1. What are the types of special stocks available?

Subcontracting, consignment, pipeline, project, sales order, RTP, stock transfer, third party.

2. What are the types of info records?

Standard, consignment, subcontracting & pipeline.

3. What is meant by consignment stock?

In consignment processing, the vendor provides materials and stores them on your premises. The vendor
remains the legal owner of the material until you withdraw materials from the consignment stores. Only
then does the vendor require payment. The invoice is due at set periods of time, for example, monthly.

4. What are the steps involved in consignment cycle?

Create consignment info record with proper tax code (ME11), Create PO with item category K, Goods
Receipt done with movement type 101K, Create transfer posting with the movt type 411k i.e.,
consignment stock to own stock, Issued with movement type 201K, No invoice verification done, but
settlement is done through MRKO transaction.

5. Tell me about the subcontracting cycle.

The PO is created with item category L, the goods is transferred to subcontractor by 541 movement. for
this movement note no accounting docs take place. When GR is done 543 movement type takes place
automatically which take care of the consumption of components from stock.

6. How can we see the stock of material provided to SC Vendor?

We can see the stock with Subcontractor using Transaction MBLB.

7. How is the scrap taken care of in subcontracting?

In the BOM we have +/- sign where we can scrap the BOM components.

8. What is concept of automatic PO and what settings are required to create automatic PO?
Automatic PO indicator must be set in purchasing view of material master record
Automatic PO indicator must be set in purchasing data of vendor master record
There must be an outline agreement or info record must be maintained for the material and vendor. This is
required to determine the material price and conditions.

9. What is the difference between a foreign PO and normal PO? What settings we do for it?
In foreign PO a tab page import data will be there. But we have to make some settings in IMG to have
this tab page. IMG path is MM→Purchasing→Foreign trade/customs→Control foreign trade data in MM
and SD documents→Import screens in purchasing documents
We can use 1 – call up import data screen for every import
Many settings are available in foreign trade/customs for Import PO’s.

10. What is Blanket purchase order? Give a brief of the blanket PO cycle.
Blanket PO is created for low value items to reduce the processing costs.
Blanket PO is created with document type FO (Framework order), validity fields appear in header and
enter the validity period. Use item category B (Limit) and account assignment category. We get a limit
tab page where we have to enter overall limit and expected value. The overall limit is the maximum value
for which invoices referring the PO can be posted. The expected value is the end value of the order.
No need to enter order quantity or net price in item overview. System will take expected value as the net
price.

11. How can we block a material for procurement?

In purchasing view of material master we have a field ‘Plant specific material status” which must be set to
01Blocked for procurement/whse. Once this field is set to 01 we cannot create purchase orders for this
material any more.

12. I want to have the system post a material to inspection stock by default when we receive the
material in MIGO. How can we do that?
In purchasing view we have to check post to inspection stock to have this.

13. How are free items managed in a PO?

We need to tick the item as free in the PO. The price will be zero for such PO's.

14. What is meant by scales?

Can scales be used in standard purchase order?
We can fix a price in the info record for a say qty from 1-100 price RS150 & if the order qty is 101- 500-
the prices is 140. Scales cannot be used directly in PO but can be pulled into the PO from various master
data like info record, quota arrangement etc.

15. What is the difference between a contract and a scheduling agreement?

With regard to Outline Agreement:
1. You can create the centrally contract (cross-plant) where you can maintain different pricing conditions
for each and every plant
2. You have to create the Release Order with reference to Outline Agreement.
3. No detailed delivery schedule can be made in the Release Order.
4. No Release documentation is created.
5. Only time-dependent conditions can be created.
6. Some Item Category 'M' and 'W' can be used.

With regard to Scheduling Agreement:

1. The Plant Location must be entered in the Scheduling Agreement.
2. We do not have to create any other purchasing document except for delivery schedule line via
Transaction ME38 or MRP running (with the appropriate setting of Source List).
3. Delivery Schedule line items are created subject to our specific requirement.
4. Can create both Scheduling Agreement with and without Release Documentation (subject to the
Document Type LP or LPA) with the selection of either FRC or JIT delivery schedule.
5. Either time-dependent or time-independent conditions can be created subject to the customizing in the
Document Type of the Scheduling Agreement.
6. Item Category 'M' and 'W' cannot be used.

