sap mm Interview Questions

SAP MM Interview Questions and Answers

Q.What is the difference between the stock transfer between two plants belonging to same company code and those belonging to different company code?

Answer: A stock transfer from plant to plant generally takes place within a company code. It can, however, also take place between two company codes, if the plants are assigned to different valuation areas, which belong to different company codes.

Unlike a stock transfer from storage location to storage location, a stock transfer from plant to plant affects both accounting and Materials Planning, as follows:

Accounting:Accounting is affected if both plants are assigned to different valuation areas. This means that a stock transfer leads not only to a quantity update but also to a value update (stock value, G/L accounts). Thus, parallel to the material document for stock transfer, an accounting document is created.

Materials Planning:Materials planning are affected because a change of plant stock is taken into account by Materials Planning

Q.What are the important fields in purchasing view?

Answer: RFQ/Quotation

Purchase requisition

Purchase order

Master data (Info record, Source list, Conditions, Vendors etc.)

Outline agreements

Q.What are the steps in automatic account assignment configuration?

Answer: Material type is assigned to A/c Cat Ref.; A/c Cat. Ref is assigned to Val. Class; Val. class assigned to G/L A/c.


OMWM : Activate Val. grouping Code

OMSK : Create A/c cat. ref and Val. Class; then A/c cat ref assigned to material type.

OMWD : Val. area (plant) assigned to Val. grp. code (0001)

OBYC : Assign Val. modifier (0001), New Val. Class and G/L A/c

Now create new material and assign new val. class in Accounting 1 data screen. Then create PO, GR.

Q.How do you create movement types? What are the steps involved? When will you recommend a new movement type?

Answer:  Transaction code is OMJJ

You can copy new movement type which is near-by old one.

When we go to new movement type, if there is no possibility to done transaction with old movement type.

Steps: 1) entry control data 2) short text 3) allowed transactions 4)help text 5)up date control data 6)account grouping 7)reasons for movement

Q.What is meant by access sequence? When it is used?

Answer: Condition type has an access sequence assigned to it which determines which tables to access for data and in what sequence. This has a sequence of table based on the most specific to most generic.

It can be used for any new condition type creation.

Q.How does the PO pick up the pricing schema?

Answer:  The pricing procedure assigned to a vendor has a calculation schema attached to it. This schema defines the various conditions pre-requisite, calculation & sequence in the PO. Generally, only one type of pricing procedure is followed for all the vendors.

Q.What are the steps involved in creating a pricing procedure?

Answer: To create a pricing procedure, the steps will be

Create Condition tables

Create access sequence by placing the different condition tables from most specific to the most general.

Create the condition types

Assign the Access sequence to the condition type

Create the pricing procedure

Place the all condition types in a sequential order as per the business requirement and pricing needs.

Q.What are the types of special stocks available?

Answer: Consignment stock – vendor

Components provided to vendor

Project stock

Consignment stock customer

Pipeline material

Orders on hand

Q.What are the types of info records?

Answer: Standard




Q.What is meant by consignment stock?

Answer: Consignment stock is the material which is lying in the premises but is not owned by the Vendor. It has no value assigned to it until it is taken into own stock. Once it is used in production or to be sold, it is taken into own stock.

Q.What are the steps involved in consignment cycle?

Answer: Consignment cycle is similar to a standard purchase cycle. The difference it that no accounting document is created at the time of goods receipts only qty is updated. It is settled once the same is utilized.

Q.Tell me about the subcontracting cycle.

Answer: When the material is sent for subcontracting i.e. some value addition, it is converted into a different material. It needs a BOM to define the components of the finished item being received.

Q.How is scrap accounted in subcontracting?

Answer: When the material is sent for subcontracting i.e. some value addition, it is converted into a different material. It needs a BOM to define the components of the finished item being received. The scrap or the process loss can be adjusted while doing a quality inspection of the material received after subcontracting.

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

Answer: products can be taken care of by defining them in the BOM.

Q.Tell me about the various movement types and usage.

Answer: 101 GR in unrest. Use

103 GR in Blocked stock

105 Release from Block to Unrest. Use stock.

122 Return to vendor from unrest. Use stock.

124 Return to vendor from blocked stock

301 Plant to Plant transfer.

309 Material to Material transfer

311 Transfer from stg loc to stg loc

261 Issue for consumption

411 Taking consignment stock into own stock

551 Withdrawal for scrapping

Q.What is meant by scales? Can scales be used in standard purchase order?

