SAP MM Interview Questions and Answers
Part I: Conceptual
Questions
Question 1: What MRP procedures are available in MM-CBP (Consumption Based Planning)?
A: 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.
Question 2: Under what conditions are “planned orders” created? What may planned orders be converted to and how is that conversion accomplished?
A: 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.
Question 3: What are the organizational levels of the Enterprise Structure in R/3? A: 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.
Question 4: What are the different ways to organize purchasing organizations?
A: 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.
Question 5: What are “Special Stocks”?
A: 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.
Question 6: What are some of the options available to transfer materials from one plant to another?
A: 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.
Question 7: What are some of the common Stock Transport Order Movement Types?
A: 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.
Question 8: What is the difference between a Purchase Order and a Purchase Requisition? A: 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.
Question 9: What is an “indirectly created” Purchase Requisition?
A: 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.
Question 10: What is an RFQ and how is it different from the Quotation Form?
A: 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.
Question 11: What are the transactions that will result in a change of stock?
A: 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.
Question 12: When would it be prudent to post goods movements via the Shipping Application?
A: 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.
Question 1: What MRP procedures are available in MM-CBP (Consumption Based Planning)?
A: 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.
Question 2: Under what conditions are “planned orders” created? What may planned orders be converted to and how is that conversion accomplished?
A: 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.
Question 3: What are the organizational levels of the Enterprise Structure in R/3? A: 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.
Question 4: What are the different ways to organize purchasing organizations?
A: 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.
Question 5: What are “Special Stocks”?
A: 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.
Question 6: What are some of the options available to transfer materials from one plant to another?
A: 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.
Question 7: What are some of the common Stock Transport Order Movement Types?
A: 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.
Question 8: What is the difference between a Purchase Order and a Purchase Requisition? A: 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.
Question 9: What is an “indirectly created” Purchase Requisition?
A: 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.
Question 10: What is an RFQ and how is it different from the Quotation Form?
A: 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.
Question 11: What are the transactions that will result in a change of stock?
A: 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.
Question 12: When would it be prudent to post goods movements via the Shipping Application?
A: 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.
Question 13: What is a Reservation?
A: 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.
Question 14: Can you manually generate a Purchase Requisition referencing a Purchase Order or a Scheduling Agreement?
A: 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.
Question 15: How is GR/IR account related to Inventory? _
A: 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.
Question 16: How do planned and unplanned consumption affect Movement Types?
A: 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.
Question 17: What are Departmental Views?
A: 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.
Question 18: Is Material Data valid for all organizational levels?
A: 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.).
Question 19: Why would you want to create physical inventory sheets to perform an inventory cycle-count on a material or materials?
A: 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.
Question 20: What is the difference between a Blanket Purchase Order and the Framework Order?
A: 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.
Question 21: What is Release Procedure?
A: 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.
Question 22: If you have a multi-lineitem PO, can you release the PO item by item?
A: 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.
Question 23: What is a Material Type?
A: 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.
Question 24: What is a price comparison?
A: Perform a price comparison using ME49 and one may compare quotations from different vendors.
Question 25: What is a Source List?
A: 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.
Question 26: What are the various “steps” in the MM Cycle from material creation through invoice?
A: 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.
Question 27: Give some examples of the information relating to a material’s storage/warehousing?
A: 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.
Question 28: What are the various features of Consignment Stocks?
A: 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
