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Top 55+ Most Asked SAP MM
Interview Question and Answers
1) What is SAP MM? / What do you
understand by SAP MM?

We know that SAP stands for Systems, Applications &

Products in Data Processing. SAP MM is a functional module
in SAP that deals with procurement handling and material
management. In SAP MM, MM stands for Material
Management. The SAP MM module contains master data,
material valuation, invoice verification, material requirement
planning, system configuration, transactions, etc., to
complete the procurement to pay process.

2) What are the key advantages of SAP MM or

SAP Material Management?

SAP MM is one of the largest functional modules in SAP. This

module mainly deals with the Procurement Process, Master
Data (Material & Vendor Master), Inventory Management,
Valuation of Material & Account Determination, Material
Requirement Planning, Invoice Verification, etc.

Following are the main key advantages of SAP MM or SAP

Material Management:

SAP MM reduces material costs by avoiding stocking

unnecessary or obsolete materials.

In SAP MM, inventory losses are minimized because it

provides multi-location inventory.

SAP MM reduces direct labor costs, and labor can be

used efficiently.

It can improve the delivery time and increase

transparency across the organization.
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It provides the lot and serial traceability.
 It also provides bin management, scheduling, and
resourcing.

It reduces the manufacturing cycle times and can be

controlled effectively.

It provides effective inventory management and

reduces expenditure on unwanted material storage.

It also provides inventory replenishment and product

life cycle management.

3) What are the main master files used in SAP

MM?

The main master files used in SAP MM are:

Material master file

Inventory master file

Vendor master file

4) What are the most necessary components

of SAP MM or SAP Material Management?

The most necessary components of SAP MM or SAP

⇧Material
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TO TOP are:
 Vendor Selection

Source determination

Invoice Verification

Order Processing

Order follow up

Determine requirements

Goods receipts and Inventory management

5) What do you understand by goods receipt

and post goods receipt?

Goods Receipt: In SAP MM, goods receipt is the physical

inbound transfer for goods or material into the warehouse. It
specifies the transfer of goods used to post goods received
from external vendors or in-plant production. All goods
receipts result in an increase in stock in the warehouse.

Post-Goods Receipt: The Post Goods Receipt specifies the

reference to the purchase order with which the goods were
ordered. It is used to post the receipt of goods with reference
orders after purchase. If the material is delivered for some
purchase order, it is important for all departments involved
that the goods receipt entry in the system references this
purchase order.

6) What are the different types of stocks used

in SAP MM?

Following are the three different types of stocks used in SAP

MM:

Valuated Stock

Non-valuated stock

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Special Stock
Here, the valuated stock is further divided into three parts:

1. Unrestricted stock

2. Blocked stock

3. Quality Inspection Stock

The Special Stock is classified as follows:

1. Stock Transport Order

2. Subcontracting

3. Consignment

4. Returnable Transport Packaging

5. Stock Transport Order

. Pipeline Handling

7. Third-Party Processing

7) What do you understand by Consignment

Stock?

The Consignment Stocks are used to specify those materials

that are still available in the store premises but belong to the
owner or seller. When the buyer uses the consignment
stocks, he has to pay for them.

8) Which type of document is a purchase

requisition, internal, or external document?

A purchase requisition is an internal document, and it is the

phase in which purchasing department is informed about the
requirement of items or services required for business
purposes.

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9) What are the different info record types in
SAP MM?

The different info record types in SAP MM are:

Standard

Pipeline

Subcontracting

Consignment

10) What do you understand by an internal

procurement?

The big corporate organizations own multiple separate

businesses or companies. Here, internal procurement is a
process of getting material and services from identical
companies. So, each of these companies maintains a
complete bookkeeping system with separate Balance, Profit
& Loss Statements so that when a trade occurs between
them, it will be recorded.

11) What do you understand by Special

Procurement in SAP MM?

In SAP MM, Special Procurement is used to specify those

stocks that do not belong to a company, and these are kept
at different locations.

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12) What are the different steps used in
Procurement Lifecycle? Explain them in detail.

Following are the different steps used in Procurement

Lifecycle:

Requirement and Information Gathering

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The procurement process begins with gathering information

about a product and its quantity first. Then for required
products and services, it is necessary to look for suppliers
who can satisfy the requirements.

