sap sd interview nquestation

1. Materials Management Q&A Bank
Index
Section I - General and Master Data ...............................................................................................................2
Section II - Purchasing ...................................................................................................................................6
Section III - Inventory ....................................................................................................................................9
Section IV - Valuation and Physical Inventory ............................................................................................12
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2. Materials Management Q&A Bank
Section I - General and Master Data
1. What do you mean by Plant ?
An operating unit for production and MRP or simply a grouping of one or several
locations with stocks of material (storage locations) that are geographically close to
one another.
2. At what level is the warehouse management system defined?
Storage location.
3. Can storage locations in different plants be managed under one warehouse number?
Yes
4. At what level of the organization is valuation carried out?
Either plant or company.
5. Define purchasing organization.
Organizational unit which procures materials and services and agrees on terms and
conditions of purchase with vendors.
6. How many plants can a purchasing organization service?
Multiple plants.
7. Can a purchasing organization be assigned to more than one company code? Can a
purchasing organization service more than one company code? How is this possible?
A purchasing organization can only be assigned to one company code. However, if you
would like to have a purchasing organization service more than one company code, you
simply do not assign the purchasing organization to a company code. That way, any plant
assigned to that purchasing organization, regardless of which company code the plant
belongs to, can create documents for that purchasing organization.
8. Are purchasing groups actually assigned to purchasing organizations?
No. A purchasing group is assigned to a material at the plant level.
9. Can several companies use the same chart of accounts?
Yes.
10. At what level is the standard chart of accounts defined?
Client.
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3. Materials Management Q&A Bank
11. What is a business area?
A special economic unit for which an internal balance sheet and P&L statement can be
created. A business area is defined independently of company code. You specify how you
wish the business area for each sales area to be determined - either by plant and division or
by sales area.
12. List the SAP organizational units which support the MM module. Define each and explain
their relationship with each other.
Company Code - legal entity from which financial statements are generated
Purchase organization - an organizational unit responsible for procuring materials and
services and agrees on terms and conditions of the purchases with vendor; negotiating terms
for purchases; incoterms, pricing, payment terms, etc.
Purchase group - group of employees responsible for executing the purchasing activities for
certain products and plants
Plant - An operating unit for production and MRP or simply a grouping of one or
several locations with stocks of material (storage locations) that are geographically close to
one another. Plants can be manufacturing facilities, distribution centers or warehouses.
Storage location - a subdvision of a plant, where product is stored
13. Can a plant function in SAP without a factory calendar assigned to it? Explain.
No. The factory calendar provides a holiday calendar, which days are workdays, and
company holidays. This is all used for planning purposes.
14. If PP (production planning) is used in the SAP system, at what level of the organizational
structure is the valuation level?
At the plant level.
15. Which master file is the central master file for logistics?
Material.
16. Give three examples of general material master data.
Material number, description, units of measure
17. On what is sales-specific material master data dependent?
Sales organization and distribution channel
18. What determines which material master views are available?
Material type.
19. List four types of Units of Measure found in the materials master record and define each.
Base - unit in which stocks are managed
Order - unit material is ordered in (purchasing)
Sales - unit material is sold in
Issue - unit material is issued from warehouse
Delivery - made up of a number and a unit of measure. The quantity to be delivered
should be made up of complete delivery units.
Alternative - other units of measure in which material can be sold
Minimum Order Quantity - Specification in base unit of measure
Minimum Delivery Quantity - Specification in base unit of measure
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4. Materials Management Q&A Bank
20. What determines the number assignment for a material?
Material number assignment is based on the number assignment group of the material
type. Number assignment groups give an internal &/or external range for the numbers.
21. How long is the material number field?
18 Characters
22. What does the Plant specific material status (MM/PP status in 3.0) in the purchasing view of
the material master control?
What transactions and functions can be executed for the material, for example, whether it
can be purchased, used in inventory movements, or used in a production order. Gives
warning or error.
