INTERVIEW QUESTIONS AND ANSWERS

1. Explain Enterprise structure of SAP MM?

1. Client
2. Company code
3. Plant
4. Storage Location
5. Purchase Organization
6. Purchase Group

2. What is Standard Purchase organization?

Standard purchasing organization is assigned to the plant which is used to create automatic
purchase orders and mainly used for Consignment and Pipeline Procurement where price will
automatically flow Purchase info record

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
3. Can we maintain multiple addresses to one storage location?

Yes we can maintain Business wants to differentiate the stock based on certain parameters like
Handling Unit materials in one location and non-handling unit materials in another location or
Packaging and non-packaging materials and so on

4. Explain Configurations required for Plant?

1. We have to create a plant and maintain storage locations under that plant
2. Assign Plant to Company code
3. Assign Purchase Organization to Plant & Company code depend upon business requirement
4. Activate material ledger
5. Activate valuation grouping code at plant level
6. Set Plant Parameters

5. Is it required to activate Material ledger on ECC system?

No, it is not required in SAP ECC it’s done automatically but for SAP S4 HANA it is mandatory

6. What is concept of valuation class?

In Automatic account determination when we do any postings in MIGO system will try to find a GL
account for that postings. It’s done through valuation class.

Grouping of similar types of materials for accounting purposes is the Valuation class. It helps to
determine which material must go to which account based on the settings done in OBYC. Generally
3000 is for raw materials, 7900 for semi finished. 7920 for finished

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
7. Give me Example of standard material type Provide by SAP?

ROH Raw material

HALB Semi finished material

FERTFinished material

PIPEPipeline material... etc

8. What is difference between standard Price and Moving average Price?

Standard Price Moving Average Price

It is used for Semi finished & Finished material It is used for raw material
Here we don’t get exact price Here we will get exact price of material
EX: In standard price if we procure material EX: In Moving average price if today we procure
today at 8rs and tomorrow at 10rs that 2rs material at 10rs, tomorrow at 8rs and day after
difference will go to PRD account(Price tomorrow by 12 the average price will be 10rs
difference)
9. What are the end to end configurations required to create material master?

Industry sector, Material Type, Material group, Purchase group, Plant, storage location and
Valuation class

10. What is material type NLAG and UNBW?

Non stock material (NLAG) :Inventory management is not possible for these materials either on a
quantity or value basis. For frequently required consumables, the use of this material type
nevertheless enables you to store the information required to create. Purchasing documents (such
as texts and units of measure).When a material is procured directly for consumption, no material
master record is necessary.

Non valuated material (UNBW): This type of material is managed on a quantity basis, but not on a
value basis. This makes sense for materials of low value, stocks of which nevertheless have to be
monitored (for example, operating manuals).

11. Once material is created can we change industry sector?

No, we can’t change because industry sector controls the sequence of screen and fields.

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
12. Once we create a material master can we change material type?

Yes we can change in T code: MMAM

We have few prerequisites to check before we change material type

 Respective material should have zero stock in inventory

 There will be No open purchase orders for that material

13. Is there any provision to assign valuation class to material group?

Yes we can assign valuation class to material group, once we follow the above path we will reach to
below screen

Here we can assign the valuation class to the material group

We mainly prefer this assignment during non-stock procurement

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
14. What is concept of Business Partner (BP)?

The business partner function in SAP brings together the different & diverse business processes a
company manages all via a single transaction and with a consolidate view of a partners data.

A business partner can have role of supplier (Vendor) , a customer, a person or an employee. A
business partner can be an organization, a person or a group

15. What are the configurations of Business Partner (BP)?

1. Vendor account group and number range

2. BP roles, grouping and number range for grouping
3. Mapping direction BP to vendor

16. What is vendor account group?

When different vendors are grouped together having a similar characteristics know as vendor
account group

EX: Domestic vendor, Import vendor, one time vendor

It controls the followings

Number range

Type of vendor

Field selection

17. While creation of PR there is one option called source determination what is use
of it?

Source determination is only used for determine automatically fixed vendor in assign source of
supply tab once we tick that option wile creation of PR the system will consider source of supply
without selecting source of supply option

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
Without source determination Option system asking manually to press source of supply option

With source determination Option system automatically picked fixed vendor without selecting
assign source of supply

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
18. In Purchase requisition which price consider by system and why?