Answer:  By using scales we can fix the price of a material accordingly, for example, we can fix the material price.

Based on the quantity like

For quantity 1 to 100 price is Rs1000

For quantity 101 to 200 price is 900

Like that, you can fix price.

A scheduling agreement can be made for Consignment, Subcontracting & stock transfer. A contract, also known as a blanket PO, can be made for standard items and can be restricted to a Value or Qty.

Based on the calculation schema of that condition & based on access sequence assigned to it.

Condition type in the standard system: Non-deductible input tax = NAVS

Depending on the tax code in the PO item and the tax calculation schema, the system calculates the non-deductible tax portion and inserts it in the condition type with the category N.

The condition type has the calculation rule “absolute amount”.

Normally, the access sequence that regulates tax code determination is assigned to the condition type.

Q.What is the difference between a Purchase Requisition and a Purchase Order?

Answer: A PR is an internal document that sends  notification to purchase department when some material is service is required. PR can be generated by department that needs any material or service.

A PO is a document sent to vendor by purchaser which is an official request of mentioned material or services. POs are generally binding on purchaser, though it depends on terms and conditions mentioned in PO.

Q.What are different Info Records types?

Answer:  Different Info Record types are Standard, Consignment, Sub-Contracting and Pipeline.

Q.What is a consignment Stock?

Answer:  The stock supplied by the vendor is in the purchasing company’s premises but the company has no liability for the same.  The liability for the company will only arise one the goods are issued from the consignment stock for use. However, in this case, even before the use, purchasing company can check in system how much stock is lying in inventory.

Q.What is Sub-Contracting cycle in MM?

Answer:  In Sub-contracting, we send raw material or input material to sub-contractor and then receive the finished goods. A sub-contracting PO is created with item category ‘L’. Input material is sent to vendor for processing with movement type 541. When GR is done using movement type 101, movement type 543 takes place automatically and takes care of consumed material.

Q.What is meant by Scales in MM?

Answer:  When we maintain price in Info Records, we can make use of scales. It is used when price of a material is dependent on quantity purchased. For eg. For 500 pieces of material ABC, price is Rs. 10, however, if the order quantity is more than 500, price is Rs. 9. Scales are maintained in various master data like info record, quota arrangement etc. from where scales can be pulled in a Purchase Order.
Q.How to Flag a material for deletion?
Answer:  A material must be flagged for deletion before deleting it using Archive and Delete program. A deletion flag can be set at client level, plant level or storage location level. Whatever level you flag a material for deletion, it is flagged for deletion at all corresponding lower levels. Transaction MM06 is used to flag a material for deletion.
Q.Can a material be used after flagging it for deletion?
Answer:  Yes, even after flagging a material for deletion, it can be used till it is actually deleted. It will just trigger a warning message whenever the material is used. If you want a material to be blocked for any use with immediate effect, you should use a material status which is there in Basic View 1 for general level or in MRP 1 view for plant level blocking.
Q.What is the function of OBYC?
Answer:  OBYC is t-code used for configuring Automatic Account Posting.
Postings are made to G/L accounts automatically in the case of Inventory Management  and Invoice Verification relevant to Financial and Cost Accounting.
Q.What is valuation grouping code related to OBYC?
Answer:  Valuation grouping code is used to group the valuation area, In SAP, we can have valuation level at Company code level or at plant level.
General practice is to use the valuation area at plant level, because valuation may differ from one plant to another. The valuation grouping code makes it easier to set automatic account determination. If we need to define common account determination for several valuation areas, we can assign same valuation grouping code to all those valuation areas. We can maintain the valuation group code in OMWD for various valuation areas.

Q.What types of special stocks are available?

Answer:  Various special stock types available in SAP are Consignment, Subcontracting, pipeline, project, sales order stock, Returnable transport packaging, stock transfer, and the third party.
Q.What is the difference between Contracts and Scheduling Agreements?
Answer:  A contract is a pre-determined long term agreement to supply material or service for a certain period of time. Specific delivery dates are not mentioned in the contracts. Contracts can be of two types: Value Contract or Quantity contract
In Scheduling agreements, we can enter scheduling lines which gives details of quantity that should be delivered on specific date. Plant must be entered in SA so that materials can be delivered at plant. These are generally used for materials whose requirements are predictable.
Q.How can we create new transaction codes in SAP?