Supplier Contact

This step comes after requirement and information

gathering. After gathering requirements, one will look for the
suppliers who can fulfill the requirements. Based on that, we
can make a quotation request or information request to the
suppliers or direct contact with them.

Background Review

Once the supplier is known, product/service quality is

checked, and any necessities for services such as
Installation, warranty, and maintenance are investigated.
Some samples of the products can be obtained for qualifying
examination.

Negotiation

Some negotiations with suppliers are made regarding the

products/services' price, availability, and delivery schedule of
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the products/services. In this step, a contract is signed, a
binding legal document between the supplier and the
ordering party. A contract will include all necessary
information like price and quantity of material, delivery date,
etc.

Order fulfillment

Ordered material will be shipped, delivered to the ordering

party, and the supplier is paid accordingly. Training and
Installation of products or services may also be included.

Consumption, Maintenance, and Disposal

As the products/service is consumed, the performance of the

products or services is evaluated, and any follow-up service
support, if required, is analyzed.

13) What are the different types of special

stocks available in SAP MM?

Different types of special stocks available in SAP MM are:

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Subcontracting

Consignment

Project

Pipeline

Sales order

Stock transfer

Returnable packaging with a customer, etc.

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14) What are some common assignment
types in the SAP Material Management
system?

Following is a list of some common assignment types in the

SAP Material Management system:

Purchasing organization to company code

Standard purchasing organization to plant

Plant to Company code

Purchasing organization to Plant

15) What are the important fields in the

purchasing view in SAP MM?

The most important fields in the purchasing view in SAP MM

are:

The base unit of measure

Order unit

Purchasing group

Material group

Valid from

Tax indicator for the material

Manufacturer part number

Manufacturer, etc.

16) What do you understand by a Purchase

Order?

A Purchase Order is a type of confirmation list that a buyer

sends to his sender to confirm the requirements finally. The
Purchase Order not only includes the names and quantity of
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materials, but it also has valuable information like details of
purchasing company with a company code, name of material
along with the corresponding Plant, and date for delivery of
material.

17) What is the importance of the batch record

in SAP MM?

In SAP MM, a batch is used to specify the quantity of a

particular product, which is processed or produced
simultaneously with the same parameters. The materials
produced in these batches have the same values and
characteristics. On the other hand, the batch record is used
to give information about a particular batch product and is
mainly used in knowing whether the product has gone
through GMP (Good Manufacturing Process).

18) How can you link a document to a vendor

master record?

We can link a document to a vendor master record by using

the XK01 transaction code or by using the following menu
path:

SAP Menu > Logistics > Material Management > Purchasing 

19) What are some common assignment

types in the SAP Material Management
system?

Some of the most common assignment types in the SAP

Material Management system are:

Purchasing organization to company code

Plant to Company code

Standard purchasing organization to plant

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 Purchasing organization to Plant etc.

20) What type of data mainly the information

record contains?

The information record mainly contains the data related to

the units of measurement, such as the products, vendor
price, materials used by specific vendors, etc. It also contains
information on the tolerance limit of the under-delivery of
data, planned delivery time, vendor evaluation data,
availability status for goods, etc.

21) What transaction code is used to delete a

batch in SAP MM?

In SAP MM, the transaction code MSC2N is used to delete a

batch. There is an alternate way to delete a batch record
which we can do by flagging the batch master record.

22) How can you release a purchase order?

Which Transaction Code is used to display and
reset the release of a purchase order?

We can release a purchase order at the header level. It is not

possible to release a single item in the purchase order, and
we have to release all the items at a time. The ME29N
Transaction Code is used to display and reset the release of
a purchase order.

23) What is the transaction code used to

extend the material view in SAP MM?

In SAP MM, the transaction code MM50 is used to extend the

material view.

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24) What do you understand by Consignment
Stock?

Consignment Stock is the material that is available at our

store premises but still belongs to the vendor (seller)/Owner
of the material. That's why we have to pay the vendor for
utilizing the material from consignment stocks.

25) What do you understand by Source List?

What is the transaction code used for creating
the Source List?

The Source List is used to identify the sources of supply for

materials. The transaction code ME01 is used for creating
the Source List.

26) What is the full form of ERS in the context

of SAP MM?

In SAP MM, ERS stands for Evaluated Receipts Settlement. It

refers to the process of settling down receipts of the goods
automatically. In the ERS process, an agreement between the
vendor and the user that vendors do not prepare an invoice
for the goods ordered. Rather, the system would
automatically generate and post the invoice document based
on the purchase order and goods receipts.