IN PR system considers the Material master price because PR is not shared with vendor it’s an
internal document

19. From how many ways we can create Purchase order?

We can create Purchase order manually, with reference to PR, with reference to RFQ, with
reference to Contract and from PO to PO

20. In purchase order which price is fetched by system?

Purchase info record (PIR) price is fetched in PO

21. How many types of procurement we can see in MM?

1. Standard Procurement
2. Subcontracting Procurement
3. Pipe line procurement
4. Consignment procurement
5. Return Po
6. Import Po

22. While creation of Purchase order there is one field called Account assignment
category what is the use?

When we want to load all our charges of procurement on a particular category then we have to
select this.

EX: cost center, Asset, Project etc

When we will assign the above categories then we have to mention GL and cost center, Asset and
project

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
23. What is use of unknown account assignment category in PR?

Unknown account assignment category is used when we are not sure of exact GL account and cost
center while creation of PR

24. Is there any alternative option available for Release Procedure?

Yes, there is an alternative option available called flexible work flow in S4 HANA

25. What is OBYC setting?

OBYC setting will do for system to find the correct GL account through automatic posting

In OBYC setting we use different transaction key such as BSX, GBB, and PRD and chart of account
and will map the valuation class and GL account for transaction keys.

26. In Purchase order how Pricing procedure will trigger?

Yes in PO pricing procedure will trigger in the combination of schema group assigned to vendor
schema group assigned to Purchase org and both combination assigned to calculation schema

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
27. Can we maintain multiple vendors in one PO?

Yes we can maintain one vendor as main vendor in header and 2nd vendor is for freight as a freight
vendor in PO item detail tab we have to select freight condition and add the separate vendor for
freight

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
28. What is difference between PB00 and PBXX?

Both Condition type used for Gross Price in PO but

PB00 PBXX
Automatic Gross price Manual Gross price
Having access sequence Don’t have any access sequence
Since Having access sequence we can
maintain condition record and PIR Manually we have to enter in PO
and price will fetch from it in PO

29. What is role of access sequence?

The sequence in which condition records are to be referred this defined in access sequence. Access
sequence is assigned to condition types. It’s a search strategy by which system will find values of
condition type maintained in condition record from condition tables

30. Can you Explain columns In Pricing Table?

Pricing procedure Table consist of 16 columns

1. STEP
It shows the priority of condition type in Purchase ORDER

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
2. COUNTER
This is used to show a second mini step

3. CONDITION TYPE
This is the most important component in the pricing procedure. The rates are picked up from this
element, on the basis of the properties described. EX: PB00, RA01

4. DESCRIPTION
This forms the description of the condition type.

5. FROM
This is used to define the progression of the calculation and range of subtotals

6. TO
This is used to define the progression of the calculation and range of subtotals

7. MANUAL
This function enables to allow the condition type to be entered manually also apart from automatic
pickup.

8. MANDATORY
This function identifies the conditions that are mandatory in the pricing procedure.

9. STATISTICS
This doesn’t have any impact on overall value calculation

10. PRINT
The activation of this function will enable the printing of the values and conditions to the
document.

11. SUBTOTAL
A key is assigned from the drop down menu this can be used for calculation of gross price

12. REQUIRMENT KEY

This function is used to assign a requirement to the condition type. This requirement can be used to
exclude the system from accessing the condition type and trying to determine the value. This can

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
be used to specify that the condition type should only be accessed if the customer has a low risk
credit.

13. ALTERNATE CALCULATION TYPE

This function allows you use a formula as an alternative in finding the value of the condition type,
instead of standard condition technique. this can be used to calculate complex tax structures.

14. ALTERNATE CONDITION BASE VALUE.

The alternative condition base value is a formula assigned to a condition type in order to promote
an alternative base value for the calculation of a value.

15. ACCOUNTS KEY

Key that identifies different types of G/L accounts

Use: the account key enables the system to post amounts to certain type of revenue account

EX: the system can post freight charges (generated by freight pricing condition) to relevant freight
revenue account.

