Interview Questions on SAP MM-1

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 and pipeline.

3. What is meant by consignment stock?

The stock supplied by the vendor is in the companies premises with the company having no liability
for the same. The liability for the company will only be affected when the goods are issued from
the consignment stock for use.

4. What are the steps involved in consignment cycle?

Create consignment info record with proper tax code, create Po with item category K, maintain
output condition record for KONS, process GR, 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 automatically,
543 movement takes place which take care of the consumption of components from stock.

6. How are the byproducts taken care of in subcontracting?

You can add these by products in the BOM for the header material

7. What is meant by scales?

Can scales be used in standard purchase order? You 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.

8. 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 your 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' can not be used.

9. How does the system calculate taxes?

10. How does the system calculate nondeductible taxes?

11. 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.

You can search batches using the standard search facility (match code, key F4) based on the naming
convention of the batches or, if you use batch classification, based on the characteristics of the
batches.

12. How is a shelf-life item managed in SAP? What is the full cycle?
13. 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 you want to
include in the quota arrangement.
You 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

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

15. Can it be configured in such a way that the external requisitions can also be taken into
account while MRP runs in consumption-based planning if VB is selected as MRP type?
16. How are free items managed in a PO? yu need to tick the tem as free in the PO. The
price will be zero for such PO's.

17. What are the differences between release procedure with classification and release
procedure without classification? When are they used?
Release procedure with classification means the Purchase requisition can be released both at item
level & at the header level. Release procedure with out classification can also be used for PR which
is used for item level release only. all other external documents cannot be released with
classification. The two procedures are mutually exclusive (that is to say, you must decide in favor of
one of them only - you cannot use both).

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

No

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

Did not get this question …pls clarify.

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

No

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

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

22. How are the variations in subcontracting taken care of in SAP?

23. 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.

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, you need to have the scheduling agreement in place .After
the MRP is run the schedule lines are generated which are nothing but the PO.

