Question 210. What Is The Difference Between Blanket Purchase Order And The Service Order?
The blanket purchase order is used for consumable materials, such as office paper with a sort text. In case of blanket purchase order, no Good Receipt (GR) is required for the purchase order. In framework order, the document type is used for purchase order and GR and Service Entry (SE) are required for purchase order.
Question 211. What Is Price Comparison?
Price comparison is used to compare quotations from different vendors. You can use transaction code ME49 to perform a price comparison between different vendors.
Question 212. What Are The Document Types Used In SA?
The document types used in SA are:
LP for standard scheduling agreements
LT for stock transport scheduling agreements
LPA for scheduling agreements with release documentation
Question 213. What Are The Document Types Used In Contract?
Answer: The document types used in Contract are:
Question 214. What Is A Contract?
A contract is an agreement between a customer and a vendor that states that the vendor will supply material to the customer at an agreed price for a specified period of time. It can be based on either a total quantity or a total price. A contract avoids the need to create a new purchase order each time the material or service is required.
Question 215. What Are The Different Types Of Contracts?
A contract can be one of the following two types:
Quantity contract — in this type of contract, the purchasing department agrees with the vendor for supply of a specified quantity of material, or services.
Value contract — in this type of contract, the purchasing department can limit the total spending for a material with a vendor. The release orders are valid only till the total spending for the value contract equals the total agreed upon value.
Question 216. What Is The Difference Between A Scheduling Agreement And A Contract?
A scheduling agreement contains the details of a delivery schedule whereas a contract contains only quantity and price information and does not contain any details of specific delivery dates.
Question 217. What Is The Difference Between Release Procedure In Internal Documents And External Documents?
The release procedure differs for internal and external documents. The internal document and the purchase requisition can be released either at the item level or at the header level. Additionally, the internal document can be released ether with classification or without classification. The external document, such as the purchase order or the request for quotation, can only be released at the header level by the classification method.
Question 218. What Are The Main Documents Used In Mm?
The following are the main documents used in MM:
Question 219. What Are The Various Steps Of The Mm Cycle?
The following are the different steps of the MM cycle:
Assign material to vendor
Procure raw material by using purchase requisition
Locate vendor for certain material
Process goods receipts
Goods issue, and
Question 220. What Is The Definition Of Procurement?
Procurement can be defined as the purchase of goods or services at the best possible total cost in correct amount and quality. It is the process of acquiring goods and services that covers both acquisitions from third parties and from in-house providers.
Question 221. What Is An Account Assignment Category In A Po Document?
The Account assignment category field plays an important role in the purchasing documents. It contains many control functions that help to determine the objects that are charged in case of an ordered material. The ordered material must be procured for direct usage or consumption. With the help of account assignment category in the purchasing documents, the cost of the material can be allocated to a single Controlling object or it can be allocated among various Controlling objects.
Question 222. What Is The Difference Between A Purchase Order And Purchase Requisition?
A purchase order is a document type that gives notification about formal requests for materials or services from an outside vendor or plant. A purchase requisition is a document type that gives notification about the need for materials or services.
Question 223. What Is The Creation Indicator?
The creation indicator defines whether or not the planned orders, purchase requisitions, or schedule lines must be created for materials that are procured externally. It also defines whether or not MRP lists need to be created.
Question 224. Define Automatic Generation Of Purchase Orders From Purchase Requisitions.
The SAP system can automatically convert purchase requisitions into purchase orders. This task can be performed either online or in the background. In the process of conversion, the SAP system attempts to merge as many purchase requisition items as possible to form one purchase order. Automatic processing of conversion of purchase requisitions to purchase orders is recommended only in the case when you have a well-maintained SAP system, else manual processing is advised.
Question 225. What Is Quotation?
Quotation is offered by a vendor to a purchasing organization that contains the details regarding the supply of materials or performance of services subject to specified conditions. A quotation is a legal document that binds the vendor for a certain period. The quotation is created by the vendor in response to a request for a quotation issued by a purchasing organization. A quotation consists of all the details, such as the total quantity and delivery date of a material or service offered.
Question 226. What Is Request for Quotation (rfq)?
A request for quotation (RFQ) is a document sent to a vendor by a purchasing organization and the vendor sends quotations with prices in response. An RFQ consists of two parts:
RFQ header— Contains general information, for example, the name and address of the vendor
Items — Contain information about the total quantities and delivery dates for the materials or services specified in the RFQ
Question 22: How Rfqs And Quotations Are Processed In Sap?
The RFQs and quotations are processed in the following manner in SAP:
1. RFQ is created either manually or by using an already existing RFQ, requisition, or outline purchase agreement by the company.
2. Company creates the list of vendors who are to receive the RFQ. For this purpose, a separate document is created for each vendor.
3. Company enters the prices and conditions set out in the quotation submitted by the vendor into the RFQ document.
4. Company carries out a comparative appraisal of all of the vendor quotations by means of the price comparison list. The quotations given by each vendor are compared item by item. The mean value quotation represents the average value of the individual quotes.