27) What are the pre-requisites for creating a

purchasing info record in SAP MM?

Following is the list of pre-requisites used for creating a

purchasing info record in SAP MM:

Material Number

MPN ( Manufacturer Part Number )

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Vendor Number
 Organizational level code

28) How can you flag a material for deletion in

SAP MM?

We can set a deletion flag at the client level, plant level, or

storage location level. The Transaction Code MM06 is used
to mark material for deletion.

29) How can you change the standard price in

the SAP master material?

There is no way to update or change the standard price for

the material data directly. However, we can perform the
following steps to change the standard price:

Fill in the future fields price (MBEW-ZKPRS) and the

materials' effective data (MBEW-ZKDAT).

Select Logistics > Material Management > Valuation >

Valuation Price Determination > Future Price.

30) What is the use of keeping a record of the

information of purchase?

It is necessary to keep a record of purchase information

because it collects various information of the vendors and
the materials supplied by them. For example, the current
price at which the vendor sells the material is recorded in the
purchase record.

31) What do you understand by the terms

Planned delivery and GR processing time?

Planned delivery: The term Planned delivery specifies the

number of calendar days required to obtain the material.
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GR processing: The term GR processing specifies the
number of workdays required after receiving the material for
inspection and placement into storage.

32) What do you understand by Goods Receipt

in SAP system?

After the vendor process the purchase order, the material is

delivered to the ordering party. This process is called a goods
receipt. So, the Goods Receipts is the phase in which the
ordering party receives the material, and the condition and
quality are verified. Once the material is verified against the
quality, then the Goods Receipt is posted.

33) What do you understand by purchase

requisition?

A purchase requisition is a primary document used as part of

the accounting method to launch merchandise or supply
purchase. We have to process the purchase order for suitable
controls, monitor the legitimacy of purchase, and identify the
business requirement for the products.

34) What is the full form of RFQ in SAP MM?

Why is it used?

In SAP MM, the full form of RFQ is Request For Quotation. It

is an invitation sent to sellers to provide the quotation
showing pricing and the terms and conditions for that
purchase. RFQ also contains information about the date of
delivery, goods and services, quantity, and submission date.

35) What do you understand by the terms

production order and purchase order?
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Production order: The term production order specifies which
material needs to be prepared at which time and location. It
is also concerned about the quantity required. It also
determines the components and sequence of operations and
the order costs that need to be resolved.

Purchase order: The Purchase order is issued by the Vendor

or the factory to supply a certain quantity of products and
services at a particular time and location.

36) What is the purpose of the material

valuation?

In SAP MM, material valuation is a module necessary to

determine the stock value of materials.

37) What is the use of document type in the

SAP system?

In the SAP system, the document type indicates different

procedures for a transaction within the system.

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38) What is the storage location in SAP MM?

In SAP MM, a storage location is where we can store our

stock of goods within the premises of a plant. Each plant has
at least one storage location assigned to it.

39) What is the use of Purchase Info Record?

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The Purchase Info Record is used to store information about
the material and the VendorVendor who supplies that
material.

40) How can you create a vendor account

group in SAP MM?

We can create a vendor account group in SAP MM by

following the steps given below:

Select display IMG > Financial Accounting > Accounts

Payable/Receivable >Vendor Accounts > Master Records >
Preparation of creating vendor master records > Define
Accounts groups with Screen Layout

41) What are the different Procurement types

that we can establish Purchase requisition in
SAP MM?

We can create a purchase requisition for the following

procurement types:

Stock transfer: It is used to specify a transfer of

material within the organization.

Subcontracting: It is used for sending raw material to

the seller and getting back finished material.

Standard: It is used for getting back finished material

from the seller.

External service: It is used to specify the availing

services from third-party sellers like maintenance.

Consignment: It is used to pay the seller regarding the

procuring material available on the company's
premises.

42) What do you understand by master data?

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Master Data is created centrally and is valid for almost all
applications, and it remains constant over time, but we have
to update it regularly. For example, the VendorVendor is a
type of master data, and it is used for creating purchase
orders.

43) What do you understand by consumption-

based planning (CBP)?

CBP stands for Consumption-Based Planning, which is used

to forecast to find out the future requirements. It is
dependent upon past consumption values. Based on CBP, the
net requirement of goods is calculated. CBP is activated
either when the stock level comes below a particular reorder
point or when the forecast needs to calculate past
consumption values.