Interview Questions on SAP MM-2

1. In which of the following cases can you define scales for the condition type
a. Purchase order
b. Contract
c. Info record
d. Vendor
e. Quotation
f. Scheduling agreement
2. What is meant by one-time vendor?
You can create special master records for vendors from whom you only procure a material once or
very rarely. These are called one-time vendor master records and, in contrast to other master
records, you can use a vendor master record for several vendors. Therefore, no vendor-specific
 data is stored for one-time vendors. You can control this using the relevant field selection for
account groups for one-time vendors. When you create a purchasing or accounting document using a
one-time vendor, the system automatically branches to an additional data screen on which you enter
specific data, such as the vendor’s name, address, or bank details. If an RFQ or a PO is sent to a
one-time vendor, the vendor data must be entered manually.
3. How do you control the use of Valuation class per material Type?
a. By valuation category
b. By Account group
c. By Account assignment Category
d. By Material Group
valuation category Criterion for the separate valuation of different stocks of a material managed
under a single material number.
Reasons for "split valuation" may include:
Quality
Batch
Degree of purity
Use or non-use in promotions
Account group Attributes which determine the creation of master records. The account group
determines:
The data that is relevant for the master record
                                     A number range from which numbers are selected for the master records. An
account group must be assigned to each master record. Account assignment Category Consumable
materials debit different account assignment objects depending on the account assignment
category specified. The account assignment category determines which category of account
assignment is to be debited and which account assignment data you have to prepare. Examples of
account assignment categories include:
Asset
Cost center
Cost object
G/L account
4. With which master data the account group is used
a. Vendor master
b. Material Master
c. Info record
d. Outline agreement
5. What determines whether a material can be posted to a stock?
a. Material type
b. Material group
c. Material Status
d. MRP controllers
MRP controllers The person responsible for a group of materials within MRP in a plant or company.
Any material that takes part in material requirements planning must be assigned to an MRP
controller.
Material Status Indicator in a material master record that restricts the usability of a material. You
can restrict the usability of a material for certain functions, for example, by assigning it the status
"test part." Tables are used to define how the system is to respond in individual applications, for
 example, with an error message or a warning, in the case of unpermitted use of a material. You can
define the material status for all plants (basic data view), or separately for each plant (plant view).
6. What does the account assignment category U stands for? When can we use this account
assignment category ?
If you do not know the account assignment object for which the consumable material is being
procured when the requirement coverage request is created, you can use account assignment
category U in the purchase requisition. The system does not require any further details about the
account assignment for the relevant item in the purchase requisition.
7. What is the purpose of Collective number in RFQ?
You can link a number of RFQs that belong together with the help of the collective number. The
collective number can have a maximum of ten characters and can be alphanumeric.
8. What is release order? What is the difference between the release order and Purchase
order?
A release order is a purchase order that references a contract. Contracts are outline agreements.
They do not contain details of the delivery dates for each of the items. To inform vendors of which
quantities you need for which date, you enter contract release orders for a contract.
9. What is distributed contract and Centralized Contract
Distributed contracts are centrally agreed contracts that are created in one R/3 system and made
available to other R/3 systems for the issue of release orders. They are distinguished from normal
contracts by the use of a separate agreement type.
Items of a Centralized contract do not relate to just one specific receiving plant.
10. At which Organization levels is info record kept
a. P. org level
b. Plant
c. Company code
d. Client
11. What are the preconditions for automatically generated delivery schedule lines?
A particular advantage of working with scheduling agreements is that delivery schedule lines can be
generated automatically by the MRP system provided that certain prerequisites are fulfilled:
-->The scheduling agreement must be uniquely defined as the source of supply
-->Automatically generated schedule lines must be allowed via the source list (MRP indicator 2)
-->Automatically generated schedule lines must be allowed in the MRP system
12. When do normally use Account assignment category K? And why?
K (cost center). When procuring consumable materials.
13. At which level Purchase requisitions are released
Purchase Organization
14. At which level Purchase orders are released
Purchase Organization