23. Is a material master record all stored in one table?
No, many; MARA, MARC, MARD, MBEW etc.
24. .What is determined by the material type?
Which view for a material of this type can be maintained
The type of inventory management (quantity and or value)
Price control can be set as optional or mandatory
Account assignment
Which G/L accounts are posted during a goods movement
Which fields are mandatory, optional, suppressed, and display only
25. What influences field selection in the material master record?
Material type, plant, industry sector, transaction, procurement indicator
26. What three types of data can be maintained in the vendor master record?
General data, company code data, and purchasing data.
27. What are the levels at which you can maintain purchasing data in the vendor master record?
From specific to general:
Purchasing organization/Plant/VSR
Purchasing organization/VSR
Purchasing organization/Plant
Purchasing organization
28. What are the two purchasing views in the vendor master record?
Purchasing, Partner Functions.
29. What are examples of some of the partner functions that are available for the vendor master
record?
Vendor, ordering address, goods recipient, goods supplier, invoicing party, payment
recipient, and contract address.
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5. Materials Management Q&A Bank
30. What is a vendor sub-range?
A vendor sub-range (VSR) represents a vendor’s product lines. It is used to further
subdivide vendor purchasing data beyond the purchasing organization level.
31. List three examples of purchasing data on the vendor master.
Order currency, incoterms, minimum order quantity
32. What is meant by a ‘vendor supply region’ on the vendor master record? How is this used?
A vendor supply region designates the regions of a country that a vendor will supply.
The supply regions are assigned in the vendor master record at the client level. At time
of purchasing document creation, the system will check whether the receiving plant on
the document falls within the designated vendor supply regions. If it does not, the system
will issue a warning message.
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6. Materials Management Q&A Bank
Section II - Purchasing
1. Is a purchasing group assigned to a purchasing organization?
No, a purchasing group is assigned to a material in the material master record.
2. What are the six standard purchasing documents?
Purchase requisition, RFQ, Quotation, Purchase Order, Contract, Scheduling
Agreement
3. What are the two ways that a purchase requisition can be created?
Manually or automatically by MRP.
4. At what level is the release procedure applied on requisitions?
Item or document level.
5. What level is the release procedure applied on RFQs, purchase orders, and contracts?
Header level.
6. Name two things defined/controlled by the account assignment category.
The type of account assignment (asset, cost center, sales order, etc.)
Which accounts are debited at goods receipt / invoice receipt
Which account assignment data you have to enter
7. What are the two main differences between defining release procedures ‘without
classification’ and ‘with classification’?
‘Without classification’ is the method that was first available in Rel. 2.1. It allows you to
define release strategies based on value, plant, material group and account assignment
category. The without classification method can only be assigned to purchase
requisitions.
‘With classification’ is a new method as of Rel. 3.0. It allows you to define release
strategies based on any field in the purchasing document using the classification system.
Release procedures created under the ‘with classification’ method can be assigned to all
purchasing documents, including purchase requisitions, RFQs, contracts, and
scheduling agreements.
8. What is meant by a ‘release code’?
A release code is two-digit code associated with a user ID. It defines the person or
group of persons that is/are authorized to perform a release.
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7. Materials Management Q&A Bank
9. What is the objective of workflow as it applies to release procedures?
The objective of Workflow is to notify infrequent users to review/release a requisition.
10. What is the difference between an RFQ and a Quotation?
An RFQ is a document sent to a vendor by the Purchasing department to request certain
information regarding the vendors products, prices, and terms. A quotation is the
document that the vendor sends back to the purchasing department that contains specific
prices and delivery information. The quotations from different vendors can be compared
to determine which vendor is offering the best price.
11. What level are the partner functions held/ maintained at on a purchasing document?
Header level.
12. The search for vendor purchasing data for a purchasing document is carried out from
‘specific to general’. What does this mean and what are the specific priorities that the
system follows in the search?
