SAP: “System, Applications and Products in Data Processing ”

SAP R3 Architecture:-

SAP R/3 is one of the main product of SAP,where R stands for RealTime and the
number 3 relates to three tier application architecture(Data base,Application Server
and Client). Most of the business in todays world runs on SAP R/3 system.About
80% of the companies implemented this software.

Puchasing Organization:-
Purchase Organization is the highest level of organizational unit in SAP
MM, it is responsible for procurement of materials and services from an
external vendor or internal plant.

The different types of purchasing organizations in SAP are

▪ Plant specific or local purchase organization

▪ Cross plant purchase organization
▪ Cross company code purchase organization
▪ Central purchase organization at company code level.
▪ Reference Purchase organization
▪ Standard purchase organization

Storage Location:-
Storage locations are the places where stock is physically kept within a plant.
They are also used to define an organizational unit that allows the differentiation of
material stocks within a plant. All data referring to a particular storage
location is stored at storage location level.

purchasing group:-
A purchasing group is a unit of a purchasing organization which is
responsible for day to day certain buying activities and control a particular type of
procurement activity based on some classification.

Material Master :-
The material master is the central source of information for a material related to
several application area (Purchasing, storage, accounting, sales, etc) based
on material type.
 Vendor Master Data:-
Vendor Master Data is the enterprise main source of vendor-specific data. It
includes information on vendors from which a company can procure, or can sell.
A vendor master record contains information such as vendor's name, address, etc.

source list:-
To identify sources of supply for materials a source list is used.

Purchasing info record:-

Purchasing info record stores information on material and vendor,
supplying that material. For example, a vendor's current price of a particular material
is stored in info record. Purchase info record can be maintained at the plant level
or at the purchasing organization level.

P2P proces:-
P2P connects procurement through to payment of goods. The purchase to
pay process, also known as the P2P process, connects the procurement and entire
supply chain processes within a company through the goods receipt process, and
finally to the payment issued to the vendor.

Purchase Requisition:-
Purchase requisition (PR) is an internal request to purchasing. You ask the
buyer to provide a certain quantity of a material or service on a certain date.
A purchase requisition can be created automatically by Material Requirement
Planning (MRP) or manually created.

OR
A purchase requisition is a request that is made to the purchasing organization to
procure a certain list of materials.

purchase order :-
A purchase order is a formal request or instruction from
a purchasing organization to a vendor or a plant to supply or provide a certain
quantity of goods or services at or by a certain point in time.

Request for Quotation:-

1. Request for quotation is a form of invitation that is sent to the vendors to submit a
quotation indicating their pricing and terms and conditions.

2. It contains details about goods or services, quantity, date of delivery, and date of bid
on which it is to be submitted.
Contract:-
A contract is a longer-term agreement with a vendor (one of the two forms of
“outline agreement” in the SAP system) to supply a material or provide a service for
a certain period of time. ... These are specified subsequently in release orders
issued against the contract when customer requires them.
Value contract:- A value contract is a legal agreement with a customer that
contains the materials and services that the customer receives within a specified time period,
and for a value up to a specified target value.
Quantity contract:-In a quantity contract, the purchasing buyer defines the
target quantity (total quantity for the whole term of the contract) and unit price

Scheduling Agreement:-
Scheduling Agreement (SAP Library - Purchasing (MM-PUR)) A form of outline
purchase agreement under which materials are procured on predetermined dates
within a certain time period. A scheduling agreement consists of a number of items,
for each of which a procurement type is defined.

collective number:-
A collective number is required in transaction ME41 for almost every business.
While creating a request for quotation (RFQ), you have to add the collective
number manually. You can get multiple quotations against one purchase request
(PR) from different vendors.

Goods Receipt:-
A goods receipt is the physical inbound movement of goods. It is a goods
movement that is used to post goods received from external vendors or from in-plant
production.

OR

GR stands for Goods receipt, in sales perspective, when the customer returns the
goods because of any reason, you need to receive the goods in to your storage
location.

Goods Issue:-
GI stands for Goods Issue, means when you do any sale, the goods will be
issued from the warehouse to the customer.

Subcontracting:-
Subcontracting cycle is a process where the customer engages a contractor to
make a sub-assembly.
Returnable transport packaging (RTP) :-
Returnable transport packaging (RTP) is a multi-trip packaging medium (for
example, pallets or containers) in which goods can be transported more than once
between vendors and customers.

split valuation:-
Material valuation helps in determining the price of the material, and in which
general ledger account it needs to be posted. ... Material can be valuated based on
different types of procurement; it is known as split valuation.

Pricing procedure:-
Pricing procedure in MM module is a way to determine prices in purchasing
documents.

Auto PO:-
Means creation of Purchase Order Automatically in SAP while doing the
Goods Receipt. Business Requirement is the possibility of receiving the materials for
which there is no purchase order in the system.

Physical inventory:-

Physical inventory is a process of determining that the inventory quantities

are exact, or if there are differences in quantity mentioned physically present and
that mentioned in the SAP system.

Quota Arrangement.:-
Quota arrangement divides the total requirement of material among certain
sources of supply, i.e. vendors, and then assigns a quota to each source.

LSMW:-
LSMW stands for legacy system migration workbench and it is a special form
of data migration that is used in SAP, to transfer data from legacy systems and to
the SAP system.

Service Master:-
Service master record contains the details of all the services that can be
procured from an external vendor within an organization.
Release procedure:-
Releasing a purchasing document means approving it. Important information
to know is that a purchasing document cannot be changed after it is released.

Account Determination:-
Account Determination. Advertisements. In SAP MM, procurement process
involves the cost of goods and services that needs to be paid to the vendor by an
organization. The cost being paid must be posted in an organization necessarily in a correct
general ledger (G/L) account

General ledger account :-

General ledger account an account that is updated each time a user posts a
financial transaction in SAP system. These accounts are used to come up with
financial statements for internal and external reporting.

valuation class:-
The valuation class is a group of materials with the same account
determination. If a transaction is to be posted to different accounts depending on
the valuation class,