16. What is meant by batches? How can the batches be searched?

A batch is a subdivision of your stock of a material having the same characteristics.
For instance:
- food production uses batches to indicate the day of production.
- Paint production uses batches based on production date and the used ingredients. It is very hard to
reproduce the same color in exactly the same way at two different moments.
- Ore may be divided in batches based on their mineral content.

17. What are the settings required for quota arrangement?

To set up a quota arrangement for the procurement of a material, proceed as follows:
Master data -> Quota arrangement -> Maintain, enter the material and plant number, press ENTER to
display the overview screen for the quota arrangement periods, Enter a validity period for quota
arrangement, Enter date until which the quota arrangement is valid. The start date is calculated by the
system. Press ENTER.
Select the quota arrangement and choose Goto -> Item overview to display the item overview screen of
the quota arrangement. Enter a quota arrangement item for each source of supply we want to include in
the quota arrangement.
We must enter the following data.
- Procurement type
- Special procurement type, Enter k in the S column, for example, if a consignment arrangement for the
material exists with the vendor.
- Vendor number
- Procurement plant (supplying plant):
- Quota column, enter the quota assigned to each item.
Press ENTER.
The percentage distribution of the quotas is calculated and displayed automatically by the system.
Save the quota arrangement. The system assigns a number to the quota arrangement item automatically

18. What MRP procedures are available?

Main are consumption based planning and MRP
In consumption based planning we have the following
a. Re-order point planning (manual and automatic re-order point planning)
b. Forecast based planning
c. Time phased planning

19. What is meant by MRP Type and lot sizing?

The MRP type is a key that controls the MRP procedure to be used for planning a material. The MRP
type controls which planning parameters can be entered when maintaining material master record.
The following are important MRP types.
VB = Manual reorder point planning
VM = Automatic reorder point planning
V1= Automatic reorder point planning including external requirements
V2= Automatic reorder point planning without external requirements
VV= Forecast based planning
ND= No planning
PD= MRP

20. What is reorder point planning?

During reorder point planning, the system checks whether the stock available for MRP (sum of plant
stock and fixed receipts) falls short of the reorder point determined for the material in the master record.
If the available stock falls short of the reorder point, procurement must be initiated.

21. In material planning how does the system determine procurement quantity?
It depends on the lot sizing procedure used in material master record.
We use three type of lot sizing procedures
Static lot-sizing procedures
Periodic lot-sizing procedures
Optimum lot-sizing procedures.
In static lot-sizing procedures, the system does not consider future shortages; so if it determines
shortages, the system creates an order proposal for the quantity of the static lot size.
If you have specified that the exact lot size (lot-for-lot order quantity) is to be used, the system uses the
exact shortage quantity as the order quantity if there is a material shortfall.
If you have specified that the fixed lot size is to be used, the system uses the fixed lot size as the order
quantity if there is a material shortfall.
22. What is stock/requirements list and MRP list ?
The MRP list shows the result of the last planning run and is therefore static: Changes made after the
planning run are not visible. This is a static list.
Stock/requirements list shows the present stock and requirement situation of a material. Each time the list
is set up, the system reimports and displays the various MRP elements.. This is a dynamic list.

23. What are the differences between release procedure with classification and release procedure
without classification? When are they used?
Release procedure without classification is used for item level release only and hence can be used for
releasing Purchase requisitions only.
Release procedure with classification can be used for both item level & header level release (overall
release). Hence it can be used for releasing both Purchase requisitions and external purchasing
documents. External purchasing documents can be released at header level only.

24. How to create PR or PO by MRP?

The PR is created according to the safety stock mentioned for the material or can be triggered from a
requirement. For creating a PO, we need to have the scheduling agreement in place .After the MRP is run
the schedule lines are generated which are nothing but the PO.

25. Is it possible to have a release procedure without classification for a PO?

As per release procedure without classification the document can be released at item level. Since external
purchasing documents cannot be released at item level we can’t use it for PO.

