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Top 50 SAP MM Interview Questions And Answers For Experienced:
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1. What is a Material Master file?
Answer: A material master file stores and maintains all of the information related to managing a material. The material master is sorted on the basis of different criteria.
2. Why are material master records used in SAP?
Answer: Material master records are used in the SAP R/3 system to manage material-specific data. The material information stored in material master records is used by all logistics areas in the SAP R/3 system. The material master records integrate all material-specific data into a single database object that eliminates the problem of data redundancy. Because material master records store data in a single database object, the same data can be shared by all departments, such as purchasing, inventory management, materials planning, and invoice verification.
3. What do you mean by the release procedure?
Answer: Release procedure means approval of documents like purchase orders and purchases requisition manually by the criteria defined in the configuration.
4. If you have multiple line items in the purchase order, can you release line by line that purchase order?
Answer: No, the release is done only at header level in a combined way for all line items in case of the purchase order.
5. What do you mean by material type?
Answer: Materials with some common attributes are grouped together and they are assigned to a material type. This will differentiate materials and allow the organization to manage different materials in a systematic manner in accordance with the company’s requirement.
6. What is the class type? How will you configure a class type?
- A class type is the SAP system’s top-level unit, which is used to control the SAP system’s classes. It performs the following tasks:
- Defines the class objects
- Checks if class objects can be used in other classes or not
- Defines the class maintenance screen
- You can configure a class type by using the following menu path: SAP Customizing Implementation Guide > Cross Application Component > Classification System > Classes > Maintain Object Types and Material Types.
7. How is the vendor created?
Answer: You can create a vendor by using the transaction code XK01 and performing the following steps:
- Add the vendor name, company code, purchasing organization, account group, and vendor address.
- Add the country, bank key, bank account, and the name of the account holder.
- Save the data.
- This creates a vendor record in the system.
8. How is the information of material master records updated?
Answer: You can manually update the information in the material master records, however, there are some exceptions for which the information can be updated by the SAP R/3 system only, for example, administrative data.
9. What are the types of industry sectors defined in Material Master data?
Answer: The different types of industry sectors defined in the material master data are as follows:
- Aerospace and defense
- Chemical industry
- Food and related products
- Mechanical engineering
- Plant engineering/construction
- Service providers
10. What data in material master is maintained at the client level?
Answer: The general data, i.e., the data applicable to the company as a whole, is stored at the client level. ( apex training )
11. What is the serial number?
Answer: A serial number is assigned to an item to identify it and to store information about it. A serial number is mostly used to refer to equipment such as motors, drills, or vacuums. In MM, an item of material contains a serial number as well as a material number. This combination helps to uniquely identify an item of material.
12. What is vendor master data?
Answer: Vendor master data contains details of each vendor that supplies materials or services to an enterprise. The vendor master data is stored in individual vendor master records consisting of data, such as the vendor’s name, the vendor’s address, the currency used for the transaction, payment terms, and the contact person’s name (on the sales staff).
13. What are the different sections in vendor master data?
Answer: Following are the three sections in vendor master data:
- General data— Provides general information about the vendor that can be entered into the system for creating vendor records. General data can provide the name, address, telephone, and fax of the vendor through specified search terms. Additional information can also be added to the vendor master record by the accounting and purchasing departments using the transaction code XK01.
- Accounting data — Refers to financial information entered at the company code level. The financial information includes tax information, bank details, reconciliation account, payment terms, payment methods, and dunning information. You can enter this financial data using the transaction code FK01.
- Purchasing data — Refers to data entered while creating a vendor at the purchasing organization level. Different purchasing organizations have different purchasing data. The purchasing data includes partner functions, purchasing default fields, and invoice verification indicators. You can enter this data using the transaction code MK01.
14. Can a purchasing info record be created without a material number?
Answer: Yes, you can create a purchasing info record without a material number. If the material does not have a material number, you will need the following information to create the purchasing info record:
- Material short text
- Order unit
- Material group
- Short term key
15. What are the special stocks used in MM?
Answer: Special stocks are stocks that are managed separately regardless of whether they belong to your company. The company manages a material by using a data record, which contains all the required information.
The different types of special stocks are as follows:
- Sales order stock
- Returnable packaging with customer
- Consignment stock at customer
- Vendor consignment stock
- Returnable transport packaging
16. Why is negative stock needed in an organization?
Answer: Organizations need negative stock when a material is shipped to a customer and production is not confirmed or there is not enough stock to satisfy the requirement. The system still allows the issuing of the material, and inventory shows a negative quantity of stock until the production of the material is confirmed.