15. What is item category and give some two examples
The item category defines the process used to procure a material or service.
Standard: You use this item category for materials that are procured externally.
Subcontracting: The finished product is ordered from a vendor. The components that the vendor
needs to manufacture the finished product are entered as „material to be provided “ items.
Consignment: The vendor makes material available, which you then manage as consignment stock. A
liability only arises when material is withdrawn from consignment stock, not when the stock is
placed in the consignment stores.
 Stock transport orders: The material is transferred from one plant to another.
Third-party order: You order material from a vendor with the instruction that the vendor should
deliver the goods direct to a third party (a customer, for example). The vendor sends your company
the material invoice.
16. What are release codes in release procedure?
Two-character identifier with which a person responsible for processing a document can release
(approve) an item of a purchase requisition, a complete purchase requisition, or a complete external
purchasing document, or cancel such release (that is, revoke a previously granted approval). If a link
to SAP Business Workflow has been defined for the release code, the person involved can also
refuse to effect release (withhold approval), thus rejecting the relevant item or document.
17. For a normal PO briefly explain the determination of Release Strategy
The release conditions (or criteria) determine which release strategy applies. To be able to work
with the release procedure with classification, you must create a release class with characteristics
in addition to making the other Customizing settings. You set up a release class with characteristics
via the classification system.
The communication structures CEBAN (for purchase requisitions) and CEKKO (for external
purchasing documents) contain all the fields that can be defined as release characteristics.
All release conditions must be defined as classification characteristics. Part of the characteristic
definition is a link to a field of the communication structures CEBAN or CEKKO
You group together all characteristics that you wish to use in release strategies for purchase
requisitions or external purchasing documents in a class. The class must be assigned to the class
type 032. You can define a class for purchase requisitions, a class for external purchasing
documents, and a class for service entry sheets. The release class is assigned to the release object
in Customizing (1 = purchase requisition, 2 = external purchasing documents, 3 = service acceptance).
18. What is true in the following for blocked stock and GR blocked stock
a. Blocked is valuated and GR is non Valuated
b. Blocked is non- valuated and GR is valuated
c. Both are valuated
d. Both are non-valuated
19. What is document type for Stock Transport Orders and what are the Prerequisites for
transferring stock between two plants?
a. Plant to Plant
b. Storage Location to Storage Location
1. Change Stock Type
2. Batch Number
3. Material Number
20. What is the effect of a goods receipt?
a. Both the stock and Quantity gets updated
b. Only Value gets updated
c. Only quantity gets update
d. None of the above
21. When is the Delivery completed indicator automatically set in Purchase order?
a. Once all the quantities are delivered
b. Once all the quantities are invoiced
c. Both
d. None of the above
22. Write any two differences between Pipeline Procurement and Standard procurement
No Inventory Management and No Physical Inventory
Available in any quantity
No purchasing, no MRP
Cost are updated in Production Order
23. Can we have different output type for the same Document?
Yes
NO
24. What are the possible ways of assigning a printer?
a. P. group / User parameters/
b. P. group/ Material Group
c. P. group / Material Type
d. P. Group/P, org
25. On which levels you can valuate your materials
Plant
Company
Your choice of valuation level affects the following:
Maintenance of material master records
G/L accounts in which material stocks are managed
If material stocks are valuated at company code level, all plant stocks of a material are managed in joint
stock account for each company code.
If material stocks are valuated at plant level, the material stocks for each plant can be managed
idifferent accounts. You can define a separate account determination for each plant.
G/L accounts to which transactions are posted in Materials Management
26. What is the purpose of Account Grouping Code?
The account group is a classifying feature within vendor master records. The account group determines:
the number interval for the account number of the vendor
whether the number is assigned by the user or by the system
Which specifications are necessary and/or possible in the master record.
27. BSX and GBB stand for?
The transaction keys are used to determine accounts or posting keys for line items which are created
automatically by the system. The transaction keys are defined in the system and cannot be changed
by the user.
GBB Offsetting entry for inventory posting
BSX Inventory posting
T-code: OBYC
28. Can you assign more than one valuation class to a single material number?
NO
29. What enables us to valuate import and domestic materials differently?
Split valuation

