SAP MM INTERVIEW
QUESTION
100 questions
1. What is SAP MM? Explain its importance in an organization.
SAP MM (Materials Management) is a core module in SAP ERP that
manages materials, inventory, and procurement processes.
2. What are the main components of SAP MM?
Main components include Purchasing, Inventory Management, Material
Master Data, Vendor Master Data, Invoice Verification, and Valuation.
3. Explain the procurement process in SAP MM.
The procurement process involves creating a purchase requisition,
converting it into a purchase order, receiving goods, and processing the
invoice.
4. What is a purchase requisition and how is it created in SAP
MM?
A purchase requisition is an internal request to procure materials or
services and is created before the purchase order.
5. What is a purchase order? How is it different from a purchase
requisition?
A purchase order is a formal request sent to a vendor to supply goods
or services, based on the purchase requisition.
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6. What are the types of info records in SAP MM?
Info records store purchasing information for materials and vendors.
Types include standard, consignment, subcontracting, and pipeline.
7. What is the purpose of a source list in SAP MM?
A source list identifies preferred sources of supply for a material, helping
in automatic vendor determination.
8. What is a vendor master record? What data does it contain?
The vendor master record stores information like vendor name, address,
payment terms, and bank details for procurement.
9. How do you create a material master record in SAP MM?
Material master contains all information needed to manage a material.
It's created using transaction MM01.
10. What is the difference between stock and non-stock
procurement?
Stock procurement refers to materials managed in inventory, while
non-stock procurement refers to direct consumption items.
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11. What are movement types in SAP MM? Give examples.
Movement types define the type of material movement like goods
receipt (101), goods issue (201), or transfer (301).
12. What is a goods receipt? How is it processed in SAP MM?
A goods receipt is the confirmation of received goods from a vendor
and updates inventory levels.
13. What is a goods issue? How is it different from goods
receipt?
A goods issue is the removal of stock from inventory, typically for
production or delivery to
customers.
14. What are the different types of inventory management in
SAP MM?
Inventory management covers processes like goods receipts, issues,
transfers, and stocktaking within the warehouse.
15. What is the role of valuation class in SAP MM?
Valuation class groups materials with the same accounting
requirements and links material types to G/L accounts.
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16. What is the difference between a contract and a scheduling
agreement in SAP MM?
Contracts are long-term agreements with fixed terms, while scheduling
agreements are delivery schedules for specific dates.
17. What are pricing conditions in SAP MM?
Pricing conditions define prices, discounts, taxes, and surcharges for
purchasing documents in SAP MM.
18. What is an outline agreement in SAP MM?
Outline agreements are long-term purchase agreements like contracts
and scheduling agreements with vendors.
19. What are the different types of outline agreements?
The types are Quantity Contracts and Value Contracts, each used for
different procurement strategies.
20. What is the importance of invoice verification in SAP MM?
Invoice verification ensures that the invoice matches the purchase
order and goods receipt before payment.
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21. Explain the process of automatic account determination.
Automatic account determination assigns the correct G/L accounts
during inventory posting based on material and transaction.
22. What is a consignment stock?
Consignment stock is vendor-owned inventory stored at the company's
premises, paid for only upon usage.
23. What is subcontracting in SAP MM?
Subcontracting involves sending raw materials to a vendor who
processes them into finished goods.
24. How is the release strategy defined for purchase orders?
A release strategy controls approval workflows for purchase documents
based on value or other
criteria.
25. What is batch management in SAP MM?
Batch management allows tracking and control of material batches for
quality and traceability.
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26. What is the difference between planned and unplanned
delivery costs?
Planned delivery costs are pre-determined in the PO, while unplanned
are added during invoice
posting.
27. What is MIGO and MIRO?
MIGO is used for goods movements like receipt and issue, while MIRO is
used for invoice posting.
28. How do you handle returns in SAP MM?
Returns are handled using movement type 122 to reverse goods
receipts and adjust stock and accounting.
29. What are special procurement types in SAP MM?
Special procurement types include consignment, subcontracting, stock
transport order, and third-party processing.