16. ACCRUAL KEY.

Accrual key allows amounts from pricing condition like rebate to be posted to accrual accounts
rather than directly impacting material price

31. Why SAP provided source of Price like PIR & Condition record?

Condition enables you to store pricing stipulations agreed with the vendor (such as applicable
discounts or surcharges, or stipulations regarding the payment of freight costs) in the system. You
can enter these conditions in quotations, outline purchase agreements, and info records. The
system then applies the conditions in determining the price in purchase orders (POs). You can enter
further conditions in the PO itself.

Condition records allow you to store and retrieve pricing data in the system. All the pricing
elements of your daily business - the prices, discounts, and surcharges for freight and taxes - that
you want to use for automatic pricing must be stored in the system as condition records. You can
define as many condition records as you want for the different pricing elements for any validity
period.

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
32. What is return PO?

When any material is rejected during the quality or it’s damaged during the Transportation we can
return it to vendor using Return item option in PO we have to check that option of return PO, and
we have to raise a credit memo against return PO

33. What is difference between normal invoice postings and credit memo?

Normal Invoice Credit memo

Vendor will send his invoice along with Business will share this credit memo to vendor
materials for return PO
Business will pay to vendor Vendor will pay to business
Accounting entries Accounting entries
WRX + WRX -
KBS - KBS +

34. Can we release service entry sheet?

Yes we can release in T code ML81N we need enter service entry sheet number and need to click on
Green flag service entry sheet will be released

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
35. What is consignment process?

Vendor will keep his stock of material in company premises with his own ownership company are
not liable to pay for this. When company withdraw material from vendor consignment to own
consumption then company is liable to pay to vendor.

Steps involved in consignment process

1. Create material T code: MM01

2. Create vendor T code: XK01
3. Create consignment PIR with tax code T code: ME11
4. Create Purchase order with item category K T code: ME21N
5. Goods receipt with movement type 101-K T code: MIGO
6. Transfer posting(TP) of consignment stock to own T code: MIGO
2 methods 1. TP from consignment to own (Mvt type 411-K) OR
2. GI of consignment stock to consumption (Mvt type 201-K)

7. Consignment settlement T code: MRKO

36. Why consignment invoice settle through MRKO?

In consignment we are going to pay vendor Part by part based on our consumption it’s a one type
of split invoice that is the reason we use MRKO rather than MIRO in consignment invoice
settlement. MIRO we can use when we are going to pay full amount at one time

37. What is movement types used in different Subcontracting Processes during GR?

101  Parent material

543 -  Child material

545 +  Scrap

121 -  Over consumption

121 +  under consumption

38. Explain subcontracting Process with over consumption?

We supply raw material to subcontractor vendor what if he consumes more quantity than supplied
is called over consumption.

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
Example for over consumption

When you create a subcontracting PO for 100 finished materials as per BOM we have to supply
child materials. Because of some child parts got damaged & vendor comes to you and asks for more
raw materials this scenario is called as over consumption.

39. What is Import PO?

In import PO we generally procure material from outside of country. For import PO we need to set
different pricing procedure because we have to pay Taxes like Excise duty, custom duty. Some time
we need to pay advance also

40. What is Pipeline procurement?

It is the process where, material will be flowing from the vendor premises to plant premises, and
pipeline material is not stored in any storage location or plant as it consumed directly as when
required, because it flows directly into the production process from pipeline or via cable and
coming to payment through invoice settlement

EX: electricity, oil, gas product & water

Steps involved in Pipeline procurement process

1. Create material T code: MM01

2. Create vendor T code: XK01
3. Create Pipeline PIR with tax code T code: ME11
4. Record consumption of pipeline material T code : MIGO
Goods issue with Mvt type 201-P

5. Pipeline settlement T code: MRKO

41. What is Physical inventory?

Physical inventory is process of verifying the inventory stock quantity in our storage location, and
later we compare the inventory stock in storage location with book inventory mentioned in SAP
system.

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
42. What is posting block and Freeze book inventory in Physical Inventory process?

1. Posting block

2. Freeze book inventory

1. Posting block

If we select posting block for a material until complete Physical inventory for that material we are
not able to post any Goods receipt or Goods issue. So it will block the material under that plant and
storage location

Why to block the posting?

We should not miss the count

2. Freeze book inventory

In this scenario the stock will get freeze when we select the freeze stock option during creation of
PI document. But system will allow for posting of that material but it will always consider the freeze
book inventory quantity only.

