SAP MM Interview Questions And Answers Pdf

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Top 50 SAP MM Interview Questions And Answers Pdf

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1. What is SAP MM?
Answer: SAP MM (Material Management) is an operative module in SAP that deals with appropriation administration and material superintendence. The MM module comprises system configuration, master data, and activities to finish the procure to pay method.
Top 50 SAP MM Interview Questions and Answers Pdf

2. What is SAP? How is it used in industries?
Answer: SAP is the most popular enterprise resource planning (ERP) software application used to provide enterprise business solutions. It was first introduced in 1972 in Mannheim, Germany. SAP stands for Systems, Applications, and Products in Data Processing.
The SAP provides complete business solutions by integrating various business tasks such as sales, purchase, and production. SAP takes information from one business process and incorporates it into another business process, thereby speeding up all business processes. For example, information about the raw material in stock is used by the production department to determine how to prepare products.
SAP is widely used in various industries because as it updates and processes important data very quickly, it can automate business processes and provide real-time solutions for businesses.

3. What is a Purchase Order?
Answer: Purchase order is the regular and final approval of the demands which is given to the vendor to fulfill material or services. A purchase order will combine essential data like name of material with its identical plant, aspects of purchasing company with its corporation code, the name of a vendor, and date for transportation of material. 

4. List out the important field in purchasing view?
Answer: The critical fields in purchasing view are

  • The base unit of measure
  • Order unit
  • Purchasing group
  • Material group
  • Valid from
  • Tax indicator for the material
  • Manufacturer part number
  • Manufacturer, etc.

5. How do you post a goods receipt?
Answer: Path to post Goods Receipt
Logistics ⇒ Materials Management ⇒ Inventory management ⇒ Goods movement ⇒ Goods movement

6. How are the consignment stocks created?
Answer: Consignment stocks are created in the normal purchase order (PO) or requisition, but the main thing to consider is that you must enter the K category for the consignment item. As a result, the goods issued are posted to consignment stores and the invoice receipt is not generated.

7. Define the consignment cycle?
Answer: Consignment cycle is similar to the purchase cycle, except that when you create goods receipts of the consignment stocks, only quantity (QTY) is updated and no accounting documents are created. Once the goods are utilized, consignment is settled. The value of the consumed or issued consignment stocks is taken from the active purchase info record. 

8. How is consignment material procured?
Answer: Consignment material is procured through purchase requisitions, POs, and outline agreements.

9. How can we see the consignment stocks in SAP?
Answer: You can see the consignment stocks in SAP by using the following functions:

  • Display consignment info record
  • Display the stock overview
  • Display consignment stocks

10. What do you mean by reservation?
Answer: Sometimes, the stock requires being obstructed in progress so that it can be accessible at a selective point in time. This is recognized as a booking. Reservation guarantees that stock is ready and it can be utilized when needed. Booked quantity can be inspected by code MBE.

11. Explain what is CBP? What is the difference between CBP and MRP?
Answer: CBP is the earlier consumption amounts of stock; it is utilized to determine future demands. On the evidence of past expenditure costs, the net demand for goods is estimated.

The distinction between CBP and MRP is that while you intend materials managing MRP, you have to foretell the materials necessary based on trades and services outlining (SOP). While in CBP you possess to foretell the material necessary based on traditional demand for materials.

12. What is the movement type for Goods issue reversal ?
Answer: Movement type is 262 in Goods issue reversal

13. Why is the receipt of the goods imported to a company?
Answer: Goods receipt indicates a receipt or inward movement of stock of materials or goods. When an external vendor provides stock to the company, the receipt of the goods is generated as a purchase order, and when the material is produced in-house, the receipt of the goods is generated as a production order. A goods receipt is important to a company because using a goods receipt moves material into stock, updates the stock levels, and thereby indirectly enables the production process.

14. How is a goods receipt performed?

  • The steps to perform a goods receipt are as follows:
  • Enter the header data.
  • Select the movement type and the purchase order number.
  • The document is posted in the database.