30. What is split valuation?
Split valuation allows the same material to be valued differently based
on criteria like origin or batch.
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31. What is the function of the material type in SAP MM?
Material types define the attributes of a material and how it is managed
in inventory and accounting.
32. What are the main tables used in SAP MM?
Important tables include MARA (General Material Data), EKKO (Purchase
Orders), and EKPO (Purchase Order Items).
33. Explain the concept of reservation in SAP MM.
A reservation ensures stock is set aside for a specific purpose like
maintenance or production.
34. How do you create a request for quotation (RFQ)?
An RFQ is created using ME41 and sent to vendors to obtain quotations
for materials or services.
35. What is the use of ME21N, ME51N, ME31K, and ME41
transactions?
ME21N creates POs, ME51N creates requisitions, ME31K creates contracts,
and ME41 creates RFQs.
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36. What is the difference between internal and external
procurement?
Internal procurement is within the company (e.g., from another plant),
while external is from a vendor.
37. How do you perform a physical inventory in SAP MM?
Physical inventory is stock counting to ensure system data matches
physical stock, done using MI01-MI07.
38. What is LSMW and how is it used in SAP MM?
LSMW helps migrate legacy data into SAP using automated scripts for
master data like vendor and material.
39. What is the use of condition technique in pricing?
The condition technique uses condition types and access sequences to
determine pricing and discounts.
40. Explain the difference between GR based invoice and PO
based invoice.
GR-based invoice checks actual goods received, while PO-based
invoice checks the purchase order
only.
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41. What is a material valuation and how is it configured?
Material valuation determines how material value is calculated-moving
average or standard price.
42. What is the use of classification and characteristics in SAP
MM?
Classification and characteristics allow grouping of materials with
similar features for reporting and control.
43. What are release procedures and their types?
Release procedures can be with or without classification. They enable
approvals for documents like POs.
44. How do you block a vendor for procurement?
Vendors can be blocked in master data or purchasing views to prevent
further procurement.
45. Explain document types in SAP MM.
Document types define the nature of a purchase doc, e.g., NB for
standard PO, FO for framework
order.
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46. What is an account assignment category?
Account assignment categories determine which cost object (like cost
center) a purchase is charged to.
47. What is service procurement in SAP MM?
Service procurement handles services instead of materials, using
service master records and entry sheets.
48. What is the purpose of schema group in SAP MM?
Schema groups help differentiate pricing strategies for vendors and
purchasing organizations.
49. How is tax calculated in purchase orders?
Tax is calculated using tax codes maintained in the PO and applied
during invoice verification.
50. What is a scheduling agreement?
A scheduling agreement is a long-term purchase agreement with
delivery dates and quantities.
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51. What is the difference between plant and storage location?
Plants are locations where goods are managed; storage locations are
sub-divisions within plants.
52. What is quota arrangement and how is it maintained?
Quota arrangement divides total procurement quantity among multiple
vendors based on a set ratio.
53. What is vendor evaluation and its importance?
Vendor evaluation uses scores to rate vendors on criteria like delivery,
quality, and pricing.
54. What is the difference between company code and plant?
Company code is the legal entity, while plant is the physical location
linked to it.
55. How do you perform invoice blocking and release?
Blocked invoices are held from payment due to mismatches and
require release after correction.
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56. What is the use of transaction ME2N?
ME2N is a report that lists POs by PO number and can be filtered by
multiple criteria.
57. What is the meaning of GR/IR account?
The GR/IR account holds the value of goods received but not yet
invoiced, ensuring accounting accuracy.
58. What is the use of transaction MB1C?
MB1C is used to post initial stock balances into inventory during system
go-live or adjustment.
59. How do you perform stock transfer between plants?
Stock transfers between plants are done using STOs and movement
types like 301 or 351.
60. What are the key integration points of SAP MM with other
modules?
MM integrates with FI (for accounting), SD (for sales), PP (for
production), and WM (for warehousing).
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61. What is automatic PO?
Automatic PO allows creation of POs during goods receipt or requisition
processing without manual steps.
