Introduction:
An essential SAP ERP module that manages inventory, material planning, and procurement is called SAP MM (Materials Management). It is responsible for conducting corporate operations smoothly through the supply chain and logistics. SAP MM experts are in high demand by all industries, so it is a desirable career. In this article, we’ve included 50 frequently asked SAP MM interview questions and answers to help you prepare. As a new or experienced professional, these questions will. As a fresher or experienced professional, these questions will give you confidence to appear for interviews and highlight your knowledge of SAP MM processes and functionalities.
Top trending SAP MM interview questions and answers:
What is SAP MM?
The SAP ERP module for material value, inventory, and procurement is called SAP MM (Materials Management). It is important in a manufacturing or production environment because it ensures that resources are readily available when required.
What are the key components of SAP MM?
The major components are Purchasing, Inventory Management, Material Master Data, Vendor Master Data, Valuation, Invoice Verification, and Physical Inventory. Every element helps make material processes more efficient.
What is a Purchase Requisition (PR)?
A public relations report is an internal document that specifies the desired goods or services. It initiates the procurement process and must be approved before creating a Purchase Order (PO).
What is a Purchase Order (PO)?
An formal document given to a vendor in exchange for products or services is called a purchase order (PO). It has information like material, quantity, price, and delivery date.
How is PR different from PO?
A purchase order is a legal agreement with the supplier to provide the things, whereas a request for materials is called a PR.
What is a Goods Receipt (GR)?
GR refers to the process of acquiring things from a vendor in response to a purchase order. It updates the inventory and is recorded in the system using a material document.
What is the movement type in SAP MM?
Movement categories specify the sort of stock movement, such as goods receipt (101), goods issuance (201), transfer posting (301), and so on. It controls how stock quantities and values are updated.
What differentiates a contract from a scheduling agreement?
A contract is a long-term commitment with a vendor for the supply of materials, whereas a scheduling agreement specifies delivery dates and quantities.
What is source determination in SAP MM?
The process of identifying an appropriate source of supply for an item is known as source determination. It makes use of the information records, quota arrangement, and source list.
What is the source list?
A material’s preferred or fixed vendors are listed in the source list. It helps in automating the source determination process during procurement.
What is an info record in SAP MM?
A particular material/vendor combination’s details are contained in an info record. It includes pricing, delivery terms, and lead times.
What is vendor evaluation?
Vendor evaluation measures a vendor’s performance using characteristics such as quality, price, and delivery. It aids in picking dependable vendors.
What is a material master record?
It serves as the main source of information about materials. It includes descriptions, units of measure, purchasing details, and valuation.
What is a vendor master record?
Vendor details including name, address, terms of payment, and bank account information, are saved. It is vital for procurement procedures.
What is the purchase organization?
It is the organizational entity in charge of procurement activities. It negotiates contracts and manages vendor interactions.
What is a valuation class?
Valuation classes combine materials with similar characteristics for accounting reasons. It helps determine which G/L accounts to post during transactions.
What distinguishes between stock and non-stock procurement?
Stock procurement refers to inventory-held items, whereas non-stock procurement is straight consumption without storage.
What is consignment stock?
The vendor owns the consignment products but keeps them at the customer’s location. The customer only pays when the stock is used.
What is subcontracting in SAP MM?
Sending raw materials to a supplier for processing is known as subcontracting. The vendor returns the finished product, and a PO is created for the service.
What is the release strategy in SAP MM?
A release strategy is the procedure by which papers are approved for purchase. It ensures proper authorization before processing PRs or POs.
What is invoice verification?
It is the procedure for reconciling the vendor invoice with the PO and GR. It ensures accuracy before payment is processed.
What is a blanket purchase order?
It is used for procuring services or consumables over a period without specifying exact quantities. It is ideal for repetitive purchases.
What is batch management?
Batch management is used to track products in numbers or batches. It is useful in businesses such as pharmaceuticals for traceability and quality assurance.