30. Accounting entries in the following cases

GR in the case of Standard Price

Stock Account
GR/IR Account
Vendor Account

GR in the case of Moving average price

Stock Account
GR/IR Account
Vendor Account

GR in the case of price difference between material master price and PO price & Materials in S
Stock Account
GR/IR Account
Price difference expense/revenue 

GR in the case of price difference between material master price and PO price & Material is in V
Stock Account
GR/IR Account
Price difference Account

35. What are the accounting entries in the case of Transferring material Between Storage
locations of the same plant?
36. What is Gross Posting and Net posting?
Gross: If you post the gross amount of an invoice, the R/3 System ignores the cash discount amount
when you enter the invoice; it posts the cash discount amount to a “cash discount” account at the
time of payment. Therefore, the cash discount amount is not credited to the stock or cost account.
Net: If you post the net amount of an invoice, the R/3 System posts the cash discount amount from
a cash discount clearing account to the stock or cost account. The cash discount clearing account is
cleared at the time of payment.
37. I do Invoice Reduction normally in the case of
a. Mistake in price made by me
b. Mistake made by vendor
c. Mistake in price made y customer
d. None of the above
38. During LIV under what circumstances the system generates two Accounting documents?
39. What is the Subsequent credit memo used for?
An invoice must be entered as a subsequent debit if a purchase order item has already been invoiced and
further costs are incurred.
You must enter a credit memo as a subsequent credit if a purchase order item was invoiced at too high a
price and now you have received a credit memo.
40. How we can post unplanned delivery cost
Among the items or post the costs to a separate G/L account.
If the R/3 System distributes unplanned delivery costs among the items, it treats them in the same
way as price differences.
If the R/3 System posts unplanned delivery costs to a separate G/L account, they do not appear in
the purchase order history.
41. What are the ways in which I can Post the unplanned delivery cost
If unplanned costs are apportioned among the purchase order items, the offsetting entry is made to the
respective stock account or cost account for the individual items, or to a price differences account.
42. What is ERS and when do we use that
In Evaluated Receipt Settlement (ERS), goods receipts are settled directly without the vendor having to
issue an invoice. The R/3 System uses information from the purchase order and the goods receipt.
The system creates a message record at the time of settlement, which allows you to send the
vendor a letter about the settlement. ERS is defined for each purchase order item. You can use
ERS only if it is defined for the PO vendor in the vendor master record. If a purchase order item is
to be settled automatically, goodsreceiptbased Invoice Verification must also be active for the
item.
43. What is stochastic block?
Procedure for checking invoices. In stochastic blocking, the system blocks invoices for payment at
random. The higher the invoice value, the higher the probability of it being stochastically blocked.
44. What is one step and two steps transfer process.
One step: Posting procedure for physical stock transfers from storage location to storage location
or from plant to plant. When using the onestep procedure, you only have to record one transaction
in the system to post the removal from storage at the point of issue and placement into storage at
the point of receipt. The system creates just one material document for a stock transfer.
Two step: Posting procedure for physical stock transfers from storage location to storage location
or from plant to plant. With this procedure, it is possible to monitor the stock affected by the
transfer since it is designated as "in transfer" at the receiving point and administered as such in
the system.
45. During a twostep process will value and stock be in transit or only stock be in transit or only
value in transit
Involving valuation stock: stock
Involving no valuation stock: stock and value
46. Total shelf life   6 months
Minimum remaining shelf life is  4 months
Production date during the GR is 01. 01. 2003
Calculate the remaining shelf life  
Will the system accept this GR or not  
47. Difference between the accounting entries of a normal GI and Pipeline item GI
A pipeline withdrawal has the following effects:
Stock levels are not changed
Consumption is updated
A pipeline liability towards the vendor is incurred, which must be accounted for and settled on a
periodic basis.
48. How do you create returns PO  what will be the Accounting entries in the case of GR
For returns to vendor, you do not have to reference the preceding document with which the material
you are returning was procured.
49. For an Account assigned PO where from the GL accounts are determined
a. From OBYC
b. From Account assignment in PO
c. From Both
d. None of the above
50. Can we update the prices of Info record from Purchase order   If yes how?? If no what will
get updated in the info record
Purchasing info records determine the prices suggested in purchasing documents in two ways:
Conditions: Conditions are included if they have been maintained for an info record manually or from
a quotation.
Last purchase order: If an info record does not contain any conditions, the system reads the
number of the last purchasing document in the info record and then suggests the price from this
document.
51. What is Entry AIDS of Account Determination? Where this is useful
52. How an account determination happens with the help of Valuation class   Brief.
The valuation class has the following functions:
Allows the stock values of materials of the same material type to be posted to different G/L
accounts.
Allows the stock values of materials of different material types to be posted to the same G/L
account.
Determines together with other factors the G/L accounts updated for a valuation relevant
transaction (such as a goods movement).
53. What is important in the case of Blanket Orders?
a. Account assignment category
b. Purchasing Group
c. Purchasing Org
                 d. Validity Period
54. What is M and W in contracts?
M: Quality contract
W: Value contract
55. Can M and W can be used in Purchase orders and Scheduling Agreements
NO

