of materials
for producing goods. Material ledger data is valuation and control data for a material in a
plant for a specific posting period. Material ledger contains data for material movements
that are relevant to the valuation of the material.

70. What is a ‘Return Delivery’?

Return Delivery is used if we want to return goods to a vendor for any reason such as bad
quality, or bad packaging etc. In normal cases, return delivery is done by movement type
122. For creating return delivery, reason for return is a mandatory field.

71. How to deactivate a vendor so that it cannot be used for further transactions?
A vendor can be blocked at various levels as follows:

All Company Code

Single Company Code

All Purchasing Organization

Single Purchasing Organization

72. What is EAN?

An article can be carried in different units of measure. An European article number (EAN)
is created as a unique indicator for each of these units of measure. The most important
use of EANs within a company is to identify articles at the point of sale (POS) using the
barcode.

73. What are basic tables used for Material Master?

Some of the basic tables used in Material master are:

MAKT: Material Descriptions

MARA: General Material Data

MARD: Storage Location Data for Material

MVER: Material Consumption

MARC: Plant Data for Material

MVKE: Sales Data for Material

MAST: Material to BOM link

74. What are the different ways to organize purchasing organizations?

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

75. What are “Special Stocks”?

Special Stocks are stocks that are accounted for but are not owned by the client, or are
not stored at a regular facility. Consignment, sales order, and project stock are examples.

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

77. What are some of the common Stock Transport Order Movement Types?
One step transfers of materials can be posted using MT 301. Other various transport
scenarios differ in the MTs by the Goods Issues and Good Receipts. Common Goods
Issues may use MTs 303, 351, 641, or 643 in the STO. A STOs Good Receipt often uses MT
101.

78. What is the difference between a Purchase Order and a Purchase Requisition?
A Purchase Requisition is a document type that gives notification of a need for materials
or services. A Purchase Order is a document type that is a formal request for materials or
services from an outside vendor or plant. Procurement types may be defined at the line
item and can be standard, subcontracting, consignment, stock transfer, or an external
service.
79. What is an “indirectly created” Purchase Requisition?
An indirectly created Purchase Requisition has been initiated by CBP, the PS Project
System, PM Maintenance, and Service Management, or PP Production Planning and
Control. The “directly created” Purchase Requisition, on the other hand, is created by a
person manually in the requesting department specifying what materials/services, units,
and a delivery date.

80. What is an RFQ and how is it different from the Quotation Form?
A RFQ is a purchasing document and an invitation to a vender(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.

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81. What are the transactions that will result in a change of stock?
A Goods Receipt is a posting acknowledging the arrival of materials from a vendor or
production, which results in an increase in warehouse stock, a Goods Issue which results
in a reduction in stock, or a Stock Transfer moving materials from one location to another.

82. When would it be prudent to post goods movements via the Shipping Application?
If picking, packing, and transportation operations need to be planned in detail. Also, in
shipping, you can manage movements like returns from customers, vendors, and returns
to stock. Movement Types in shipping start with a 6.

83. What is a Reservation?

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

84. Can you manually generate a Purchase Requisition referencing a Purchase Order or a

Scheduling Agreement?

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

85. How is GR/IR account related to Inventory?

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

86. How do planned and unplanned consumption affect Movement Types?

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

87. What are Departmental Views?

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

88. Is Material Data valid for all organizational levels?

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

89. Why would you want to create physical inventory sheets to perform an inventory cycle-

count on a material or materials?

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

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

91. What is Release Procedure?

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

92. How do you create a movement type? When will movement type numbers be odd?
When prompted by a dialog box after an activity, you copy a movement type. Select the
field “Movement Type” and “Continue”. In the Define Work area, enter the movement type
to be copied in From: and the name your new movement type in the To: field. Now choose
Continue. Choose the desired movement type you want then choose Edit ÆCopy as and
re-type the selected movement type with the new type copy all dependent entries and
make sure to begin with a proper prefix (9,X,Z). All control indicators are copied to the
new movement type. Review the new movement type changing any necessary controls.
Reversal movement types are numbered as the number type plus one. The reversal for
movement type 451 (Returns From Customer) is 452. As a last step before saving your
settings, add a copy the reversal movement type and enter it in Reversal/follow-on
movement types.

93. How do you adopt standard settings for the Message Determination Facility In MM-PUR?
The Message Determination Facility is by default active and message determination
schema is supplied for all purchasing documents including POs, PRs, RFQs etc. All of the
desired message types must be maintained. Choose Master data Æ Messages Æ
Purchasing document Æ Create or Change from the Purchasing menu. Add the message
type and pick the key combination. The key combination decides the condition table
where the condition record is stored. Enter all needed items. Next screen, create the
individual condition records. Using the menu options Goto Æ Means of Communication,
enter the proper peripheral, or output for each message record. Save.

94. How do you set price control for receipts (goods/invoice) telling the system how to value

stocks?
Transaction Code OMW1 allows you to set price control to S (Standard Price) or V (Moving
Average Price). 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.

95. How do you access the Materials Management Configuration Menu?

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

96. How are the various MM configuration Transactions accessed?

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

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

98. Can you add custom fields to POs and RFQs?

Yes. You must add custom fields to the customer including structures I_EKKODB and
I_EKPODB. Create a project via CMOD for enhancement MM06E005. Follow the
documentation for MM06E005, and create the sub-screens for function group XM06 using
transaction SE80. Add fields to the appropriate screen. It is recommended that you call
the screen fields EKPO_CI-name or EKKO_CI-name. This simplifies transferring data
to/from the screen. Put code in EXIT_SAPMM06E_018 to transfer data from subscreen to
structure E_CI_EKPO. Put code in EXIT_SAPMM06E_016 to transfer data from database to
sub-screen using structure I_CI_EKPO. In the PBO of the sub-screen, do any processing to
make fields display only, or hide them.
99. When can a Production Resource/Tool be defined as a material?
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.

100. When creating a new Material, what may prompt some of the possible Material Types?
Pressing F4 gives a list of choices. Select the material type for the material you are
creating. For example, FHMI for Prod. Resources/tools, ROH for Raw Materials, FERT for
Finished Products, etc.

101. How do you create a Vendor?

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

102. How are materials assigned to vendors?

Information Record links materials to the vendor, thus facilitating the process of
selecting quotations. Use Transaction Code ME11 or Logistics Æ Material Management Æ
Purchasing and then Master Data Æ Info Record Æ Create.

103. What data does the Information Record contain?

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.

104. How do you create the Information Record based on the Material Master record?
In the IMG, Master Data Æ Info Record Æ Create. Enter Vendor Number, Material Number,
Purchasing Organization or Plant Number. Enter the number of the Information Record if
external number assignments are used (left blank, the system will assign a number).
Enter the General Data for the Vendor, order unit, origin data, and supply option, Customs
Tariff Number. Next, enter the Vendor’s planned delivery time (used for scheduling),
responsible Purchasing Group, and Standard PO quantity (used in conjunction with price
scales for price determination). Check the Control Data. The tolerance data and the
responsible purchasing group are taken as default values from the Material Master
record. Enter the net price. Now, from the top of the screen Go To Æ Texts to display the
text overview. You can enter the info memo or the PO text. If the PO text is already
defined in the Material Master record, it appears as a default value. Save the record

105. What is the difference between a PR with a Master Record and without a Master Record

for the material being ordered?

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