What is physical inventory?
It involves comparing system records with actual inventory counts. Discrepancies are adjusted using inventory documents.
What is a quota arrangement?
It is used to divide procurement among several vendors. The system assigns POs based on their quota percentage.
What is the use of document types in purchasing?
Document types (like NB for standard PO) control the number range, field selection, and allowed item categories in purchasing.
How does a plant get defined in SAP MM?
A plant is a business entity that manufactures, stores, or uses resources. It’s essential for inventory management and purchasing.
What is MIGO?
MIGO is the transaction code for goods movements such as GR, transfer posting, and inventory transfers. It’s widely used in inventory management.
What is MIRO?
MIRO is the transaction code for invoice verification. It allows users to post and manage vendor invoices against POs.
What is a reservation in SAP MM?
A reserve guarantees the availability of materials for a specific purpose. It blocks inventory to avoid shortages during consumption.
What constitutes a normal purchase order?
The most typical sort of purchase order includes goods, quantities, pricing, and delivery dates.
What is an RFQ?
Vendors are asked for quotes (RFQs) in order to obtain terms of delivery and pricing. Vendors provide quotations, which are examined prior to placing a purchase order.
What is the use of the account assignment category?
It specifies how a material is accounted for (for example, cost center or asset). It links the PO to the financials.
What is the transaction code for creating a PR?
The T-code is ME51N. It allows users to create purchase requisitions with item and delivery details.
What differentiates internal and external procurement?
Internal procurement refers to stock transfers between plants, whereas external procurement is done through vendors.
What is split valuation?
It enables a material to be priced differently depending on factors such as origin, batch, and procurement type.
What is the transaction code for PO creation?
The T-code is ME21N. It is used to create a PO referencing PRs or contracts.
What are the different stock categories in SAP MM?
These types include consignment, blocked, quality inspection, and unrestricted stock.
What is the stock overview’s transaction code?
MMBE is used to view the stock status of a material across various storage locations and batches.
What is automatic account determination?
It links transaction types to the correct G/L accounts. It ensures that correct accounting entries are posted during goods movements.
What does an SAP MM outline agreement mean?
It’s an extended purchasing contract with a supplier. It includes contracts and scheduling agreements.
What is a framework order?
It’s a type of PO used for ongoing procurement over a certain period. Quantity and value limits are set.
What is the difference between blocked and excellent stock?
Blocked stock is not useful or available for use, whereas quality material is being inspected and not yet released.
What is a GR/IR clearing account?
It is a temporary account used for goods receiving and invoice posting. It is useful for matching POs, GRs, and invoices.
How does SAP MM define a material type?
Material type defines characteristics and controls for a material, such as raw materials (ROH), finished goods (FERT), etc.
What is LSMW in SAP MM?
Legacy System Migration Workbench (LSMW) is a helpful deployment tool that facilitates the transfer of data from legacy systems to SAP.
What is service procurement?
It involves procuring services rather than materials. Assistance Services are tracked and paid for using POs and entry sheets.
What is price control in SAP MM?
It specifies the value of the material (either the Moving Average (V) or the Standard (S). It affects inventory valuation and accounting.
What purpose does a storage site serve?
It refers to the physical site where supplies are kept within a plant. It is essential for inventory management.
What is a stock transfer?
Stock transfer moves stock from one location to another, such as between storage locations or plants, with or without accounting impact.
Conclusion:
SAP MM Training is essential for an organization’s procurement and inventory activities to run smoothly. GoLogica provides SAP MM interview questions and Answers that generally pertain to varied areas such as purchasing, material and vendor master data, invoice verification, document types, and inventory management. The ability to answer these questions effectively not only indicates technical mastery but also understanding of business procedures embedded in SAP. As a beginner or seasoned professional, practicing with these frequently asked questions will make you confident and enhance your prospects of success at SAP MM interviews.
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