44) What do you understand by the term

material requirement planning (MRP)?

In SAP MM, MRP stands for Material Requirement Planning.

It is a module or a sort of planning tool in SAP ERP
(Enterprise Resource Planning). It is used to assist
procurement and production planners in establishing realistic
and possible plans to help initiate procurement and
production procedures.

45) What is the difference between the terms

MRP and CBP?

The primary difference between the term CBP and MRP is

that when we plan material, we use MRP to predict the
requirements of materials based on SOP (sales and
operations planning). On the other hand, in CBP, we have to
forecast the MM (material management) depending upon the
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historical demand for materials.
46) What do you understand by a transaction
code in SAP MM?

A transaction code is made of letters, numbers, or both. It is

entered in the command field at the top of an SAP GUI
screen. Each function in SAP ERP has an associated SAP
transaction code that facilitates you to access any function
in SAP directly. A transaction code is also called t-code.

47) What is a material ledger in SAP MM?

In SAP MM, a material ledger is used to retain all

transactions related to purchasing and using materials for
producing goods. Material ledger data is valuation and
control data for a material in a plant for a specific posting
period. The material ledger contains data for material
movements that are relevant to the valuation of the material.

48) How can a vendor return be processed

without a purchase order reference?

A vendor return can be processed without a purchase order

reference by following the steps given below:

First, observe the return column and then select Item

Detail > MIGO_GR > Goods Receipt for Purchase Order.

Use the movement type 161 if the intention is to

deduct the stock; otherwise, use the 162 to undo the
changes.

Ensure that the document is a return purchase order,

and then save the document.

We can also use transaction code M21N for this

purpose.

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49) What do you understand by the Master
Production Schedule (MSP) in SAP MM?

In SAP MM, MSP stands for Master Production Schedule. It is

used to plan for individual commodities that need to produce
in each time, such as production, inventory, staffing, etc. It is
linked to manufacturing, where the plan shows how much
and when each product will be demanded.

50) What is the use of the Confirmation

Control Key (CCK)?

The Confirmation Control Key or CCK is used to specify

whether a notification for shipping is an expected purchase
order item or not.

51) What are the different accounts used in

Invoicing?

Following are the different accounts used in Invoicing:

Vendor accounts

Stock accounts

GR/IR clearing accounts

Tax account

Price differences account Cash difference clearing

account Freight clearing account.

52) What is a Batch Information Cockpit in

SAP MM?

The Batch Information Cockpit (BIC) is the main switching

point having a wide range of options for scrutiny and control.
In SAP MM, the BIC stores all the information related to
⇧analyzing
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TOP batch at a single location.
53) What do you understand by the Lot Size in
SAP MM?

In SAP MM, the Lot Size is the number of materials used for
re-ordering. It can be static, periodic, optimum, or fixed in
attributes.

54) What do you understand by release group

in SAP MM?

In SAP MM, the release group is a two-digit code 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 the purchase
order.

55) What is the use of 'Split Valuation' in SAP

MM?

In SAP MM, the Split Valuation is used in cases where we

need to evaluate various material stocks separately. It can be
because of different origins, quality, status, etc. In Split
Valuation, the material is managed at several partial stocks,
which are sub-stocks of main material stock. Any transaction
relevant for valuation is carried at this partial stock level. In
the accounting view, we define if we need a split valuation for
any material.

56) How is Material Valuation associated with

Financial Accounting?

In SAP MM, Material valuation is directly associated with

Financial Accounting. If you make any changes in the stock
value, it also updates the G/L account in Financial
Accounting.
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57) What are the accounts created in SAP
MM? What is the importance of the
assignment of these accounts?

In SAP MM, the assignment of account is necessary for the

purchase order item. It is important as it determines the
following things:

Account assignment type

An account that will be charged when you post the

invoice or goods receipt

Account assignment data that you have to provide

58) How is the list of all reservations in the

system displayed?

The list of all reservations can be displayed by running the

RM07RESL report in SAP MM.

To change a batch record, we can use the transaction code

MSC2N. Following is the navigation path of changing the
batch record:

SAP  Menu  ->  Logistics  ->  Materials  Management  -

> Material Master -> Batch ->> Change  

Note: You should always be aware that the changes in

the batch record are also available for review.

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