5. Company enters the most favourable quotation in an info record and sends rejection letters to the other unsuccessful bidders.
6. Finally, company monitors the status of follow-on activities related to the RFQ and quotation (e.g. a contract is set up or a purchase order issued).
Question 228. What Are The Ways A Rfq Can Be Created?
RFQs can be created in either of the following ways:
Using manual approach — Data for an RFQ is entered manually for the materials for which you wish prices to be quoted.
Using copying approach — An RFQ is copied from an existing RFQ.
Using referencing approach — An RFQ is created by using reference requisitions or an outline purchase agreement.
Using automatic approach — An RFQ is created automatically by using a requisition.
Question 229. What Are The Rfq Types?
The RFQ type is a two-character field used in the configuration of RFQ document types. It helps the company to differentiate between the different types of RFQs that they can send out.
Question 230. List The Important Key Fields For Rfq?
Answer: Different important key fields for RFQ are as follows:
RFQ Document Number
Default data for Items
Validity Start/Validity End
Reference Data or RFQ Item detail
RFQ Delivery Schedule
Question 231. What Is Rfq Delivery Schedule?
RFQ delivery schedule refers to the information entered by the purchaser that comprises date, time, and amount required on that date. You can access the delivery scheduling screen by pressing the SHIFT+F5 key combination from the keyboard in the SAP interface.
Question 232. How Will You Release A Rfq?
Follow this navigation path to release a RFQ: SAP Menu -> Logistics -> Materials Management->Purchasing->RFQ/Quotation->ME45-Release. A screen appears; enter all the information in the screen and the RFQ is released based on the information entered.
Question 233. How Can the List of Vendors Be Found to Send a Request for Quotation (rfq)?
You can use the information record to find the list of the materials to find out the vendors from whom the goods have been purchased in the past. Thereafter, the request for purchase requisition is issued. Alternatively, you can go for a source list.
Question 234. What Is The Purchasing Document Category For Rfq?
The Purchasing Document Category for RFQ is the single character A, and for other documents such as for Purchase Orders, the category is F, for Contracts it is K, and for Scheduling Agreements it is L.
Question 235. What Is The Role Of The Confirmation Control Key?
The confirmation control key is used to specify whether or not a notification for shipping is expected PO item.
Question 236. What Is Purchasing Document?
A purchasing document is a document type used by the purchasing department to procure materials or services.
Question 237. Name Some Of The Data Points Provided By Purchasing For The Materials.
Some of the data points provided by purchasing for the materials are Base unit of measure, purchasing group, remainder days, shipping instructions, and tolerance levels, GR processing time, critical part, and JIT schedule indications.
Question 238. How Does The Sap System Differentiate Between Purchasing Documents?
Document type is the unit to differentiate between different kinds of purchasing documents in the SAP system. Each document consists of a unique number, which determines the significant number range and the fields that are offered to you for data maintenance purposes.
Question 239. How Are Purchasing Documents Numbered?
In the SAP system, each document is assigned a unique number. These numbers can be alphanumeric also. You can assign these numbers in two ways, either internally or externally, depending on the policy of your company or enterprise. An internal number depicts that the SAP system assigns the number automatically, whereas an external number depicts that the person creating the document must supply manually. Alphanumeric assignment of numbers is only possible in the latter case.
Question 240. Can A Line Item In A Purchase Order Be Blocked After It Has Been Created?
Yes, a line item in a purchase order can be blocked after it has been created. Blocking a line item stops acceptance of any goods receipts related to that line item.
Question 241. What Are The Account Assignment Categories In A Purchase Order?
SAP provides you with a number of account assignment categories that you can use for a purchase order. An account assignment category indicates the account assignment details that are required
Question 242. Can Multiple Accounts Be Assigned To A Purchase Order Line?
Yes, you are allowed to assign multiple accounts to one purchase order line. Multiple account assignments may be required in a situation where the cost of the item to be purchased is divided among multiple people.
Question 243. What Are The Different Types Of An Item Category?
An Item Category is a field in purchase requisition that specifies the category of purchase requisition. The following are the different types of Item Categories:
Question 244. What Is Service Procurement?
Service procurement consists of activities, such as bidding, contract management and operational procurement processes from requisition to payment.
Question 245. What Is The Difference Between Procurement For Stock And Procurement For Consumption?
In procurement for stock, when you order a material, the system does not require an account assignment because the posting to the appropriate stock and consumption occurs automatically every time the transaction related to goods takes place.
In procurement for consumption, you need to enter the account assignment (such as cost centre) that specifies the purpose of consumption. On the receipt of goods, the material or service is shown as it has been consumed.
Question 246. What Is The Difference Between External Procurement And Internal Procurement?
In the external procurement, the procurement of raw material, trading goods, and services is made from the external supplier for the organizational units of an enterprise that need such items or services. In the internal procurement, the procurement of raw material, trading goods, and services is made from an organizational unit of an enterprise for other organizational units of the same enterprise that needs such items or services.
Question 247. What Is A Document Type?