17. What are the organizational levels in SAP R/3?
Answer: The top level of the organizational structure is the client, followed by company code, which represents a unit with its own accounting unit. The next level down plants where procurement activities take place. A plant will produce goods and makes goods available for the company. The purchasing organization is legally responsible for procurement transactions. This group is further subdivided into purchasing groups.
18. What are the special procurement types?
Answer: In a normal purchasing system, the customer purchases the goods from the wholesaler/retailer and the possession of the goods transfers from the wholesaler/retailer to the customer. This might not be the case with special procurement types, where the transfer of goods may not necessarily be from the wholesaler/retailer to the customer directly. For example, you might order a good for a friend of yours, who, in turn, purchases the goods from the wholesaler/retailer and then transfers the good to you. The friend is the third party involved in this process. Therefore, the possession of good indirectly transfers to the customer. This type of procurement is called the special procurement type. The special procurement type defines the external procurement or in-house production of the material. The following list shows the special procurement types available in the SAP system:
- Stock transfer using the stock transport order (STO)
- Production in another plant
- Third-party processing
- Returnable transport packaging
- Pipeline handling
19. How can we take consignment stocks into our own stocks?
Answer: You can take consignment stocks from the vendor into your own stock by performing the following steps:
- Select Goods Movement > Transfer Posting to display the initial screen.
- Enter the plant name and the location where you want to store the materials.
- Select Movement Type > Transfer Posting > Consignment > Consignment to Own.
- Select Continue to display the collective entry screen.
- Enter the name of the vendor, the materials, and the number of materials.
- Enter the receiving storage location if you want to store the materials in another storage location.
- Post the document.
- This makes the vendor liable to change the storage location of the materials.
20. How can we create an information record based on the material master?
Answer: First, you need to create the info record by selecting SAP Menu > Master Data > Info Record > Create. Enter details such as vendor number, material number, purchase organization, or plant number. Then enter the number of the information record (in case of external assignments). Next, enter the general data for vendors, ordered quantity, origin of data, supplying information, and customs tariff number. Then enter the planned delivery time, purchasing groups, and standard purchasing quantity. Check the control data and take the default value of tolerance data and the purchasing group from the material master record. Finally, enter the net price and then select Go To > Texts to display the text overview. If the PO text is already defined, it appears in the material master record; otherwise, it needs to be entered. After all these entries have been made, the record is saved.
21. How do we assign material to vendors?
Answer: Select the following navigation path to link vendors to materials: SAP Menu > Logistics > Material Management > Purchasing > Master Data > Info Record > Create. Alternatively, the ME11 transaction code is used for this purpose.
22. What are the purchasing information records?
Answer: Purchasing information records, also known as info records, contain information related to the material and the vendor who is supplying the material. They also contain details about the material, such as the current price.
23. What are the prerequisites for creating a purchasing info record?
Answer: The prerequisites for creating a purchasing info record are as follows:
- Material number — Before creating a purchasing info record, the material number of the material master record should be known.
- Manufacturer part number (MPN) material number — Before ordering a material that has an MPN, you must know its MPN material number.
- Vendor number — You should also know the number on the vendor master record.
- Organizational level — If the purchasing info record is for a particular purchasing organization or plant, then the code specific to that purchasing organization or plant is required.
24. How can we create a purchasing information record?
Answer: You can create a purchasing information record either manually or automatically by setting the Info Update indicator when maintaining a quotation, a purchase order, or an agreement.
25. What are the categories of purchasing information records?
Answer: The categories of purchasing information records are as follows:
- Standard— Contains information for the standard purchase order. In this type of purchasing info record, you can create info records for materials and services that do not have master records.
- Subcontracting — Contains ordering information for subcontract orders.
- Pipeline— Contains information on commodities that are sent through a pipeline, such as oil or water.
- Consignment— Contains information on materials that are in the vendor’s possession and are kept by the vendor at some other premises at his own cost.
26. What is dunning procedure? How can it be configured?
Answer: Sometimes, you may need to send a payment reminder or a dunning notice to a person or an organization to remind them of their outstanding debts. The process by which the system controls dunning is called dunning procedure. Dunning procedure can be configured by using the FBMP transaction code or the following navigation path: IMG > Financial Accounting > Accounts Receivable and Accounts Payable > Business Transactions > Dunning > Dunning Procedure > Defining Dunning Procedures.