15. What are some of the movement types for stock transport order?
Answer: One step transfers of materials can be posted using movement type 301. Other movement types are 303, 351, 641, or 643 in the stock transport order.

16. What is the difference between purchase requisition and purchase order?
Answer: A purchase requisition is an internal document and it is a request that is made to purchasing organization to procure a certain list of material while purchase order is a formal document that is given to vendor containing a list of items to be procured from the vendor.

17. How do you perform an Invoice Verification?
Answer: If the Invoice refers to an existing document (PO, etc.), then the system pulls up all of the relevant information like Vendor, Material, Quantity, Terms of Delivery, and Payment Terms, etc. When the Invoice is entered, the system will find the relevant account. Automatic posting for Sales Tax, Cash Discount, Corrections, etc. When the Invoice is posted, certain data such as Average Price of Material and Price History are updated. Use Transaction MIRO.

18. How do you display parked documents?
Answer: There are two possible transactions to use here. They are FB03 and FBV3. The first shows all posted document types. This is the best choice if you think the document has been posted to your actual balance. The later shows only parked documents that have not yet posted to your expenditure balance. These documents are still encumbrances. It is the best choice if you are trying to find which documents are still awaiting completion or approval. This transaction is very similar to the FBV2 the transaction used with P-Card reconciliation and marking parked documents complete.

19. What are the industry-specific solutions available in mySAP?

The mySAP ERP application presents business clarifications for about all enterprise, including chemical, automotive, and media. Several industry-specific resolutions ready in mySAP involve the following:

1. mySAP Automotive
2. my SAP Aerospace and Defense
3. my SAP Consumer Products
4. my SAP Banking
5. my SAP Chemicals
6. mySAP High Tech
7. mySAP Engineering and Construction
8. my SAP Healthcare
9. my SAP Higher Education and Research SAP Insurance
11. my SAP Media
12. my SAP Oil and Gas
13. my SAP Mill Products
14. my SAP Mining
15. my SAP Public Sector
16. my SAP Pharmaceuticals
17. my SAP Service Providers
18. my SAP Retail
19. my SAP Telecommunications

20. mySAP Utilities20. How do you check Quota Rating?
Quota rating = (Quota Allocated Quantity + Quota Base Quantity)/Quota .

21. The material does not have a master record. How can we procure that?
Answer: There may be cases while a material does not have a master report. You can accomplish various purposes in several situations to obtain the master disk. For example:

  • You can produce a material master disk if there is no material master record for appropriate material.
  • You can stretch the material master disk if the material master record survives for an appropriate material simply the user administration does not have the original data.
  • You can also enlarge the material master record if the material master record survives for a selective material and the user section has the master information but it has been listed in a various organizational level.

22. State the importance of classification data?
Answer: Classification data allows you to search for materials on the basis of the characteristic values entered into the classes. This feature is very useful when the customer wants to search for a particular vendor and a particular batch. ( big data online training )

23. Explain the terms Planned delivery and GR processing time?
Answer: Planned delivery means a number of calendar days required to obtain the material, and GR processing means the number of workdays required after receiving the material for inspection and placement into storage.

24. What is the last step in the Procurement cycle?
Answer: Invoice verification marks the end of procurement after purchase order and goods receipt.
Invoice posting will update all related documents in financial and accounting.
A blocked invoice that varies from the actual invoice can be processed through invoice verification.

25. Briefly describe the history of the SAP software?
Answer:  The SAP software was improved by an organization of the corresponding name. SAP (the company) was established in 1972 by five former IBM employees: Dietmar Hopp, Hans-Werner Hector, Hasso Plattner, Klaus Tschira, and Claus Wellenreuther. SAP delivered its mainframe outcome, called SAP R/2, in 1979. The client/server version of the SAP software, called SAP R/3, was released in 1992. Now, SAP is the biggest businessperson of the regular business-application software. SAP regularly performs scalable solutions to its customers, empowering them to respond to dynamic market conditions and supporting them to secure a benefit above their rivals. Some of the major SAP applications presently available are defined in question 4 and include SAP R/3, my SAP ERP, mySAP Customer Relationship Management (CRM), mySAP Supplier Relationship Management (SRM), mySAP Supply Chain Management (SCM), and mySAP Product Lifecycle Management (PLM), to name a few.