A document type is used to differentiate between different kinds of purchasing documents. In other words, different purchasing documents are distinguished on the basis of their document types. Document types are defined for RFQs, purchase orders, and contracts.
Question 248. What Are The Ways Of Converting Planned Orders Into Purchase Requisitions?
You can convert the Planned Orders into Purchase Requisitions either by converting them individually or by collectively converting all the planned orders.
Question 249. What Transaction Code Is Used to Convert Planned Orders (po) Into Requisitions in Material Requirement Planning (mrp)?
The OPPR transaction code is used to convert Planned Orders (PO) into requisitions in Material Requirement Planning (MRP).
Question 250. Can You Add Custom Fields To Purchase Order(s) And Request For Quotation (s)?
Yes, you can add custom fields to a Purchase Order and Request for Quotation.
Question 251. How Is Framework Order Different From Standard Po?
Framework Order (FO) is a purchasing document used for procuring materials or services. This type of purchase order has an extended validity period instead of a stipulated delivery date as in case of the Standard Purchase Order (PO).
Question 252. What Document Type Can Be Used In Case Of Service Procurement?
The service procurement is used by the organizations to procure the services or part of the services. It consists of activities, such as bidding, contract management, and all the activities from requisition to payment.
Question 253. What Do You Mean By Using Multiple Account Assignment In A Po?
Using multiple account assignment in a PO allows you to apportion the cost associated with a PO item. When you use the multiple account assignment, the account assignment data takes the form of individual account assignment items.
Question 254. How Is The Sto Different From The Standard Po?
In STO, UB document type is used and it also requires a supplying plant for the movement of materials, whereas in the standard PO, NB document type is used and requires a vendor for the procurement of material.
Question 255. How Can We Return A Material That We Have Received With Reference To A Po?
In case of external vendor, when your company returns a good, received with reference to a purchase order, the reference of the PO is not mandatory to post the return in the system. The system just posts a goods receipt correction and issues to a credit memo against the vendor. However, if the vendor is internal, you may require the reference of the PO. In this case, the system automatically updates the stock, without any internal billing.
Question 256. How Are Free Items Managed In A Po?
Mark the item as FREE in the Purchase order. The price for such PO items will be zero.
Question 257. Which Documents Are Used As References When We Create Po?
At the time of creating PO, we take the reference of Purchase Requisition, Request for Quotation, and any other Purchase orders. However, it is not necessary to take the reference of these documents as most of the values are automatically taken by the SAP R/3 system.
Question 258. What Is the Transaction Code to Set Price Control for Receipts (goods/invoice)?
The transaction code OMW1 is used to set price control for receipts (goods/invoice).
Question 259. What Is The Difference Between Quantity And Value Contracts?
Quantity Contracts— when the total quantity to be ordered is known in advance during the validity period, the quality contract is used. This contract is considered as fulfilled when totalling of release orders of a given quantity has been issued.
Value Contracts — when the total value of the release orders does not exceed a definite and predefined value, the Value contract is used. The contract is considered as fulfilled when totalling of release orders of a given value has been issued.
Question 260. What Is A Centrally Agreed Contract?
A centrally agreed contract type is created without specifying the name of the plant. The plant specification is provided at the time of creating the contract release order. In centrally agreed contract, different conditions for individual plants can be maintained easily. Moreover, different ordering addresses or goods suppliers in the vendor master record can also be specified in this type of centrally agreed contract. The centrally agreed contract is useful in the enterprises that have a central purchasing department and the materials are required to be bought for different plants. In this case, they create a high-level contract used by the other department-specific purchase organizations within the enterprise. The use of such centrally agreed contracts usually results in more favourable conditions of purchase and helps maintain consistency in process of purchasing throughout the enterprise.
Question 261. List The Important Fields Of A Service Master Record?
The important fields of a Service Master Record are as follows:
Service number— defined for external or internal numbering of the service
Service Category— Distinguishes between the types of services
Descriptive text— contains a short or long description of the service
Base unit of measurement— contains the unit in which you can measure the service
Material/Service group— allows the service to be selected for grouping purpose
Valuation class— finds the general ledger accounts that are related with the service
Question 262. What Is a Standard Service Catalog (ssc)?
A Standard Service Catalog (SSC) is a general standardized catalog that contains the detailed explanation of services. The descriptions of these services are stored as master records and help to remove data duplication.
Question 263. How Can Services Be Purchased?
The services can be purchased by first creating a document in system which forms the base of the purchasing process. This document can be a purchase requisition, an RFQ, or a purchase order. Now, determine the possible sources that can provide the service. For this, you can either select a new service or a service that has been previously used. If the service is requested for the first time, a bid invitation process is started. In the bid invitation process, you first need to create an RFQ and then record the incoming quotations in it. The best quotation is determined based upon certain factors, such as price, warranty period. The order is then placed to the successful bidder who receives either a standard purchase order or a release order issued against an existing contract.
Question 264. What Is A Service Entry Sheet?