The system first looks for data that is held at the most specific organizational level
(Purchasing Organization/VSR/Plant). If it does not find data there, it goes to a slightly
more general level to look for the data, etc. The search for purchasing data is carried
out according to the following priorities:
Purchasing Organization / Plant / VSR
Purchasing Organization / VSR
Purchasing Organization / Plant
Purchasing Organization
13. Can items on a purchase order each have different receiving plants? Can these plants
belong to different company codes?
Yes, items on a purchase order can each have different receiving plants. However,
these plants must all belong to the same company code.
14. What are the two forms of outline agreements?
Contract and scheduling agreements.
15. Name the two types of contracts.
Quantity and value.
16. What is the subsequent document for a contract?
A release order, which is actually a purchase order created with reference to the
contract.
17. What is the subsequent function that must be created for a scheduling agreement?
A delivery schedule.
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8. Materials Management Q&A Bank
18. What are the four options regarding whether a new release strategy should be applied
when a purchasing document is changed during/after the release process?
- Cannot be changed
- Changeable, no new determination of strategy
- Changeable, new release under new strategy
- Changeable, new release under new strategy or with value change
19. Explain the use of a Blanket Purchase Order?
The Blanket Purchase Order can be used where the use of individual PO is impractical
as in the case where the material received is consumed immediately. A Blanket PO does
not require Goods Receipts or entry of Service Sheets.
20. A JIT delivery schedule is also known as a Forecast delivery schedule? (T/F) Explain.
-False. Forecast delivery schedule is not a JIT delivery schedule. They are maintained
independently and communicated to the supplier based on specific time horizons.
21. What does the account group in the vendor master record determine?
What function the particular vendor is: an ordering party, goods supplier, sender of the
invoice, payment recipient. It also defines which data is required for the vendor (field
selection), number assignment, one-time account (yes/no), and it further determines
whether additional levels of data are allowed.
22. What influences field selection in the vendor master record?
The account group, transaction, purchasing organization, and company code
23. What does the partner schema (procedure) define?
Which partner roles are allowed, mandatory, or cannot be changed in a vendor master
record or purchasing document.
24. Can different partner schemas be defined for a vendor?
Yes, three different partner schemas can be assigned to an account group: one at the
purchase organization level, one at the VSR level, and one at the plant level.
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9. Materials Management Q&A Bank
Section III - Inventory
1. What is a reservation?
Reservations are requests to the warehouse to have materials ready for issue at a later
date and for a certain purpose. Materials can be reserved for sales or production.
Reservations can also be the pre-planning of a receipt.
2. For review, what is the general effect of a goods issue at a plant/warehouse?
A goods issue generally leads to a reduction in the quantity of stock at a
plant/warehouse.
3. What are the two ways in which a goods issue can be classified? Give an example of
each.
Goods issue can be classified as a planned or unplanned. An example of a planned
goods issue is delivery to a customer, return deliveries to a vendor, or staging of
materials for internal use. An example of an unplanned goods issue is an issue to scrap
or a drawing of sample quantity.
4. T/F - A goods issue can be created with reference to a material document or for a
reservation.
True - A goods issue can be created for a material document or for a reservation.
5. T/F - When creating a goods issue, the movement type for all items must be the same.
False - When creating a goods issue, the movement types can be different for each item.
6. What are the effects of posting a goods issue?
Stock quantity decreases in inventory management, consumption statistics are updated,
point of consumption is updated, G/L accounts are updated, material and accounting
documents are created, and reservations are updated (if applicable)
7. What is meant by collective entry of a goods issue?
Collective entry allows the user to create a goods issue that contains more than one line
item. Each line item can even have different account assignments (for example the
general ledger accounts for two items in a goods issue can be different). In the case of
collective entry, one material document and one accounting document is created.
8. T/F - A planned goods issue can be created with reference to a reservation.
True - Planned goods issue can be created with reference to a reservation either by
entering the reservation directly, searching for a material, or searching for the account
assignment.