26. What is the maximum number of levels available in SAP?

8 release codes

27. What are the steps in creating a release procedure?

1. Create characteristics
More details: Communication structure CEBAN has all the fields which can be taken as release
characteristics for Purchase requisitions and communication structure CEKKO has all the fields which
can be taken as release characteristics for external purchasing documents. While creating the
characteristic in additional data tab page we must link the database table CEBAN (for PR) or CEKKO
(for Ext purchasing documents) with field name of the characteristic.
2. Create a class and assign the characteristics to the class (class type must be 032)
3. Create a release group and assign it to the class. The class has already characteristics assigned to it and
these characteristics act as release conditions.
4. Create release codes and assign to release group
5. Define the release indicators like blocked and released
6. Specify the release prerequisites showing the order in which the release codes will release the
document.
7. Define the release statuses. Here we define the release status a document has after a certain release
code has released the document.
8. In classification we will maintain the values (individual values or intervals) for the characteristics.
Example: We have created a release strategy “EA” and have two characteristics and values as below
Characteristic Value
Document type NB
Total value $20000
Now all POs with the document type 'NB' and a total value in excess of $20,000 are thus subject to a
release procedure with the release strategy 'EA'.
Release simulation
The release simulation function enables us to check which status a PO will achieve with our release
strategy if release is affected by a certain release point.

28. At what level the release strategy is configured? Client level or Company code level?
Release strategy is configured at client level. Company code or plant can be made as characteristics and
used in the release procedure.

29. Is it possible to have scales in a quotation?

No

30. What is GR blocked stock? When it can be used?

Whenever we are not sure about the quality of the product received, we can put it in GR blocked stock.

31. Give a brief of pricing procedure in MM?

First create the
1. Access sequence
2. Condition type
3. Calculation schema (Pricing schema) and create the schema groups vendor and schema group
purchasing organization
1. Assign schema group purchasing organization with purchasing organization
2. Assign schema group vendor with vendor master record and this both schema groups are assigned with
pricing procedure.
When we create a PO we enter Vendor at top and purchasing organization at header level. Since we have
already assigned schema group vendor with vendor master record and also assigned both schema groups
with pricing procedure we get the condition types and system will give price.

32. What are manual conditions and automatic conditions in purchasing?

PBXX is manual condition used in PO and PB00 is automatic condition used in quotations, contracts and
info records.
PBXX has no access sequence assigned to it and hence price has to be entered manually. PB00 has access
sequence 0002 assigned to it and will search for valid condition records and pick a price from them. If no
valid condition records exist then we have to use PBXX and enter price manually.
If we go to control data of Pricing procedure RM0000, we find that the condition PB00 has step 1 and
counter 1 and condition PBXX has step1 and counter 2.

33. What is Gross price, net price and effective price?

Gross price
Price without taking any other conditions (such as discounts/surcharges or delivery costs) into account
(vendor's net price)
Net price
Price taking discounts and surcharges into account (vendor's gross price excluding delivery costs)
Effective price
Net price less cash discount and including miscellaneous provisions, delivery costs, and non-deductible
tax

34. What is the significance of material type?

Whether the material is configurable material or process material
Whether the material number can be assigned internally or externally
The number range from which the material number is taken
Which screens appear and in what sequence
Which departmental data you may enter
What procurement type the material has; that is, whether it is manufactured in-house or procured
externally, or both
Together with the plant, the material type determines the material's inventory management requirement;
that is:
Whether changes in quantity are updated in the material master record
Whether changes in value are also updated in the stock accounts in financial accounting

35. How do you configure material master?

a. Specify structure of data screens
A data screen is composed of many sub screens. Here we can remove any sub screens which we do not
want.
b. Make a screen sequence
c. Specify the order of mail and additional screens
d. Specify user settings for maintenance of material master records
Here we can specify a particular user group as default value

36. How do you configure vendor master?

Here we make the following settings
Account groups for vendors
Field selection
Number assignment
Partner roles (like order recipient, goods supplier, invoicing party, payee)

37. What does the account group in vendor master record determine?
Type of number assignment
Number range
Partner roles allowed
Type of use of master record ie vendor or one time vendor
Field status

38. What is the significance of Document type?

Item number interval
This determines the size of the steps between the default item numbers.
Number range intervals
These specify the number ranges for internal or external number assignment.
If you only want to allow internal number assignment, you may not enter any external number range
interval.
Field selection key
This determines which attributes the fields of the document are to have for the document type in question.
You maintain the field attributes in Customizing for the relevant document in Define Screen Layout at
Document Level.