56. Briefly explain the process of consignment?

The vendor provides goods that are stored in consignment stores. The vendor remains owner of the
material until you withdraw materials from the consignment stores.
The vendor is informed of material withdrawals on a regular basis.
The quantity withdrawn is invoiced at certain time intervals. As a result of such withdrawals, the
enterprise incurs a liability towards the vendor. Such liabilities are settled periodically.
57. Can you use different movement types in one material document?
NO
58. You have posted a wrong quantity at GR. How do you rectify this?
If the quantity is more than PO, a reversal action can be taken.
If the quantity is less than PO, an additional GR can be taken.
59. How are goods movement documented in MM?
Material doc:
Account doc:
CO doc:
60. Which of the following is not a planning run type?
1. NETCH
2. NETPL
 3. NEWPL
4. NEUPL
Regenerative planning (NEUPL): The system plans all materials which are included in the planning file
irrespective of all indicators.
Net change planning (NETCH): The system only plans those materials which are provided with the
change indicator NETCH.
Net change planning in the short term planning horizon (NETPL): The system only plans those
materials provided with the change indicator NETPL.
61. What is a planning file?
File that contains a list of all the materials for which a change relevant to requirements planning has
occurred and that are therefore automatically flagged for planning.
If such a change has taken place, the entry in the planning file is carried out automatically.
Each flagged material is taken into account and planned in the next planning run.
62. What determines whether a material is to be included in the total planning run?
The indicator in the planning files entry.
63. Which option do you have in releasing an invoice manually?
Q
D
P
I
64. Are accounting documents created for the following postings?
a. Transfer posting from material to material (Y)
b. Material type ROH, GR for PO posted to stock (Y)
c. Transfer posting from plant to plant in one step (Y)
d. Transfer posting from plant to plant in two steps: Removal from stock
If the plants belong to different valuation areas, an accounting document is created parallel to the
material document for the removal from storage, because the stock is transferred from one plant
into another.
65. What is a firming type in MRP?
The firming type determines how procurement proposals are to be firmed and scheduled within the
planning time fence during the planning run.
Planning time fence: You can protect procurement proposals from any automatic changes to master
schedule items in the near future by using the planning time fence.
Within the planning time fence, the system does not automatically change procurement proposals during
the planning run. That is particularly useful for MPS.
Outside of the planning time fence, procurement proposals are created as usual in the planning run.
When these procurement proposals move into the planning time fence, they are firmed
automatically depending on the setting of the firming type. The system always calculates the end
date of the planning time fence dynamically starting from the planning date.
66. What is a Planning horizon in MRP?
The planning horizon is the period that is set for the "net change planning in the planning horizon." For
this type of net change planning, only those materials are planned in the planning run that have a
change relevant to MRP within the period (in work days).
The length of the planning horizon should at least include the following:
��period in which customer orders enter
��delivery times
 ��complete material processing time
Net change planning: Materials planning run, whereby only those materials are planned which have
undergone a change relevant to materials planning since the last planning run.
67. What is the movement type for Goods receipt into Warehouse?
a. 101
b. 561
c. 321
d. 343
68. What is the transaction code invoice posting?
MIRO
69. What is the difference between the transaction code MB5B and MMBE?
MB5B: Stock Movement
MMBE: Stock Overview
70. What is the purpose of reconciliation account?
G/L account, to which transactions in the subsidiary ledgers, (such as in the customer, vendor or assets
areas), are automatically updated.
It is generally the case that several sub ledger accounts post to a common reconciliation account. This
ensures that the developments in the sub ledger accounts are accurately reflected in the general
ledger (i.e. in line with balance sheet conventions).
71. Which of the following is not taken into consideration by the SAP R/3 system during vendor
comparison?
a. Basic price
b. Discounts
c. Taxes
d. Freight
72. Can the Info record be updated from quotation?
Yes
73. What does the term ‘parking the invoice’ mean?
Parked data of a vendor invoice saved in the SAP System using the "Park Incoming Invoice" function.
You park invoice documents if:
Important information for posting the invoice document is still missing (in this case, the balance may not
be zero for example)
The business process of invoice entry is performed in several steps (by both clerks responsible purely