A service entry sheet is a transaction in which the data related to the service that has been ordered is recorded using a purchase order. You can use the ML81N transaction code to locate the service entry sheet. You can also locate the service entry sheet by using the following path: SAP menu->Logistics->Materials Management -> Service Entry Sheets Maintain.
Question 265. What Is A Blanket Purchase Order? How Can It Be Created?
A purchase order that has a validity period and contains a simple process of procuring materials or services is referred as a blanket purchase order. For creating a blanket purchase order, use the ME21 or ME21N transaction code.
Question 266. In What Cases Item Category M (material Unknown) And Item Category W (material Group) Can Be Used in Contract?
The Item category M is used when the material issued is unknown. The item category W is used when the value and quantity of material are unknown.
Question 267. How Can We Create A SA In Sap?
You can create a Scheduling Agreement (SA) in SAP either manually or by using the referencing techniques. To create a SA manually, you have to enter all the information on scheduling agreement manually. You can even use reference documents from where you will copy the information related to the scheduling agreement. These reference documents can be Purchase requisitions, Request for Quotations, and centrally agreed Contract.
Question 268. What Are Schedule Lines?
Schedule Lines — The Schedule lines are generally created adjacent to the schedule agreements. For example, you have a material that is procured through a subcontract and you are required to ensure the delivery of this material on specific days. For this, you can create a schedule line for the schedule agreement of that material. In the source list of the schedule line, you have to provide information regarding the vendor and schedule agreement along with the validity dates of delivery and also specify the agreement, which is relevant for MRP.
Question 269. What Is Tax Code?
The tax code defines how the tax will be calculated and posted in SAP R/3 System. Each item on which the tax is applicable is allocated to a tax code. The R/3 System reads this tax code for each item and calculates tax for it. This tax and tax code is a part of Purchase order.
Question 270. What Is Material Requirement Planning (mrp) In Sap?
Material requirement planning guarantees the procurement and production of the required quantities of materials on time. The MRP helps a company to determine which materials are to be produced and in what quantity they are to be produced.
Question 271. List The Types Of Mrp?
The three types of MRP are as follows:
Reorder-point planning — in this type of MRP, the procurement starts when the existing stock and the receipts fall below the reorder point.
Forecast-based planning — in this type of MRP, the forecast values and the future requirements of the material is decided by the forecasting program.
Time-based planning— in this type of MRP, the date of the planned requirement should match with a known date, such as the date when the vendor delivers. If the vendor delivers the material on the same date, then you can start the planning procedure from that date itself.
Question 272. What Is An Mrp List?
The MRP list is a static list which is the initial working document for the MRP controller to start working from and contains the planning result information for a material.
You can access the MRP list for an individual item by using the MD05 transaction code. You can also access the MRP list by using the following navigation path: SAP menu->Logistics-> Materials Management->MRP->Evaluations->MRP List – Material.
Question 273. What Is the Difference between Material Requirement Planning (mrp) And Consumption- Based Planning?
MRP and Consumption-based planning are two types of SAP planning used to determine a product’s requirements. When you plan materials by using MRP, you need to plan the materials requirement based on Sales and Operations Planning (SOP). When you follow the consumption-based planning approach to plan the materials, you need to plan the future demand of the product. This can be done by using the historical demand of materials.
Question 274. What Important Values Are Used To Define The Reorder Point?
The following important values are used to define the reorder point:
Replenishment lead time
Question 275. What Is A Procurement Proposal? What Are The Types Of Procurement Proposal?
Procurement proposals are created by the system and are based on the settings defined by the purchasing department. They help in ascertaining the required materials.
The different types of procurement proposals are:
Purchase requisitions: Required for a material that is procured externally.
Schedule lines: Required when a material is procured externally and the material has an identifiable source and scheduling agreement.
Planned orders: Required for materials that are procured internally.
Question 276. How Is The Automatic Purchase Order Generated After Creation Of Pr By Using A Particular Material?
You need to maintain the source list and select the source list indicator record. In case of more than one source code list, one of them is fixed. You then need to run the MRP. As a result, a purchase requisition is generated with the pre-assigned list of the supply source. Lastly, the ME59 T-code is entered for automatic creation of purchase order from the purchase requisition.
Question 277. What Is Forecasting In Sap System?
Answer: Forecasting is a future prediction which is an uncertain process. Most business decisions are based on forecasts, such as decision of material requirements. While making business decisions, forecasts are continuously needed. The impact of the forecast on actual results is first evaluated and the initial forecasts are updated and then accordingly the decisions are modified.
Question 278. Can Forecast Model Be Selected Automatically?
The forecast model can be selected automatically by entering the value J in the Forecast Model field in the Material Master record where the value J is used for Automatic Model Selection.
Question 279. What Do You Mean By Forecast-based Planning?
Forecast-based planning is a process used in consumption-based planning which depends on predictions of future requirements calculated on the basis of forecast.
Question 280. What Are The Different Types Of Forecast Model?
The following are the different types of forecast model:
Question 281. Define Time-phased Planning.