39. What is stock transfer and transfer postings?

In Transfer postings we just change the stock category of the material and in stock transfer there is
physical movement of stock from one place to another.
Examples of transfer postings:
Stock to stock (for example, in quality inspection to unrestricted-use) or material to material
Examples of stock transfers:
Storage location to storage location, plant to plant

40. What is material to material transfer posting? Which transaction is used to do transfer posting?
If the state of a material changes over time, for example, so that instead of the properties defined in the
original material master record it now has those corresponding to another material number, a material-to-
material transfer becomes necessary. This is often the case in the chemical and pharmaceutical
industries.
We do transfer posting using MIGO
Ex: Material KA01 (New chemical) is transferred to KA02 (Old chemical)

41. In case of stock transfer from storage location to storage location in one step what documents
are created?
Only material document with two material document items is created.
One item for the removal of the material from storage (goods issue) at the issuing storage location
One item for the placement of the material in storage (goods receipt) at the receiving storage location
An accounting document is not generated for this stock transfer because the transferred material is
managed in the same plant.
Note: If stock is transferred from one storage location to another, an accounting document is generated if
the material is split-valuated and the valuation type changes in the course of the transfer.

42. In case of stock transfer from storage location to storage location in two steps what documents
are created?
In the course of a stock transfer from storage location to storage location using the two-step procedure,
two material documents are generated: one at the time of goods issue (in this case referred to as removal
from storage), and a second at the time of goods receipt (in this case referred to as placement in storage).
Valuation does not take place in the case of the two-step procedure.
An accounting document is not generated for this stock transfer because the transferred material is
managed in the same plant.

43. What are the options available for transferring materials from plant to plant?
A number of procedures are available to enable you to transfer materials from one plant to another:
Stock Transfer Between Plants in One Step
Transaction code: MB1B
Movement type 301

Stock Transfer Between Plants in Two Steps

Transaction code: MB1B
Goods issue movement type: 303
Goods Receipt: 305

Stock Transport Order Without Delivery

Order type: UB
Goods issue: 351
Goods Receipt: 101

Stock Transport Order with Delivery via Shipping

Order type: UB
Goods issue: 641
Goods Receipt: 101

Stock Transport Order with Delivery and Billing Document/Invoice

Order type: UB
Goods issue: 643
Goods Receipt: 101
44. What are the documents created during stock transfer from plant to plant?
If the two plants are in same company code
Material document is created. Accounting document is also created as two plants are assigned to different
valuation areas.
If the two plants are in different company code
Material document is created and two accounting documents are created. One accounting document for
removal from storage at the issuing plant of issuing company code and other for placing into storage at
the receiving plant of company code.

45. What about the damages during stock transfer?

They are scrapped

46. When do we use the option of one step procedure and two step procedure?
One step procedure is used if the two plants are in same building or one plant is a virtual plant only. Two
step procedure is used if the two plants are in different locations and material has to be transported from
one plant to another plant.

Transaction to Create Stock Transport Order

T. Code: ME21N or ME27
Transaction to create Creating Outbound Delivery
If the stock of material is available in Supplying Plant then Supplying Plant will create a delivery against
the above Stock Transport Order.
SAP menu> Logistics> Sales and Distribution> Shipping and Transportation> Outbound Delivery>
Create> Collective Processing of Documents Due for Delivery>Purchase Orders
T. Code: VL10B
Goods receipt for stock transport order
T. Code: MIGO

47. What are the advantages of the Stock Transport Order

It has the following advantages over the transfer of stock without a stock transport order:
A goods receipt can be planned in the receiving plant.
A vendor can be entered in the stock transport order.
Delivery costs can be entered in the stock transport order.
The stock transfer order is part of MRP
The goods issue is possible via a delivery or via Shipping.
The goods receipt can be posted directly to consumption.
The entire process can be monitored via the purchase order history.

48. When we post a goods receipt which account postings will take place?
Stock account, GR/IR clearing account and price difference account

49. When we post a invoice which account postings will take place?
Stock account, GR/IR clearing account, price difference account, vendor reconciliation account (160000)
and input tax.

50. What are the account movements if we use moving average price for materials?
Stock account and GR/IR clearing account

51. What are the account movements if we use standard price for materials?
Stock account, GR/IR clearing account, income from price differences, expenditure from price
differences

52. What is valuation grouping code?

It is key for account determination that enables differentiation for G/L account assignment based on
valuation area.
By activating or deactivating valuation grouping code we can turn on or off the dependency of account
determination on valuation area.

53. What is valuation class?

It is key for Account determination that enables differentiation for G/L account assignment based on
material. We assign a valuation class for a material in accounting view.