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10. Materials Management Q&A Bank
9. T/F - When creating a planned issue for a reservation, you must specify a storage location
in the reservation so that the goods issue can be done.
False - You do not have to specify a storage location in the reservation; however, if you
do indicate a storage location in the reservation, you can only do a goods issue from that
storage location.
10. Negative stocks are possible for materials valuated under ____standard___ price control.
11. What is the difference between a physical transfer posting and a logical transfer posting?
Physical transfer - stock is physically moved from plant to plant or storage location to
storage location. Can be done in one or two steps.
Logical transfer - stock is not physically moved, but stock type, material number or batch
number of the material is changed.
12. What are the three levels for which physical stock transfers can be posted?
Company code to company code
Plant to Plant
Storage location to storage location
13. What is a material-to-material transfer?
A material to material transfer does not involve a physical movement. It is when a
material is moved from one material number to another. This transfer requires that both
materials are managed in the same stockkeeping unit. This material to material transfer
occurs when a material no longer corresponds to the characteristics defined in the
material master, but to those of a different material number. This is seen in the chemical
and pharmaceutical industries.
14. T/F - SAP Authorization objects in inventory management control a user or user group’s
display and maintenance capabilities for physical inventory, reservations, and goods
movements transactions.
True - This is done using authorization profile M_BEFU_ANZ for display authorizations
and profile M_BEFU_ALL for maintenance authorizations
15. In inventory management transactions, what is a dimension? Give an example.
A dimension, as used in inventory management, is a physical concept or quantity. An
example is length, time, mass, volume, etc.
16. T/F - An SI unit is a system of internationally standardized units. There can be multiple
SI units for a given dimension.
False - An SI unit is a system of internationally standardized units. However, there is a
unique SI unit for each dimension.
17. If a unit of measurement is used for purchasing transactions, it must be marked as a
________________ unit in Customizing to indicate that it is for business application.
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11. Materials Management Q&A Bank
It must be marked as a business unit in Customizing.
18. At what organizational combination level is the setting for creating a storage location
automatically set?
The setting for creating a storage location automatically is indicated for each plant and
movement type combination.
19. At what two organizational levels can settings for reservations be defined?
Settings for reservations can be defined at the plant level and the client level.
20. Identify two sub-systems, which are part of the Logistics Information System, that assist
in reporting for Materials Management.
Purchasing Information System
Inventory Controlling
21. What is a document evaluation and how is it useful in inventory management? Give 2
examples of document evaluations.
Document evaluations allow you to monitor stocks without updating statistical data.
Examples of document evaluations include: ABC Analysis, Slow-moving items, Stock
value, Dead stock, and Inventory Turnover.
22. Is it possible to have negative stocks in Release 3.0? Give an example of when negative
stocks may be necessary.
Yes, stocks of a material may have already arrived at a warehouse, but have not yet been
posted as a goods receipt. A production order or customer requires the material
urgently, so a goods issue is posted before the goods receipt. Thus, negative stocks
result.
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12. Materials Management Q&A Bank
Section IV - Valuation and Physical Inventory
1. What is the central task of material valuation?
Determine and record the stock value of a material.
2. How is the stock value of a material calculated?
By multiplying the stock quantity by the material price.
3. What is a valuation area? What two organizational levels can be used to define the
valuation area?
A valuation area is the level at which a material is valuated. It can be at the company
code or the plant level, but it must be at the plant level if the Production Planning
module is used.
4. Assuming the simplest case of a goods receipt, what two general ledger accounts are
posted to?
Debit to the stock (inventory) account - stock increases
Credit to the GR/IR Clearing Account
5. Where do you indicate what price control a material will be use?
In the material master, accounting view
6. What determines the default for the price control setting on a material master?
The material type.