Answer:  New transaction codes can be created using t-code SE93.
Q.What are release procedures with and without classification?
Answer:  Release Strategy with Classification:
PR can be released at header level as well as item level.
It can be used for both internal/external documents.
Can be set on any field available in structure CEBAN
Release Strategy without Classification:
PR can be released only at item level.
It can be used only for internal documents such as PR.
This strategy can be used only on 4 parameters which are Account assignment category, Plant, Material Group and value of PR.
Q.What is meant by batches?

Answer:  A batch is a subset of the total stock of a material. It represents a homogeneous unit which has unique specification. Normally, a batch is assigned to the quantity of material produced during a given production run. A batch number uniqueness can be assigned at any of the following 3 levels:
At client level: The same batch number can be assigned only once   within the entire client.
At material and plant combination level: Same batch number can be assigned to material with different specification in each plant.
At material number level: A batch assigned to a material has the same specification for all plants where material is extended. Batch number can be reassigned with a different specification for each material.

Q.How to handle free items in PO?

Answer:  While creating PO, we can tick the item as free item in item overview section of PO. The price will be zero for free marked item.
Q.What information is maintained in Accounting View of material master?
Answer:  Accounting view is a plant specific view. Besides other information, it contains important information such as valuation class and price control. Valuation class helps in determining the relevant GL account used for account posting. It is also used while configuring OBYC settings. Price control indicator determines if material is maintained at Standard price(S) or Moving average price (V).
Q.What is the use of Material types?

Answer:   Material Types’ is used to group various materials based on some common properties. It helps in maintain material master data for a particular material. Using material types, we can control which all views are required for a material type, which fields are required or optional, the material number range etc.
Q.What is the use of ‘Partner Functions’ for a vendor?
Answer:  Partner Function is used to define responsibilities and duties of other business partners. Some partner functions are AZ(Alternate payee), CR(Carrier), OA(Ordering address), GS(Goods supplier), PI(Invoice presented by) etc.
Q.What is the use of ‘Material Status’?
Answer:  Material Status helps in determining the usability of a material. It is a 2-digit code which can be maintained as plant specific material status, cross-plant material status, and distribution material status.
Q.What is the ‘Price Control Indicator’?

Answer:  ‘Price Control Indicator’ is maintained in accounting view and is used to determine how a material will be valuated. It can be Standard Price(S) or Moving Average Price(V). If the indicator is set to S, all inventory postings are posted at standard price maintained in material master. If there are variances in any transaction due to different price, the variance is posted in price difference account.
If price control indicator is set at V, goods received will be done at GR price. The moving average price will be adjusted in material master using weighted average formula. If goods movements or invoice receipts are posted using a price that differs from the moving average price, the differences are posted to the stock account.
Q.What are various types of Stock transfer?
Answer:  The physical movement of stock between different physical locations is called as ‘Stock transfer’. Stock transfer can be either a single step process or a two-step process. Various Stock transfers are:
Inter Company (Company to Company)
Inter Plant/Intra Company (Plant to Plant)
Intra Plant (Storage location to Storage location)
Q.What are various Stock Types?
Answer:  In SAP, commonly used stock types are:

Unrestricted Stock (Stock that is available for use)
Restricted Stock
Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)
Blocked Stock (Stock rejected by quality or production)
GR Blocked Stock (Conditionally accepted stock. Not the unrestricted stock)
Q.What are various procedures for counting Physical Inventory?
Answer:  Physical Inventory procedures in SAP MM are as follows:
Periodic Inventory (All stocks are counted on a pre-determined date)
Continuous Inventory (stocks are counted continuously during the entire fiscal year)
Cycle Counting (Counting is done at fixed intervals)
Inventory Sampling (Randomly selected material stocks are physically counted on the balance sheet key date. If variances are small enough, it is presumed that the book inventory balances for the other stocks are correct.)

Q.What are the various functions /features in Purchasing?
Answer: The purchasing view consists of RFQ / Quotation, Purchase Requisition (PR), Purchase Order (PO), Master Data that has several fields like info record, source list, conditions, vendors etc. and finally Outline Agreements.

Q.What are the different kinds of special stocks available?

Answer: Special stocks available are consignment stocks (from vendor), subcontracting stocks (to sun-contractor), project stocks, pipeline materials, sales order stocks, stock transfer and third party.