26. Why is SAP so popular? What are some of the other ERP applications available in the market?
Answer: SAP is the most popular ERP software available because it updates and processes business data in real-time. Available ERP software can be divided into two categories: open-source ERP software and proprietary ERP software. Some of the most commonly used ERP applications are listed in the following table.

27. What is mySAP ERP? What business components can it be classified into?
Answer: my SAP ERP is the next-generation ERP application from SAP AG in Germany, and was first launched in 2003. The mySAP ERP application has all the features of previously released SAP ERP software, such as SAP R/3 and SAP Strategic Enterprise Management (SEM), along with its own extensions. The mySAP ERP application provides e-commerce solutions by using Web technology.

The mySAP ERP application has the following advantages:

  1. Mobile infrastructure, which improves workforce mobility
  2. Transparency through a business intelligence framework
  3. Delivery of people-centric services
  4. Faster access to information, which facilitates quick decision making
  5. Seamless integration of processes throughout the business

mySAP ERP includes the following products:

  1. mySAP Enterprise Resource Planning (ERP)
  2. mySAP Supply Chain Management (SCM)
  3. mySAP Supplier Relationship Management (SRM)
  4. mySAP Customer Relationship Management (CRM)
  5. mySAP Product Life Cycle Management (PLM)

mySAP R/3 can be classified into the following business components:

  1. Financial applications
  2. Human resource applications
  3. Logistics
  4. Sales and distribution applications

28. Why is batch record important?
Answer: A batch represents a quantity of a particular material processed at the same time with the same parameters. These materials, produced as one batch, have the same characteristics and values, which may vary from the materials of another batch produced on the same day.
A batch record is important because batch records indicate that the batch conforms to the Current Good Manufacturing Procedures (GMP). The batch record also contains specific information about the product tested, analytical methods, and test results.

29. What benefits will be realized after implementing SAP in any organization?
Answer: After the installation of SAP R/3 in an organization, the following changes will occur:

1. Improvement in project management and project execution capabilities
2. Integration of suppliers and subcontractors
3. Optimization of sales-order capabilities
4. Comprehensive business support specific to a particular industry type
5. Minimal cost of ownership
6. Uniformity of business processes
7. Ability to make safe strategic choices

30. What are the different modules in SAP R/3?
Answer: Fi and CO. These modules are further grouped into various business-functional areas. The functional areas and the SAP R/3 modules in those functional areas are as follows:

Financial applications— Deals with an organization’s financial matters, such as preparing and analyzing financial documents and reporting the document output to the appropriate authorities for further processing. To manage all these concerns, the following SAP R/3 modules are grouped in this functional area:

FI— Financial Accounting
CO— Controlling
EC— Enterprise Controlling
IM— Investment Management
TR— Treasury

Human resources— deals with documents related to an organization’s human resources department. The SAP R/3 modules grouped in this area help an organization to manage processes such as salary creation and distribution, employees’ payroll across the organization, and transferring data to other relevant departments, such as finance. This area consists of the following modules:

  • Personnel Management
  • Time Management
  • Payroll
  • Training and Event Management
  • Organizational Management
  • Learn SAP MM Tutorial

Logistics applications— This is the largest area covered by SAP R/3. This area helps manage broad-level business processes such as sales and distribution of products, materials management, production planning, and quality management. This area consists of the following modules:

MM— Materials Management
SD— Sales and Distribution
PP— Production Planning
PM— Plant Maintenance
LO— Logistics
QM— Quality Management
PS— Project System
WM— Warehouse Management

31. What is SAP R/3?
Answer: SAP R/3 is an ERP software that was officially launched in 1992. It is a replacement for the SAP R/2 mainframe computing-based ERP software and is based on client-server computing. With the advent of client-server computing, SAP AG in Germany (founder of the SAP ERP software) launched SAP R/3 to provide client-server-based real-time business solutions. The letter “R” in SAP R/3 represents the real-time business data processing, while the number “3” represents the three tiers in client-server computing.