27. What are the different fields in vendor master data?
Answer: Sometimes, you may need to send a payment reminder or a dunning notice to a person or an organization to remind them of their outstanding ( hadoop training )
The different fields in vendor master data are as follows:
- The name and address of the vendor
- The currency in which the transaction will be done
- The terms and conditions of payment
- The names of important contact persons
- The accounting information, such as the reconciliation account in the general ledger
28. How do we create a vendor number range?
Answer: When you create a number range, it is important to remember that vendor numbers, such as material numbers, can be assigned externally or internally. You can create vendor number ranges by selecting the following navigation path: IMG > Financial Accounting > Vendor Accounts > Master Data > Preparations for Creating Vendor Master Data > Create Number Ranges for Vendor Accounts.
For configuring the vendor number range, you should enter a unique number for the range, which is a two-character field, and then specify the limit for the number range. The current number field is used to define the current number. The Ext. field Specifies whether the number range is defined externally by the user.
29. What is the document management system (DMS) in SAP?
Answer: The DMS in SAP helps you store external documents, such as pictures of the goods or material. By using the DMS, you can set the maximum size of the picture that can be uploaded in a document. The DMS helps to link these external documents with the appropriate SAP objects.
30. What are the differences between company-owned special stocks and externally-owned special stocks?
Answer: The differences between company-owned special stocks and externally-owned special stocks are listed in the following table:
- Company-Owned Special Stocks
- Externally-Owned Special Stocks
- Stocks that belong to the company but are stored with the wholesaler or the customer are called company-owned special stocks.
- Stocks that belong to the wholesaler or the customer but are stored at the company are called externally-owned special stocks.
- Company-owned special stocks are managed at the production level.
- Externally-owned special stocks are managed at the place where they are stored.
31. What are the important steps in the procurement life cycle?
Answer: Procurement Process starts with gathering requirements, then creating a purchase requisition and then we create a formal document that has to be sent to vendor i.e. purchase order. After these goods will be supplied by vendor and goods receipt is done along with invoice verification. Then the vendor is paid for supplied goods and services.
32. Can we do the physical inventory check of consignment stocks?
Answer: Yes, you can do the physical inventory check of consignment stocks. To do the physical inventory check, perform the following operations:
- Create a physical inventory document
- Enter the physical inventory count
- Post the inventory differences
33. What tasks are covered under Inventory Management?
Answer: Inventory management is an important part of materials management (MM). Optimal inventory management not only ensures an uninterrupted supply of the material at the required time but also prevents wasting items.
MM covers the following tasks:
- Material stock management
- Planning, entry, and documentation of goods transfers from and to the inventory
- Physical stocking of items
34. What is a Physical Inventory?
Answer: Physical inventory is a process in which all the transactions related to the movement of goods are stopped and the company physically counts inventory. It is required in financial accounting rules or for placing an accurate value on the inventory for tax purposes.
35. What are the initial configuration steps for physical inventory?
The steps to purchase acquisition are as follows:
- Defining the default values for the physical inventory document
- Reporting batch inputs
- Recording tolerances for physical inventory differences
- Inventory sampling as well as the configuration of cycle counting
36. How is the inventory management integrated with MM?
Answer: Inventory management is directly linked with the MM module because any movement of goods to and from inventory happens under the MM module. MRP, purchasing, and invoice verification are some of the MM components that are also linked with inventory management. After the material is ordered it is posted as a goods receipt with reference to the purchase order. The actual data of the quantities are checked in the vendor’s invoice.
37. What is Goods movement? What type of documents is created after the goods movement?
Answer: Goods movement refers to the movement of stock. This movement of stock could be either inbound from the vendor, outbound to a customer, between different plants, or even between different stocks within a plant. After the goods movement, the SAP system creates two types of documents: material documents and accounting documents.
38. What is Goods Receipt & Goods Issue?
- Goods receipt is the process that enables the receipt of material from a vendor or from the in-house production process. There are other types of goods receipts in SAP that include initial stock creation. The goods receipt process also increases stock due to one of the following processes:
- Receipt of production order
- Receipt of the purchase order
- Initial inventory entry
· Goods issue is a process in which the stock in the warehouse is reduced due to any of the following reasons:
- Shipment to a customer
- Stock withdrawal for a production order
- Return of materials
- Material required for sampling
- Scrapping of materials
39. What is the result of goods movement?
The following events are initiated when goods movements take place:
- First, a materials document is generated, which is proof of the goods movements.