Q.How do you create a pricing procedure?
Answer: The steps involved in creating a pricing procedure are:
1. Create condition tables

2. Create access sequence according to the various condition tables

3. Create condition types

4. Assign access sequence to condition type

5. Create the pricing procedure

6. List down all the condition types in order so as to suit the business and pricing requirements

Q.How does the consignment cycle operate?
Answer: The various steps in consignment cycle are:
1. Create consignment info record with proper tax code

2. Create Purchase order with item category K

3. Create output condition record for KONS (output type)

4. Authorize Goods Receipt (GR)

5. Payment is settled through MRKO transaction even if invoice verification is not done

Q.What are the kinds of info records available?
Answer: Standard, consignment, subcontracting and pipeline

Q.What is the difference between a contract and scheduling agreement?
Answer: While a scheduling agreement is for consignment, subcontracting and stock transfer, a contract is for Standard items and can be limited to a certain quantity or value.
A contract can be created centrally with different pricing conditions for every plant whereas a scheduling agreement needs to be created at that particular plant location. In a contract, only time-dependent conditions can be created whereas in a scheduling agreement, you can have time-dependent or time-independent conditions subject to the customizations in the document type.

Q.What is MRP? And how is Lot Size used?
Answer: MRP is short for Materials Requirements Planning and it is a production planning technique that’s used to manage the manufacturing process. It is basically used to determine your Material Planning procedure by specifying the various conditions like Reorder Point, Seasonal Requirement, Replenishment, Vendor Managed, Forecast Based and Master Production Scheduling (MPS). Lot size specifies the nature of material requirement in terms of Weekly, Monthly, Quantity and Maximum Replenishment.

Q.What are batches and how are they searched?
Answer: A batch is a collection of similar items from your stock that have the same characteristics. For example, all food items produced on a particular day belong to one batch.
Batches are searched using the standard facility (match code, key F4) based on the batch names or other properties that distinguish them from others.

Q.How is shelf life managed in SAP? Explain the full-cycle.
Answer: In SAP, there are basically two types of shelf-life:
1. Total Shelf Life – In case the total shelf life is maintained, then it’s mandatory to enter the minimum shelf life also. During the process of Goods Receipt (GR), the user will have to enter the manufactured date of the item so that the expiry date is automatically calculated by the system.
2. Minimum Shelf Life – The date of minimum durability of the item are specified by using date markings like ‘use-by’ or ‘best-before’. During the process of Goods Receipt (GR), the user will have to enter the date of GR so that the system can check if the material is usable according to the requirements in material master. If the minimum remaining shelf life condition is not satisfied, then the system will not accept the goods receipt.

Q.What is a release strategy? What are release groups and codes?
Answer: The procurement process in SAP needs to be controlled by introducing authorizations at important stages. This is taken care by the release strategy, which has different codes for assigned users. For example, if the value of a PO is more than a certain pre-defined limit, then it has to be approved by the SCM manager with a certain release code. Every company will have different approval mechanisms and the release strategy can be defined by the users.
Release groups are a set of release codes that are used for authorizing a purchasing document or approving a release strategy. Release code is a 2-character ID that allows a person to approve or clear a PR or a PO and they are controlled by a step-by-step authorization system. For example, Code 10 is assigned to the person who creates the PO, Code 20 is the release code assigned to the Purchase manager for approval. Subsequently, the Department Head will use Code 30 to approve the release strategy, followed by the Operations Director, who will use Code 40 for final approval.

Q.What is a GR blocked stock and when is it used?
Answer: The GR blocked stock is an option used in the goods receipt process when you are not sure about the quality of the goods received. In such a case, the stock is maintained as GR blocked either from a material viewpoint or exclusively for a purchase order item.


Answer: The reason for Batch Management are 1.Defect tracking, 2.Call back activities used for hazardous materials, chemicals & pharma.

Batch levels :        1.Plant    2.Material  3.Client

SAP recommends plant level in SPRO

We have to set characteristics ie. Properties class type: -022 at plant level,   -023 at client level

We can use split valuation for batches if the value based IM.

The Batch No. is valuation type

To indicate whether a batch is usable or not

In customizing we can activate batch status management

Level AUTO à client (or) Material

MANUAL à  Plant (selected)

Status Unrestricted can be used & Restricted cannot be used.

SLED = Total shelf life + Production Date in GR

If no data in Material Master we have to enter at GR.

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