Time-phased planning is an MRP procedure, where materials are planned to be delivered in a particular time interval. In the time-phased planning technique, there is a planning file that contains an MRP date to plan the delivery of materials. When the material master is created and is reset for each running plan, then MRP date is set. If you need to plan the delivery of a material earlier than the specified MRP date, you can enter an MRP date while running the plan. For example, if the running plan is set to Wednesday, you can get it forwarded to Monday.
Question 282. Define The Planning Process Flow.
The planning process flow describes the business process and the technical system process that are involved in CBP. The system accomplishes the following partial processes in the planning run:
1. The system first checks the planning file entries and also checks whether or not the material is changed in the planning run.
2. The system accomplishes a net requirement calculation for every material. It checks whether, or not the requirement quantity is covered by available warehouse stock.
3. After carrying out a net requirement calculation for every material, the system then carries out the log-sizing calculation.
4. The scheduling is done for the start and finish dates of the procurement proposals.
5. The system determines the type of procurement proposals and creates planned orders, purchase requisitions, or schedule lines for the materials.
6. The system creates exception messages and accomplishes a rescheduling check to recognize critical situations of the planner that has to be processed manually in the planning results.
7. The system also computes the actual days’ supply and the receipt days’ supply of the materials.
Question 283. What Is The Condition To Create The Planned Orders?
The condition to create planned orders is that the system creates an internal procurement proposal and then planned orders are created. In the case of vendor procurement, a planned order is created by the MRP Controller.
Question 284. What Is the Transaction Code to Convert Planned Order into Purchase Requisition (pr)?
MD14 is the transaction code to convert planned order into PR.
Question 285. What Is Total Planning?
The planning of all materials that are related to requirement planning is known as total planning. It includes the Bill of Material (BOM) explosion for the materials. The total planning can be used for a single plant. It can also be used to control the total planning run for multiplant. Total planning can be used in the following areas:
Several plant areas
One MRP area
Several MRP areas
A combination of plants and MRP areas
Question 286. Define Planning Time Fence.
The fence, which protects the master plan from automatic changes in the master plan items, is called the Planning Time Fence. The system does not create or update the order proposals for the planning time fence during the planning run. It dynamically calculates the end date of the planning time fence beginning from the planning date. The planning time fence is used for materials planned in MRP, master schedule items in master production scheduling, and materials in long-term planning.
Question 287. Give An Overview Of Inventory Management In Sap System?
Inventory management in SAP system helps in recording and tracking of stocks of materials. It also involves planning and documentation of all goods movements.
Question 288. What Tasks Are Covered Under Inventory Management?
The inventory management is an important part of the material management. The optimal inventory management not only ensures the uninterrupted supply of the material at the required time, but also prevents wastage of the items. The material management covers the following tasks:
Material stock management
Planning, entry and documentation of goods transfers from/to the inventory
Physical stocking of items
Question 289. What Is Physical Inventory?
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 regulating taxes by placing an accurate value on the inventory.
Question 290. What Are The Initial Configuration Steps For Physical Inventory?
The steps for the purchase acquisition are as follows:
Defining the default values for physical inventory document
Reporting batch inputs
Recording tolerances for physical inventory differences
Inventory sampling as well as configuration of cycle counting
Question 291. With Which Modules In Sap Is The Inventory Management Integrated?
The inventory management is an important constituent in the SAP MM module. The business activity of an organization revolves around the inventory of materials that serves as the input for the manufacturing process or the inventory of prepared goods for delivery or selling. The material is purchased from the concerned vendors on the basis of request from the Material Requirement Planning (MRP) module. The delivered items are recorded in the inventory management as the goods receipt. The material are then stored either for delivery to the customer or for manufacturing processes. Inventory management is integrated with other modules, such as FI, SD, PP, PS and QM.
Question 292. How Is The Inventory Management Integrated With Mm?
The inventory management is directly linked with the material management module because any movement of goods to/from the inventory comes under the MM module. The material requirement planning, purchasing, and invoice verification are some of the MM components that are also linked with inventory management. After the ordering of the material 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.
Question 293. What Are The Initial Configuration Steps For Inventory Management?
The steps for the inventory management are as follows:
Defining plant parameters
Defining system message attributes
Defining Number Assignment
Defining good issue, transfer posting, screen layout
Maintaining copy rules for reference documents
Setting up dynamic availability checks
Confirmation of the negative items
Question 294. What Is Goods Movement? What Type Of Documents Is Created After Goods Movement?
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 goods movement, the SAP system creates two types of documents: material document and accounting document.
Question 295. Why Is Goods Receipt Important To A Company?
Goods receipt indicates a receipt or inward movement of stock of materials or goods. When an external vendor provides stock to the company, the goods receipt is generated as a purchase order and when the material is produced in-house, the goods receipt is generated as a production order. A goods receipt is important to a company as using a goods receipt moves material into stock, updates the stock levels, and thereby indirectly enables the production process.
Question 296. How Do You Post The Goods If The Po Number Is Not Known?