  1. The three tiers in client-server computing are a presentation (client), application (business logic), and database (stores the actual business data).
  2. SAP R/3 integrates various business areas, such as sales, purchase, and procurement, by using different functional modules, such as Materials Management (MM), Sales and Distribution (SD), Financial (FI), Controlling (CO), and Human Resource (HR).
  3. Different versions of SAP R/3 include 3.1i, 4.0b, 4.5b, 4.6b, and 4.6c; the latest version is 4.70.

32. What are the core functionalities of the SAP system?
Answer: The core functionalities of the SAP system are Sales and Distribution (SD), Materials Management (MM), Financial Accounting (FI), and Production Planning (PP). In the first phase, companies implement the SAP software with these core functionalities. Later, in the second and third phases, they may also introduce other functionalities, such as Controlling (CO), Warehouse Management (WM), and Human Resource (HR). However, the types of modules and the phasing of implementation depends solely on the type of industry in which the client works, as well as the organization’s readiness and the urgency with which the integrated enterprise system, such as SAP, must be adopted.

33. How can we define an MM module? What is its importance in SAP R/3?
Answer: MM stands for Materials Management and is a part of the Logistics functional area of SAP R/3. It is an important SAP R/3 module because it helps manage broad-level business activities, such as procurement, valuation and assignment, batch management, and materials storage. Since materials are the most precious resource of an organization, extreme care needs to be taken in all the processes related to materials management. Efficient materials management is the essence of the MM module of SAP R/3.

34. How is the MM module integrated with other modules of SAP?
Answer: The MM module deals with materials procurement on the basis of the production required; therefore, it is linked with the PP module.
The SD module is proportionally related to the MM module because it uses information about the quantity of material sent for production.
The WM module is related to the MM module because the MM module maintains information about materials storage and materials transfers inside an organization.

The FI module is also related to the MM module, because every operation performed in the MM module directly impacts the financial processes of the organization.

35. What are the levels of organizational units in Enterprise Structure in SAP R/3?
Answer:  The customer is the greatest level part of the organizational units in Enterprise Structure in SAP R/3. The customer is tracked by the company code, which denotes a part of its own accounting, stability, and profit and loss (P& L). The succeeding level of organizational units in Enterprise Structure is the factory, which denotes an operational unit of a business.

36. How are batch numbers assigned?
Answer: The batch number is predefined in SAP. You can modify the batch numbers both by utilizing the OMAD activity code and by utilizing the exploration path IMG > Logistics-General > Batch Management > Batch Number Assignment > Maintain Internal Batch Number Assignment Range.

Observe either of the pair form steps to modify the batch number:

  • You can assign a batch number internally utilizing the internal number field, either by utilizing the OMCZ activity code or by succeeding the navigation path Display IMG > Logistics-General > Batch Management > Batch Number Assignment > Activate Internal Batch Number
  • Assignment > Initiate Batch Number Assignment.
  • You can further configure the method to provide electronic numbering of a batch by viewing the navigation path Display IMG > Logistics-General > Batch Management > Batch Number 

37. Define consignment stock. What are the main features of consignment stock?
Answer: Consignment, in a general sense, is the act of holding the ownership of materials but storing the materials at some other premises until the materials are sold or shifted somewhere else. The stored materials are known as consignment stock in the SAP system. Therefore, a stock that is stored at the customer’s premises but is the supplier’s property until the stock is transferred to the customer’s stock list is called the consignment stock. The main features of the consignment stock are as follows:

  • You can combine the consignment stock with your available stock at any point in time.
  • You can evaluate the consignment stock in any currency.
  • The price of the consignment stock fluctuates. This means that you can determine the price of the consignment according to the market conditions.
  • You can price the consignment stock in any unit.
  • You can use different features of purchasing, such as discounts, in the consignment stock.
  • The consignment stock is evaluated at a price quoted by different vendors. 

