If you’re preparing for an SAP MM interview, it’s crucial to familiarize yourself with common questions and answers that can help you succeed. In this blog, we’ll cover the top 25 SAP MM interview questions with detailed answers. These questions will help you understand key concepts in SAP MM and prepare effectively for your interview.
1. What is SAP MM?
Answer: SAP MM (Materials Management) is a module in SAP ERP Central Component (ECC) that provides companies with materials, inventory, and warehouse management capabilities. It ensures that materials are available in proper quantities and locations to support production and other business processes.
2. What are the essential components in SAP MM?
Answer: The essential components in SAP MM are:
- Purchasing
- Inventory Management
- Material Master
- Invoice Verification
- Physical Inventory
- Material Requirement Planning (MRP)
3. Explain the procurement process in SAP MM.
Answer: The procurement process in SAP MM involves the following steps:
- Requirement determination
- Source determination
- Vendor selection
- Purchase order processing
- Purchase order follow-up
- Goods receipt and inventory management
- Invoice verification
- Payment processing
4. What is a Material Master?
Answer: The Material Master is a central repository of information on materials, including data related to procurement, production, inventory management, and sales. It ensures consistent and accurate data across various departments.
5. What is a Purchase Requisition?
Answer: A Purchase Requisition is an internal document that requests the purchasing department to procure a certain quantity of materials or services at a specified time.
6. What is a Purchase Order?
Answer: A Purchase Order (PO) is a formal document issued to a vendor indicating types, quantities, and agreed prices for products or services. It is a binding contract between the vendor and the purchasing organization.
7. Explain the difference between a Purchase Requisition and a Purchase Order.
Answer: A Purchase Requisition is an internal request for materials or services, while a Purchase Order is an official document sent to a vendor to procure those materials or services.
8. What is Inventory Management?
Answer: Inventory Management in SAP MM involves tracking and managing the quantity and value of materials on hand. It ensures accurate and real-time inventory data for planning, control, and decision-making purposes.
9. What is a Goods Receipt?
Answer: A Goods Receipt is the process of receiving materials into the warehouse or storage location, confirming that the delivered goods match the Purchase Order in terms of quantity and quality.
10. What is the difference between Goods Receipt and Goods Issue?
Answer: Goods Receipt refers to the receiving of materials into inventory, while Goods Issue refers to the removal or withdrawal of materials from inventory for production or sales purposes.
11. What is Invoice Verification?
Answer: Invoice Verification is the process of confirming that an invoice from a vendor is accurate and matches the Purchase Order and Goods Receipt details before processing payment.
12. What is a Material Type in SAP MM?
Answer: Material Type categorizes materials based on their usage and characteristics, such as raw materials, finished products, or trading goods. It controls the type of transactions allowed for a material.
13. Explain the concept of Valuation Class in SAP MM.
Answer: Valuation Class groups materials with similar properties for accounting purposes, determining the general ledger accounts used for inventory postings.
14. What is a Movement Type in SAP MM?
Answer: Movement Type specifies the type of material movement in and out of the inventory, such as goods receipt, goods issue, stock transfer, and physical inventory adjustments.
15. What is a Reservation in SAP MM?
Answer: A Reservation is a request to the warehouse to reserve materials for a specific purpose at a later date, ensuring the availability of materials when needed.
16. What is a Stock Transfer?
Answer: Stock Transfer is the process of moving materials from one storage location to another within the same plant or between different plants.
17. What is a Physical Inventory in SAP MM?
Answer: Physical Inventory involves counting and verifying the physical stock of materials in the warehouse to ensure inventory accuracy and reconcile any discrepancies with the system records.
18. What is the purpose of MRP (Material Requirement Planning) in SAP MM?
Answer: MRP ensures that materials are available for production and delivery by planning procurement and production based on sales orders, forecasts, and stock levels.
19. What is Source List in SAP MM?
Answer: The Source List is a list of approved vendors for a specific material over a defined period, used to determine the preferred vendors during the procurement process.
20. What is Quota Arrangement in SAP MM?
Answer: Quota Arrangement allocates the total requirement of a material among different vendors based on predefined percentages, ensuring a balanced distribution of procurement.
21. What is a Pricing Procedure in SAP MM?
Answer: Pricing Procedure defines the sequence of pricing conditions, such as discounts, surcharges, and taxes, used to calculate the final price of a material or service.
22. What is a Release Strategy in SAP MM?
Answer: Release Strategy defines the approval process for Purchase Requisitions and Purchase Orders, ensuring that documents are reviewed and approved by authorized personnel before execution.
23. What is a Vendor Evaluation in SAP MM?
Answer: Vendor Evaluation assesses vendors based on criteria such as price, quality, delivery performance, and reliability, helping organizations select and manage their suppliers effectively.
24. What is Consignment Stock in SAP MM?
Answer: Consignment Stock refers to materials that are stored at the company’s premises but owned by the vendor. Payment to the vendor is made only when the materials are consumed or used.
25. What is the significance of Batch Management in SAP MM?
Answer: Batch Management allows tracking and managing materials in batches, ensuring traceability and quality control throughout the production and supply chain processes.
By mastering these SAP MM interview questions and answers, you’ll be well-prepared for your SAP MM interview. To deepen your knowledge and skills in SAP MM and other SAP modules, consider joining a reputable SAP Training Institute. Professional training can provide hands-on experience, expert guidance, and the confidence to excel in your SAP career.
Join our SAP Training Institute today and take the next step towards becoming an SAP expert!