62. How is a vendor master created in SAP MM?
Vendor master is created using XK01 and stores purchasing and
accounting data for a vendor.
63. What is purchase group and how is it used?
Purchase group is responsible for procurement within a company and
can be assigned to a buyer.
64. What is the difference between service PO and standard PO?
Service POs are used to procure services, which require service entry
sheets. Standard POs are for materials.
65. What is a pipeline material?
Pipeline materials are provided by vendors via pipeline and consumed
without goods receipts.
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66. How do you handle over-delivery and under-delivery in
SAP MM?
Tolerance limits in the PO determine the acceptable over- or under-
delivery percentage by vendors.
67. What is ERS (Evaluated Receipt Settlement)?
ERS is automatic invoice generation based on goods receipt, used when
prices and terms are
agreed.
68. What is the use of parameter ID in SAP MM?
Parameter IDs auto-fill fields in SAP transactions based on user-specific
settings.
69. How is a release strategy configured for purchase requisitions?
Release strategies for requisitions use document type, account
assignment, and value thresholds.
70. How do you perform batch determination in SAP MM?
Batch determination uses classification and search strategy to select
the right batch during issue.
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71. What are stock types in SAP MM?
Stock types include unrestricted, quality inspection, blocked, and
reserved stock types.
72. What are internal tables used in reports for SAP MM?
Internal tables are used in custom reports and include MARA, EKKO,
EKPO, etc.
73. What is difference between stock transfer and transfer
posting?
Transfer posting changes stock type or location, while stock transfer
moves stock physically.
74. What is the purpose of posting period in SAP MM?
Posting periods control which periods are open for transactions and
prevent backdated postings.
75. What is a blanket purchase order?
Blanket POs are used to procure low-value consumables or services
over a period without quantity.
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76. How is account assignment different for stock and non-
stock items?
Stock items update inventory; non-stock items are expensed and not
tracked in inventory.
77. What is document type NB used for?
Document type NB is for standard purchase orders in SAP.
78. What is the significance of material group?
Material group classifies similar materials for reporting and
procurement control.
79. How is pricing procedure determined in SAP MM?
Pricing procedure is determined based on schema group, vendor,
document type, and org data.
80. What is the difference between ME21 and ME21N?
ME21 is the older PO creation screen, ME21N is the new, user-friendly
EnjoySAP version.
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86. What are invoice blocks and how do you handle them?
Invoice blocks are mismatches in PO, GR, and invoice and require
release before payment.
87. What is dynamic availability check?
Dynamic availability check ensures stock is available before confirming
orders or issues.
88. How do you configure free goods in purchasing?
Free goods can be configured in conditions to provide extra quantity or
discount automatically.
89. How is third-party processing handled in SAP MM?
Third-party processing involves a vendor directly delivering to the
customer on your behalf.
90. How is quality inspection handled in SAP MM?
Quality inspection stock is placed under inspection before it can be
used or issued.
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91. What is consignment process in SAP MM?
Consignment involves storing vendor stock at your site and paying only
when consumed.
92. What is meant by indirect procurement?
Indirect procurement is for office supplies and services, not directly
used in production.
93. What is standard purchase organization structure in SAP
MM?
Standard org structure includes client > company code > plant >
storage location > purchasing org.
94. What is subcontracting process in SAP MM?
Subcontracting sends raw material to a vendor who returns finished
goods under a PO.
95. What are price control types?
Price control types include Moving Average and Standard Price and
affect inventory valuation.
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96. What is a procurement cycle?
The procurement cycle includes requisition, order, receipt, invoice
verification, and payment.
97. How is service procurement different from material
procurement?
Service procurement is managed with entry sheets; material
procurement involves physical goods.
98. What is SLED in SAP MM?
SLED (Shelf Life Expiration Date) tracks how long a material remains
usable.
99. What is batch split and how is it handled?
Batch split allows different batches in a delivery line item, useful in
inventory tracking.
100. What are the main customization steps for SAP MM?
Customization includes defining org structure, master data, pricing,
release strategies, and document types.
Manoj Pandey (CEO & Co-Founder) | ezyLern | +919310747051