If the PO number is not known, you must enter the search criteria for the PO in the initial screen. As a result, the list of purchase orders is displayed. The desired PO items can then be copied.
Question 297. How Can A Goods Receipt Be Posted When Purchase Order Number Is Unknown?
If the goods receipt does not have a purchase order, some companies do not accept the goods receipt and refuses to accept the delivery. On the other hand, other companies accept the delivery of materials and keep the materials into the quality or blocked stock till the situation is resolved. For obtaining the goods receipt without a purchase order number, the companies use the MIGO transaction. After entering the required details of the material, the goods receipt is posted and the material becomes a part of the plant stock.
Question 298. How Do We Receive Goods From Production?
The goods from the production can be posted either to the warehouse or consumption. They are posted with the same movement type.
Question 299. How Can The Logical Value For The Stock Items Be Found?
You need to use the MC49 transaction code to find the logical value of the stock items by date.
Question 300. What Are The Ways Of Receiving Goods?
The goods can be received as per the reference to inbound delivery. The following are the different ways of receiving the goods:
Transport ID code
Question 301. What Is Movement Type?
While implementing the goods movement in an organization, the movement type is required to be entered. It is a three-digit identification key that is entered as per the movement type. The following are the common movement types that are used in SAP:
102: Goods that are receipt against a purchase order
201: Goods that are issued
321: Goods released from quality inspection stock
Question 302. What Does A Movement Type Control?
The movement acts as a controlling factor in inventory management. It handles the following activities:
Updating of quantity
Updating of consumption and stock
Displaying of particular fields in a document
Question 303. List The Movement Types For Unplanned Goods Received?
The following are the movement types used for unplanned goods received:
Question 304. How Will An Item Be Returned To A Vendor?
While posting the goods to the goods receipt in the purchase order, you need to enter the items that can be returned to the vendor. There is no need to explicitly reference the purchase order.
Question 305. What Is Goods Issue Reversal?
The process of issuing the material back to the stock of material is known as a goods issue reversal. For example, if goods issued to the production order are 500 kg of material and only 300 kg is consumed, then the rest 200 kg is returned to stock.
Question 306. Name The Documents That Are Created When A Goods Issue Is Posted?
The following documents are created when a goods issue is posted:
Goods issue slip
General ledger account changes
Question 307. What Are The Different Ways Of Stock Transfer?
A stock transfer can be made physically or logically. In other words, when you move material from one storage location to another it is said that the stock transfer is done physically. Whereas when you move stock from the quality inspection status to the unrestricted status, it is said that the stock transfer is done logically. The different ways of stock transfer are as follows:
From storage location to storage location
From plant to plant
From company code to company code
Question 308. What Is Transfer Posting?
The physical and logical stock transfers are collectively called the transfer posting. The stock transfers typically change the stock type, batch number, or material number. The transfer posting is related to the documentation of the stock changes resulting from a stock transfer.
Question 309. How Is Stock Transfer From One Storage Location To Another Done?
The stock transfer from one place of location to another place of location is carried out in a plant. The posting of this kind of transfer is done without entering the value of the stock material as the management of the items is done within the same plant.
Question 310. How Is Stock Transfer From One Plant To Another Plant Done?
The transfer of the stock from one plant to another is a bigger activity as compared to transfers done under the same plant. The material planning as well as accounting details is affected in case of the transfer of goods within a plant. In case of plant to plant transfer, the accounting data of the two stocks is affected if they are assigned to different valuations. In other words, if there are any changes in the value of the stock items from the source plant to the destination plant, the accounting entries need to be adjusted accordingly. In this case, the stock value and G/L accounts need to be updated. The materials planning are also affected, because the stock transfer is scheduled and implemented according to the guidelines in materials planning. The plant to plant stock transfer is done by one-step or the two-step procedure but only the one-step procedure can be planned with a reservation.
Question 311. How Is The Stock Transferred From Company Code To Company Code?
The stock transfer between different company codes is done in a way similar to that of inter-plant transfer, but differs in the company code. During the stock transfer process, two accounting statements are created, one for removal of stock from the source company and the other for receiving in the destination company.
Question 312. What Is A Stock Posting?
Stock posting is defined as a transaction, which occurs when you update an item quantity in the system, for example, updating the database after goods issue or goods receipt.
Question 313. What Do You Mean By Physical Inventory?
Physical inventory is the recording of actual stock levels (quantities) of materials by counting, weighing, or measuring at a given storage location at a specific time.
Question 314. How Is the Value of the Cross-company-code Stock Displayed?
You need to perform the following steps to display the value of the cross-company-code stock in transit:
Select Environment-> Stock-> Stock in transit.
Question 315. What Is Returnable Transport Packaging (rtp)?
Returnable transport packaging is a medium used to transport goods between vendors and customers. Once the goods are received, the returnable packaging is returned to the vendor. The best example is the crate for cold drinks; it needs to be returned back after receiving the cold drinks.
Question 316. What Is Sales Order Stock?
The stocks assigned to a sales order but still available in the company premises is called the sales order stock.