38. Define “client.” What is its importance in SAP?
Answer: A customer can be assigned to a person, organization, or company that acquires goods from a different personality, business, or industry. In terms of SAP, a customer is determined as a system that has its own master records and a collection of records. The customer is essential in SAP because it collects and manages data regarding the company anywhere SAP is performed.

39. How do we create a client in the MM module?
Answer: You can create a client in the MM module either by using the transaction code SCC4 or by performing the following steps:

Select SAP Menu > Tools > Administration > Administration > Client Administration.
Double click SCC4–Client Maintenance. The display view Clients: Overview screen appears.
Select Display > Change. The information dialog box appears.
Click Continue. The change view Clients: Overview screen appears, where you can create a new client.

40. Mention what is the transaction code used to extend the material view?
Answer: To extend the material view transaction, code MM50 is used.

41. How is the pricing of consignment stocks done? What information does consignment info record contain?
Answer: Prior to ordering material from a vendor or posting a goods receipt to the consignment stock, you need to obtain the consignment price. If the consignment material is ordered from several vendors, the system maintains the consignment stock of each vendor separately. The reason the system maintains the consignment stock separately is that the price of the consignment stock may vary from one vendor to another.
• The consignment information (info) record contains the consignment price required for the purpose of material valuation and accounting.

42. Define “company.” How is it different from a client? What are the data in the MM module that are maintained at the company code level?
Answer: A company is an organizational unit for which individual financial statements are drawn per the relevant commercial laws. A company consists of one or more company codes. Within a company, all company codes must use the same transactions in addition to the same fiscal year breakdown; however, company code currencies can vary.

A company is different from a client because a client can itself be a company or an organization that has multiple companies. For example, the owner of the entire SAP system is a client. The system will have only one operational client, but the client may further have a group of companies.

43. What are the Features of SAP ERP?
Answer: SAP is an enterprise resource planning software which is produced by the German corporation. SAP is an enterprise information software that was basically designed to manage resources, information, and activities that are required to complete business processes like procurement and managing orders, billing of orders and management of human resources.

44. What do you mean by special stocks?
Answer: Special stocks are stocks that are managed differently as these stocks did not belong to the company and these are being kept at some particular location.

45. How stock is being transferred from one plant to another plant?
Answer: Stock within plants is transferred with the help of stock transport order. One plant orders the goods internally from another plant(receiving plant/issuing plant) with the help of stock transport order.

46. What is the use of Purchase Info Record?
Answer: Purchasing info record stores information on material and vendor supplying that material. For Example Vendors, the current price of a particular material is stored in info record.

47. What is an RFQ and how it is different from a quotation?
Answer: I am a text block. Click the edit button to change this text. Lorem ipsum dolor sits amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper Mattis, pulvinar dapibus leo.

48. What are transactions that will cause a change in stock?
Answer: Goods receipt and goods issue will cause a change in stock as goods receipt will increase warehouse stock and goods issue will decrease warehouse stock.

49. What do you mean by consignment stock?
Answer: On Consignment, the material is ready at our store proofs, but, it still goes to the vendor (seller)/Owner of the stuff. If you employ the material from consignment stocks, later you have to pay to the vendor.

50. What is invoice verification?
Answer: Once goods are obtained from the vendor and stored in the company’s premises by goods receipt suddenly we require paying to a vendor for obtained goods and assistance. The price to be given simultaneously with details of material is presented by the vendor in the form of the report that is known as an invoice. Before returning to the vendor we need to check the invoice. This method of validating invoice and paying to a vendor is identified as invoice verification.

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