for invoice entry and by invoice verification staff for instance)
When parking documents, you must populate at least the following fields:
Document date
Invoicing party
Vendor
Account assignment objects
The following updates take place:
Document changes are logged
Data for advance tax returns
Index for duplicate invoice check
Vendor open items
PO history
 Parked invoice documents can later be changed, completed, deleted, or posted. However, they can no
longer be put "on hold".
a) Define the impact of tolerances at GR?
Limit up to which invoice variances are accepted by the system without query. If the tolerance limit is
exceeded, the relevant items are blocked and payment cannot be effected.
74．What is the difference between MRP list and Stock requirement list?
The MRP list displays the result of the last planning run. Changes that have occurred between
planning runs are ignored in the MRP list.
In contrast to this, the system displays all changes in stock, receipts and issues, which have
currently occurred, in the stock/requirements list.
By using the MRP list and stock/requirements list comparison, you can compare these two evaluations
with each other. This means that you can compare the situation at the time of the last planning run
with the current stock/requirements situation.
75．What does the term ‘source of supply’ mean? Name them.
Procurement option for a material.
A source of supply can be an external source (vendor) or an internal one (for example, a firm's own
plant).
The preferred source at any one time can be determined by the system on the basis of quota
arrangements, source list records, outline agreements (longerterm purchase arrangements) or info
records that have been defined for the material.
76．Identify the movement type for a reversal and return to the vendor.
77．Briefly explain the physical inventory process.
1) Physical Inventory Preparation
a) Create a physical inventory document.
b) Blocking Materials for Posting
c) Print and distribute the physical inventory document.
2) Physical Inventory Count
a) The stocks are counted for individually for the materials in a physical inventory document.
b) The count results are written on the printout of the physical inventory document.
c) The printout is then directed back to the person responsible, so that he or she can enter the count
into the system and analyze it.
3) Physical Inventory Analysis
a) Entering the count results in the system
b) Initiating a recount (optional)
c) Posting inventory differences
78．List all the stock types.
The storage location stock and special stocks on a company's own premises are subdivided into three
different types:
Unrestricteduse stock
Stock in quality inspection
Blocked stock
Special stocks with the vendor or customer are subdivided into two different stock types:
Unrestricteduse stock
Stock in quality inspection
If batch status management is active, a further stock type is supported: "restricteduse stock".
80. Which of the following is a timeindependent condition?
a) Info record
b) PO
c) Contract
d) Scheduling agreement
81. Which of the following is not true of contracts?
e) Contract can be created with or w/o reference to a PO
f) Delivery dates and quantities are mentioned
g) Validity period is mentioned
h) Special itemcategories M and W can be used
82. What are Firm and tradeoff zones in scheduling agreement?
Rolling delivery schedules created under scheduling agreements are divided into different time zones
indicating the degree to which the lines of the schedule are binding. You can define the following
time zones:
Firm zone (zone 1) (goahead for production).
The schedule lines within this zone count as firm and thus as fully binding. If you cancel a schedule line
that falls within the firm zone, the vendor is entitled to charge you with both production costs and
the costs of procuring input materials incurred by him as a result of the cancellation.
Tradeoff zone (zone 2) (goahead for procurement of input materials)
This is the "semifirm" zone, giving the vendor the goahead to procure necessary input materials to
manufacture the item ordered. If you cancel a schedule line within this semifirm zone, the vendor is
only entitled to charge you the material costs. Schedule lines falling within this time zone are thus
less binding than those falling within the firm zone.
Planning zone (zone 3) (forecast)
All schedule lines that lie beyond the first two zones (that is, delivery is tentatively scheduled for quite
a long way into the future) fall within the planning zone.
The firm and tradeoff zones are printed out in the schedule for the user’s information. For each
schedule line that falls within a certain zone, it is assumed that the relevant material is procured in
accordance with the conditions that apply to this zone (e.g. schedule lines falling within the firm
zone are fully binding).
83. At what level is physical inventory is carried out?
a. Plant level
b. Storage location level
c. Pur. org level
d. Company code level
84. What is meant by a Client in SAP R/3 system?
A grouping or combination of legal, organizational, business and/or administrative units with a common
purpose.