43. How to Print Physical inventory (PI) Document?

We can print PI document through T code: MI21

44. What is ASAP methodology?

The ASAP (Accelerated SAP) methodology is a roadmap for implementing SAP solutions in a cost-
effective, speedy manner. This is a proven implementation methodology that helps streamline
projects and achieve lower total cost of implementation (TCI).

ASAP methodology is divided into 6 Phases:

Phase 1: Project Preparation

 Initial Planning and preparation for the SAP Project
 Identification and mobilization of the project team
 Set-up of the project environment

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
Phase 2: Business Blueprint
 Organization of workshop sessions with all project stakeholders
 Definition of the business processes
 Completion and delivery of the blueprint document

Phase 3: Realization
 Configuration of the SAP System
 Delivery of functional and technical specifications
 Realization of required ABAP/Fiori development
 Definition of data mappings and data requirements for migration
 Completion of unit Testing
 Completion of integration testing
 Completion of UAT (User Acceptance Testing)

Phase 4: Final Preparation

 Resolve all remaining critical issues
 End user training
 Data conversion and preparation of Cutover activities

Phase 5: Go-Live and Support

 Copy of all transports to the production system
 Data migration
 Post Go-live support

Phase 6: Operate
 Fine-tune the application lifecycle standards, processes and procedures established during
the project and align them with operation needs.

45. What is SAP landscape?

Combination of three different servers is known as SAP Landscape

1. Development

2. Quality or Testing

3. Production

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
All three server can maintained in single instance called single SAP server

1. Development Server
In development server all development activity related to implementation is done. A development
server is consists of 2 sub servers

1) Golden client (Sand box) Server

2) Testing client server

In Golden client server or Sand box all development activity/ configuration is done related to
project, what are all the business requirement we are going to configure in the development server.
Once all configurations is done it has to be tested in testing server for that we have to move all data
from golden client to testing client using T code SCC1. Usually unit testing is done at testing client
that is done by Functional consultants.

2. Quality Server
In Quality or testing server all Configurations made in development server is going to test. Usually
entire data is tested, for testing we have to move all data from development to quality using TR
movement which is going to done by the BASIS team. We do integration testing in testing server

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
3. Production Server
In production server we launch the software for end users, end users are going to do all activity
related to business in production server.

46. What are the accounting entries during GR in subcontracting process?

During GR

Accounting entries in subcontracting always calculated in formula  4+2X

X  No of child materials

4 accounting entries for finished material

BSX Inventory account

WRX GR/IR clearing account

BSV Change in sub contracting stock

FRL Sub contracting charges

(In subcontracting FRL always comes as service charges paying to vendor)

2 accounting entries For Raw materials

BSX  Inventory account

GBB Consumption account

47. Explain P2P cycle?

1. Purchase requisition (PR)

2. Request for quotation (RFQ)
3. Purchase Order (PO)
4. Goods receipt (GR)
5. Invoice verification (IR)

48. What is Output determination? And how you are configuring that?

Output is a form of media from your business to one of its business partners or it can be within the
organization. The output can be sent to any of the partners defined in the document. Outputs are

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
usually in the form Purchase orders, Request for quotations, Contract and Scheduling agreements.
Determining form of output is output determination.

Steps involved in Output determination

1. Define Condition Table

2. Define Access Sequence

3. Define Message types

4. Define Message Determination schema

5. Maintain condition record in NACE

49. What is Partner determination Process? Explain with Example

Partner Determination process is used for designing the vendor master where your vendor acts as
Goods Supplier, Ordering Address and Invoice payee (During business transaction how your vendor
acts).Let’s understand this by using a business scenario

Let’s say you have a vendor and there are three offices such as main office is in Delhi, branch office
is in Mumbai, and they supply goods from Bangalore.

Here goods supplier is Bangalore office, ordering address is Mumbai and invoice payment to main
branch that is Delhi. So In this case we can use Partner Determination process

Standard Partner Roles Provided by SAP

VN  Vendor OA  Ordering Address

IP  Invoice Payee GS  Goods Supplier

50. What is Outline agreement? What are its types?

It’s a long term agreement between vendor and organization for procurement of material or
services with terms and conditions within specific period of time.

Types of outline agreement

1. Contract 2. Scheduling agreement

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)