54. What is account category reference

The account category reference is the grouping term for account determination depending on the material
type.
Several valuation classes can be assigned to an account category reference. Each material type (for which
quantity- and value-based inventory management has been defined) is assigned to an account category
reference.
The relationship between valuation classes and material types is established with the aid of the account
category reference. The account category reference is a grouping of valuation classes used by the system
to check whether the valuation class entered is allowed when we maintain accounting data in the material
master record. This account category reference is assigned to the material types. Only one account
category reference can be assigned to a material type.

55. How is MM linked toFI

Main screen of FI-MM integration is OMWB
Here if we click account assignment we will be in transaction OBYC where we can see the various
transaction/event keys. If we double click on any of the transaction/event keys, we can see that valuation
grouping code is assigned to valuation class and G/L Account number.
If we click simulation we can see how the movement types are linked to G/L Accounts.
The important transaction/event keys are
BSX- Inventory account
GBB- Offsetting entry for inventory account (consumption account)
WRX- GR/IR clearing account

56. In a typical MM transaction how does the system hit particular G/L Accounts?
The main point is linking G/L Accounts to chart of accounts.
It depends on five factors.
1. Chart of accounts of company code
2. Valuation area (plant or company code). Valuation grouping code if many valuation areas are
clubbed to a valuation grouping code.
3. Material/material type (valuation class)
4. Transaction / event key
5. Movement type
Step1: Define valuation control. Here we decide if valuation level is plant or company code
Step 2: Group together valuation areas by valuation grouping code
Step 3: Establish link between material and valuation class. We will assign account category reference for
material type. In the accounting 1 view of material master record we are assigning valuation class.
Step 3; In OBYC the transaction/event keys are linked to G/L account thru valuation grouping code and
valuation class. Whenever there is any material receipt or issue we use movement type and the movement
type is linked to transaction/event key thru value string which is a standard sap setting. Since the
transaction/event key is linked to G/L account in OBYC, the system will hit the appropriate G/L account.

57. How is MM and SD linked?

Whenever we create a delivery with reference to a sales order, goods movement takes place. In case of
standard sales order, we create an outbound goods delivery to the customer.
Here movement 601 takes place. This movement is configured in MM. Also, this movement hits some
G/L account in FI. Every such movement of goods hits some G/L account.

58. How to give specifications for developments?

We normally prepare a business requirement document in which we specify what is required. What field
& tables have to be referred for the required development.

59. What are the various phases in a typical SAP implementation project?
A: There are 5 phases in a SAP implementation project.
1. Project preparation
Here we do the following
a. Define your project goals and objectives
b. Clarify the scope of your implementation
c. Define your project schedule, budget plan, and implementation sequence
d. Establish the project organization and relevant committees and assign resources
2. Business Blueprint
In this phase we create a blueprint using the Question & Answer database (Q&Adb), which
documents the enterprise’s requirements and establishes how the business processes and
organizational structure can be mapped in the SAP System.
3. Realization
 In this phase, we configure the requirements contained in the Business Blueprint. Baseline
configuration (major scope) is followed by final configuration (remaining scope). Other key focal
areas of this phase are conducting module testing, integration tests and preparing end user
documentation and training materials.
4. Final preparation
In this phase we complete the preparations, including testing, end user training, data uploading
and cutover activities. We also need to resolve all open issues in this phase. At this stage we need
to ensure that all the prerequisites for the system to go live have been fulfilled.
5. Go live and support
In this phase we move from a pre-production environment to the live system. The most important
elements include setting up production support, monitoring system transactions, and optimizing
overall system performance.

Some important transactions in MM

ME51N – Purchase requisition create
ME52N
ME53N

ME21N – Purchase order create

ME22N
ME23N

ME31K – Create contract

ME32K
ME33K

ME31L – Create scheduling agreement

ME32L
ME33L

ME41 – Create RFQ

ME42
ME43
ME47 – Maintain quotation

XK01 – Create vendor

XK02
XK03

ME11 – Create info record

ME12
ME13

MMBE – Stock overview

MBLB – Stock with sub contractor

MRRL – Evaluated receipt settlement

MI01 – Create physical inventory document
MI02
MI03

MI04 – Enter inventory count

MI05 – Change inventory count
MI06 – Display inventory count

MI07 – Post difference

MD03 – Planning run single item, single level

MD04 – Stock/requirements list

MD05 – MRP list