85. Name the essential organizational elements in MM.
Client, Company code, plant, purchasing organization, purchasing group
86. What views have to be maintained in Vendor master to create PO?
General:
Address
Control
87. How can you assign different delivery dates to a PO item?
Assign each item a delivery date.
88. What is the purpose of Lotsizing procedure?
The system determines material shortages for requirement dates in the net requirements calculation.
These shortage quantities must now be covered by receipts. The system calculates the receipt
quantity in the lotsize calculation which is carried out during the planning run. You specify how the
system is to determine the lot size by selecting one of the lotsizing procedures in the material
master record.
Three groups of procedures exist for calculating the lot size:
In the static lotsizing procedures, the lot size is calculated using only the entered quantities in the
material‘s master record.
The period lotsizing procedures groups together requirements from one or several periods to form a lot.
The optimum lotsizing procedures groups requirements from several periods together to form a lot,
whereby an optimum cost ratio is determined between lot size independent costs and storage costs.
89. What are account assignment objects? Name a few.
90. Stocks are stored at storage location level on
a. Value basis
b. Quantity basis
c. Value and quantity basis
d. None
91. What are Condition tables and Access sequences?
Condition table: A condition table consists of one or more condition keys and a data part. The data
part contains a number that references a record in another table. The latter table contains the
condition records.
Access sequence: An access sequence is a search strategy by means of which the system searches
for valid records in various condition tables. It consists of one or more accesses. The sequence of
accesses controls the priority of the individual condition records among each other. Through the
accesses, the system is told where to look first and where to look next for a valid condition record
in each case.
Calculation schema: A calculation schema groups together all condition types that play a part in
calculating the price. It sets out the order in which the condition types are taken into account in
the calculation.
Condition types: Condition types represent price factors in the system. There are condition types
for absolute and percentage discounts, freight costs, customs duties, or taxes, for example. Via the
condition type, you specify how the price factor is calculated (e.g. percentage or absolute amount).
92. What does ABC analysis mean?
Procedure to determine the importance of an object.
You perform an ABC analysis to classify objects according to specific criteria or performance measures.
Each object is assigned one of the following three indicators:
A: important
B: less important
C: relatively unimportant
An object can be a material, a vendor, or a plant.
ABC analyses are used in Materials Management, Plant Maintenance, Cost Accounting, the Logistics
Information System and ABAP Query.
93. Gine the transactions codes for the following
a. To view material list
b. Goods against order
c. Releasing blocked invoice
 d. To view PO history
e. Invoice verification
94. In which master data is schedule line activated?
Scheduling Agreement delivery schedule
95. What does Invoice reduction mean? Briefly explain how it is done.
When there is a discrepancy between the invoice quantities or values and the system suggested quantity
or value, invoice reduce can be used to create a memo to credit the difference.
96. What is an Invoice plan? Give an example.
List of dates on which invoices for purchase order items covering materials or services are to be
maintained and paid.
The invoicing plan permits extensive automation of the process of creating and paying invoices for both
recurring procurement transactions (such as rental or leasing payments) and transactions involving
settlement in stages (such as payment regarding the individual phases of a building project as they
are completed).
97. What does Random blocking of Invoice mean?
You can block invoices at random to check them again. If the stochastic block is active and you post an
invoice that is not subject to any other blocking reason, it can be randomly selected for blocking.
A stochastic block is not set at item level, but for the whole invoice. If a stochastic block is set when
you post the invoice, the system automatically sets an R in the field Payment block in the document
header data; there is no blocking indicator in the individual items.
98. Describe the following material types
a. FERT 
b. ROH 
c. HALB 
d. HAWA 
99. Briefly explain Reorder point planning.
Special procedure in materials planning.
If the reorder point is greater than warehouse stock, a procurement proposal is created by MRP.
If the stock falls below this quantity, the system flags the material for requirements planning by
creating a planning file entry.
100. What are the various planning levels in MRP?

Single Item Single Level

Single Item Multi Level

Total planning online

Total Planning background

Planning at MRP Area Leve