7. What are the two types of price control that can be used?
S - Standard Price Control
V - Moving Average Price Control
8. Assume a material uses standard price control and the standard price designated in the
material master is $5.00/pc. If a purchase order is created for this material for a quantity
of 1 pc. at a price of $5.20/pc, what accounts will be hit after a goods receipt posting
with reference to this purchase order?
Debit to the stock account for $5.00
Credit to the GR/IR Clearing Account for $5.20
Debit to a Price Difference Account for $0.20.
Will the standard price in the material master change as a result of this posting?
No. The standard price never changes as a result of a material transaction. It must be
changed manually via the valuation menu.
Will the moving average price in the material master change as a result of this posting?
Yes, the moving average price always reflects the actual purchase price. Even if you are
using standard price control, the moving average price will be updated for
statistical (informational) purposes.
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13. Materials Management Q&A Bank
9. Assume a material uses moving average price control and the moving average price
designated in the material master is $5.00/pc. If a purchase order is created for this
material for a quantity of 1 pc. at a price of $5.20/pc, what accounts will be hit
after a goods receipt posting with reference to this purchase order?
Debit to the stock account for $5.20
Credit to the GR/IR Clearing Account for $5.20
Will the standard price in the material master change as a result of this posting?
No. There is no standard price in this case.
Will the moving average price in the material master change as a result of this posting?
Yes, the moving average price always reflects the actual purchase price.
10. What price is used to determine the amount by which the stock account should decrease
for a goods issue posting?
It depends on which price control is used for a material. If the material uses standard
price control, the stock account will decrease by standard price amount in the material
master record. If the material uses moving average price control, the stock account will
decrease by the moving average price amount in the material master record.
11. What is created when you change the valuation price of a material?
An accounting document is created (revaluation document) to indicate that the value of
the stock has changed.
12. What is meant by split valuation? Why might you want to use split-valuation for a
material?
Split valuation is the process of valuating different stocks of the same material
differently within a valuation area. Split valuation may be necessary because for
example, certain stocks of the same material may have a different cost price due to
different origins, levels of quality, or statuses.
13. What is the valuation category?
The valuation category specifies which criterion should be used as the basis for
differentiating between sub-stocks of a material. For example, a valuation category may
be ‘origin’ or ‘status’. It determines which valuation types are allowed. A material is
assigned to a valuation category in the material master record at the plant level.
14. What is the valuation type?
The valuation type is the key that identifies the characteristics or name of a sub-stock.
15. If you are using split valuation, what type of price control must be used at the valuation
area level?
Moving average price control must be used at the valuation area level so that the
valuation price of the material can reflect the average price of the sub-stocks.
16. What are the four physical inventory procedures supported by SAP?
Periodic, Continuous, Cycle Counting, Sampling
17. What three stock types can a physical inventory be carried out for?
Unrestricted, Quality Inspection, Blocked Stock
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14. Materials Management Q&A Bank
18. What are the major steps in the physical inventory process?
1 Create Physical Inventory Doc, 2 Perform physical inventory, 3 Enter Count, and 4
Either post differences, change count, or arrange for recount
19. If the ‘blocking indicator’ is set in the physical inventory document, what must occur for
this indicator to be automatically removed.
The indicator is removed when the physical inventory counts are posted.
20. What three methods does SAP support for stock valuation?
Lowest Value, LIFO, FIFO
21. What is the purpose of a valuation grouping code?
The valuation grouping code is a key that is used to group together valuation areas that
should be treated the same in terms of account assignment. The valuation grouping
code, along with other keys, designates which G/L accounts should be hit after a goods
movement &/or invoice posting. It allows for less data maintenance because you will
not have to maintain an individual table entry for each valuation area.
22. True/False - Different material types can be managed under the same G/L account.
True.
23. What serves as the link between material type and the allowed valuation classes?
The account category reference.
24. Where do you assign a material to a valuation class?
In the material master record, accounting view.
25. What determines what transaction keys are possible for a given movement type?
The value string.
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