The raw material ordered by the customer for processing a specific order and finished goods are the type of materials that come under the category of sales order stock.
Question 317. What Is Project Stock?
The stock available in the company premises to execute a project is called the project stock. It is allotted to a work breakdown structure element and is specific to the project only. All accounting treatment in MM is done for the specific project head.
Question 318. What Is Invoice Verification?
Invoice verification is used to store details of vendor invoices and forms an important part of purchasing and inventory management. It consists of entering invoices and credit memos, checking accuracy of invoices in accordance to price, and checking block invoices.
Question 319. What Are The Different Types Of Invoice Verification?
The different types of invoice verification are as follows:
Invoices based on purchase orders
Invoices based on goods receipts
Invoices without an order reference
Question 320. Name The T Code For Invoice Verification?
An invoice is verified by using the OLMR T code.
Question 321. How Do You Perform Invoice Verification?
Invoice verification is a process of checking the accuracy of an invoice in terms of the quantity, price, and other related information. The invoice can be issued for several processes. For example, if an invoice is issued for a purchase order, then the system checks for the relevant information, such as vendor, material, quantity, delivery date, and payments details.
Question 322. Define Ers?
ERS stands for Evaluated Receipts Settlement. It refers to the process of settling down receipts of the goods in an automatic manner. In this process, an agreement is made between the vendor and the user that vendors do not prepare any invoice for the goods ordered. Rather, the system would automatically generate and post the invoice document on the basis of purchase order and receipts of goods. In addition, ERS also offers the following advantages:
Using ERS, all the purchasing transactions are quickly closed.
Errors of communication are avoided.
Invoice verification is not prone to price and quantity variances.
Question 323. With Reference To Which Documents Can Invoice Verification Be Done?
In SAP, invoice verification is done on the basis of the following:
Document date, purchase order number, invoice amount, tax amount, and terms of payment (if required)
Purchase order that comprises vendors, terms of payment (if required), currency, and invoice items
Purchase order history that comprises quantity and amount
R/3 system settings that comprise the rate at which the tax is calculated
Vendor master record that comprises bank information
Question 324. What Are The Benefits Of Document Parking?
The benefit of document parking is that you can modify the invoice in a parked status whereas the invoice that is placed on hold cannot be modified.
Question 325. How Do You Display The Parked Document?
You can display the parked documents by using either FB03 or FBV3. The FB03 transaction code displays all the posted documents; whereas, the FBV3 code shows only the parked documents that have not been posted to the expenditure balance.
Question 326. What Is Stochastic Block?
Stochastic Blocking is the process of checking the incoming invoices. In this process, blocking of the invoices is done randomly. Invoices with high value have the highest probability to get blocked. It is set for the whole invoice instead at the item level. When posting of the invoice is done, an R is set in the Payment Block field in the document header data.
Question 327. What Are The Different Accounts Used In Invoicing?
Different accounts used in invoicing are as follows:
GR/IR clearing accounts
Tax account Price differences account
Cash difference clearing account
Freight clearing account
Question 328. What Are The Different Types Of Variances In Invoices? Describe Them.
The different types of variances in invoices are listed and described as follows:
Quantity Variance— if there is a difference between the quantity mentioned in the invoice and the quantity delivered.
Price Variance— if there is a difference between the prices mentioned in the invoice and in the purchase order.
Quantity and Price Variance—if there are differences in both the quantity and price.
Order Price Quantity Variance — if there is a difference between the prices per ordered quantity, such as $50 per piece is mentioned on the purchase order but the invoice contains $60 per piece.
Question 329. Why Does The Invoices Get Blocked?
Invoices can be blocked due to the following reasons:
Variance in the invoice item
Amount of an invoice item
Question 330. What Happens When An Invoice Is Blocked? What Are The Different Ways To Block An Invoice?
When an invoice is blocked, the invoice amount cannot be paid to the vendor. Blocking an invoice also blocks the individual items. The different ways to block an invoice are listed as follows:
Stochastic or Random Block
Block due to Amount of an Invoice Item
Block due to Variance of an Invoice Item
Question 331. How Can We Post An Invoice Directly Without Any Reference?
In case of invoices posting without a reference, proposed values for the invoice items are not displayed by the system, because the system does not determine any purchase order items and posted goods receipt for the invoice. As a consequence, information related to the accounts changed by the offsetting entry for the vendor line item, is not found in the database of the system.
Question 332. What Is the Menu Path to Create a Document/e-mail Notification for Your Supplier?
The following is the menu path to create a document/e-mail notification for your supplier:
Select Material Management-> Logistics Invoice Verification -> Message Determination.
Question 333. What Is The Difference Between Gr-based Iv And Po-based IV?
GR-based IV means Goods Receipt based Invoice Verification. In this process, each receipt of the individual goods is invoiced separately.
On the other hand, PO-based IV means Purchase Orders based Invoice Verification. In this process, all the items that are in the purchase order list are arranged and are placed together. It is not taken into consideration whether the item is received in a single delivery or multiple deliveries. After all the items are collected, these items are then posted in the form of one single item.