- Accounting documents are generated if the movement of goods requires a change in the financial accounts.
- The stocks of the quantities of the materials are updated.
- The stock values in the material master are updated.
- Financial and material documents are updated.
40. How do you post the goods if the PO number is not known?
Answer: If the purchase order number is not known, you must enter search criteria for the purchase order in the initial screen. As a result, the list of purchase orders is displayed. The desired purchase order items can then be copied.
41. With which modules in SAP is the inventory management integrated?
Answer: Inventory management is an important part of the SAP MM module. The business activities of an organization revolve around the inventory of materials, which serves as the input for the manufacturing process or the inventory of prepared goods for delivery or sale. The material is purchased from the appropriate vendors on the basis of requests from the materials requirement planning (MRP) module. The delivered items are recorded as the receipt of the goods in inventory management. The materials are then stored, either for delivery to the customer or for manufacturing processes. Inventory management is integrated with other modules, such as financial accounting (FI), sales and distribution (SD), production planning (PP), project system (PS), and quality management (QM).
42. What are the initial configuration steps for inventory management?
The steps for inventory management are as follows:
- Defining plant parameters
- Defining system message attributes
- Defining number assignment
- Defining goods issue, transfer posting, screen layout
- Maintaining copy rules for reference documents
- Setting up dynamic availability checks
- Confirming the negative items
43. What are the special stocks in SAP?
Answer: Special stocks are defined as stocks that must be managed separately by a company.
They can be either company-owned or external stocks. They can be categorized as follows:
- Stock transfer using stock transport order
- Third-party processing
- Returnable transport packaging
- Pipeline handling
- Sales-order stock
- Project stock
44. How is the vendor returned processed without a purchase order reference?
ou first need to observe the Return column and then select Item Detail > MIGO_
GR > Goods Receipt for Purchase Order. If the intention is to deduct the stock, then movement type 161 is used; otherwise, 162 is used to undo the changes. Lastly, you must ensure that the document is a return purchase order. The document is then saved.
· Alternatively, you can use the M21N transaction code for this purpose.
45. What happens when a goods receipt is posted?
While posting a goods receipt, the following events occur:
- The material document is created.
- The accounting document is created.
- Three printed versions of goods receipt notes are modified.
- The stock level changes.
46. How can we view the stocks provided to the vendor?
Answer: The stocks of the material provided to a vendor can be viewed by using the SC Stock Monitoring for Vendor report. The report can be accessed by selecting Purchase Order > Reporting > SC Stocks per Vendor from the menu. With this report, the current status of the stocks planned issues, and planned receipts can be viewed.
47. What do you mean by subcontracting?
Answer: Subcontracting can be defined as the processing of materials by an external supplier.
48. How is subcontracting used in case of MM?
Answer: Subcontracting is the process by which the vendor receives the materials to produce the end product. Subcontracting involves the following procedures:
- You order the end product by using the subcontract order. The components that the vendor needs to manufacture the end product are mentioned in the PO.
- During the inventory management process, the components are posted to the stock of material provided to the vendor. Later, the components are supplied to the vendor.
- The vendor then processes the service and delivers the materials ordered. The consumption of the components is posted.
- · If, after posting the receipt of the goods, the vendor notifies you that the quantity of the components actually consumed is different than planned in the PO, you must make an adjustment.
- The vendor then charges for the service, for which the invoice is posted in Invoice verification.
49. What information does the subcontracting info records contain?
Answer: A subcontracting info record consists of ordering information related to subcontracting orders. For example, if you entered into a contract with an outside source for the assembly of a component, the subcontracting info record would contain the price specified by the vendor for the assembly work.
50. How are components consumed in case of subcontracting?
Answer: In subcontracting, the end product is ordered by using a subcontract order. The materials or components required by the vendor to manufacture the end product are mentioned in the PO. The components are posted to the stock of the material provided to the vendor during inventory management. When the components are supplied to the vendor, the vendor manufactures the end product and delivers it. At this point, the receipt of the goods is posted with a reference to the subcontract order. The goods receipt also contains the posting of the consumption of the components from the stock of material provided to the vendor. If the components consumed by the vendor are more or less than that specified in the PO, an adjustment needs to be posted to correct the consumption of components.