Question 334. How Do You Create The Vendor Account Group?
Perform the following steps to create the vendor account group in SAP:
Select Display IMG->Financial Accounting->Account Payable/Receivable->Vendor Accounts-> Master Records-> Preparation of Creating Vendor Master Records->Define Accounts Groups with Screen Layout /Define Screen Layout Per Activity.
Question 335. What Is The Purpose Of Material Valuation?
Material valuation in SAP MM module is necessary to determine the stock value of materials.
Question 336. How to Determine Stock Value?
The stock value of the materials is calculated using the following formula:
Stock value = Stock quantity * Material price.
Question 337. How Material Valuation Is Associated With Financial Accounting?
Material valuation in MM module is associated with Financial Accounting as any change in the stock value also updates the G/L account in Financial Accounting.
Question 338. What Are the Factors Controlling Material Valuation?
The factors that control material valuation are:
1. System settings
2. Material master record
Question 339. What Is Valuation Area?
Valuation area is the organizational level at which the material valuation is carried out.
Question 340. Define Valuation Class?
Valuation class is a group of different materials that share some common properties. This group is defined so that you do not have to manage a separate account for each material.
Question 341. What Is The Significance Of Account Assignment Category?
Account assignment category determines the account assignment details that are required for the purchase order item, such as cost center or account number. It is useful in SAP MM as it helps in determining the following:
1. The type of account assignment
2. The accounts that will be charged when you post the invoice or goods receipt
3. The account assignment data that you should provide
Question 342. What Are The Different Types Of Account Assignment Categories?
The different types of account assignment categories are:
Single account assignment: Specifies one account assignment for an item in the purchase order
Multiple account assignment: Allocates the costs associated with the purchase order item
Question 343. What Is LIFO Valuation?
LIFO is a balance sheet valuation technique. It stands for last in-first out principle, i.e. the material added to the stock in last is valuated first. In this technique, the pricing of old material in stock is not affected by the pricing of new material. In this technique, a layer of stock increased or decreased is created for a fiscal year, on the basis of which the valuation is done. For example, if the stock is increased then a layer is created for that stock. However, to use the LIFO, you have to configure it.
Question 344. What Is The Release Procedure?
The release procedure allows you to create condition records for the planning process. It is used to creating Purchase Requisitions (PR), Purchase Orders (PO), and Request for Quotation (RFQ), Outline Agreements, and Service Entry Sheets.
Question 345. What Is Release Strategy? How Many Release Points Can Be Involved In A Release Process?
The release strategy specifies the release codes with which a purchase document must be released and the sequence in which the release must be used. You can define a maximum of eight release codes with their respective release strategies. You can involve 8 release points in a release process.
Question 346. Can You Release the Po Item by Item When You Have a Multi Line-item Po?
you cannot release the PO item by item. PO can be released at the header level by using the with classification release procedure.
Question 347. How Are The Release Procedures For Pr And Po Defined?
The transaction codes ME54 and ME29N are used to define the release procedures for PR and PO, respectively.
Question 348. How to Release Blocked Purchase Documents?
You can release a blocked purchase document by using your release code. This process is called the release transaction. After you have released the document, you can also cancel the document using the same release code.
Question 349. How to Reject Approvals in Sap-r/3? Will It Affect The Sap Business Workflow?
You can use the ME54N transaction code or purchase requisitions and ME29N transaction code for purchase order to reject approvals in SAP R/3. This does not affect the SAP business workflow.
Question 350. How Many Procedures Are Available To Release Purchase Requisition?
There are two types of procedures available to release purchase requisition:
With classification: In this procedure, you can release the purchase requisition both at item level and in total.
Without classification: In this procedure, you can release the purchase requisition only at item level.
Question 351. How to Release Purchase Order? Which Transaction Code Is Used To Display As Well As Reset The Release Of Po?
You can release a purchase order at header level. You cannot release a single item in purchase order. You need to release all the items at a time. The ME29N transaction code is used to display as well as reset the release of purchase order.
Question 352. How Many Types Of Release Procedure Are Available For Po?
There are two types of release procedures available for PO:
Individual release: In this type of release procedure, you can release only one item at a time.
Collective release: In this type of release procedure, you can release all the items at a time but using the release code.
Question 353. What Is A Release Criterion?
The release criterion defines the strategy with which a purchase requisition or an external purchase document is released. The release criteria contains the characteristics and the values of the characteristics which determine the status of the document, that is, either blocked or not blocked (a characteristic can be the total value of the document, say greater than $100,000). The criterion can be based on any one of the following or a combination of these:
i. Account assignment category
ii. Material group
iv. Total value
Question 354. What Is Release Code?
The release code is a two-character field or ID that represents the person responsible for the approval of the release procedure.
Question 355. What Do You Mean By Release Group?
Release group is a two-digit code that is assigned with a class and contains one or more release strategies. For example, release group 01 is defined for purchase requisitions and release group 02 is defined for purchase order.
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