Interview Questions

Dear readers, these SAP-MM Interview Questions have been designed especially to get you acquainted with the nature of questions you may encounter during your interview for the subject of SAP-MM. As per my experience, good interviewers hardly planned to ask any particular question during your interview, normally questions start with some basic concept of the subject and later they continue based on further discussion and what you answer:

Q: What do you know about SAP?

A: SAP stands for “Systems, Applications and Products in data processing”. Amongst the software provider, SAP comes up as the world’s third largest. 5 IBM employees founded SAP in 1972 in Walldorf, Germany.

Q: What are Features of SAP ERP?

A: SAP is an enterprise resource planning software which is produced by the German corporation. SAP is a enterprise information software that was basically designed to manage resources, information and activities that are required to complete business processes like procurement and managing orders, billing of orders and management of human resources.

Q: What are the organizational levels in SAP R/3?

A: The top level of the organizational structure is the client, followed by company code, which represents a unit with its own accounting unit. The next level down is plant where procurement activities take place. A plant will produce goods and makes goods available for the company. The purchasing organization is the legally responsible for procurement transactions. This group is further subdivided into purchasing groups.

Q: What are important steps in procurement life cycle?

A: Procurement Process starts with gathering requirements, then creating a purchase requisition and then we create a formal document that has to be sent to vendor i.e. purchase order. After this goods will be supplied by vendor and goods receipt is done along with invoice verification. Then vendor is paid for supplied goods and services.

Q: What do you mean by special stocks?

A: Special stocks are stocks that are managed differently as these stocks did not belong to company and these are being kept at some particular location.

Q: How stock is being transferred from one plant to another plant?

A: Stock within plants is transferred with the help of stock transport order. One plant order the goods internally from another plant(receiving plant/issuing plant) with the help of stock transport order.

Q: What are some of the movement types for stock transport order?

A: One step transfers of materials can be posted using movement type 301. Other movement types are 303, 351, 641, or 643 in the stock transport order.

Q: What is difference between purchase requisition and purchase order?

A: Purchase requisition is an internal document and it is a request that is made to purchasing organization to procure certain list of material while purchase order is formal document that is given to vendor containing list of items to be procured from vendor.

Q: What is a RFQ and how it is different from quotation?

A: RFQ is request for quotation and it is a form of invitation that is sent to vendors to submit quotation indicating pricing and their terms and conditions while quotation is a reply by a vendor in response to request for quotation.

Q: What are transactions that will cause change in stock?

A: Goods receipt and goods issue will cause change in stock as goods receipt will increase warehouse stock and goods issue will decrease warehouse stock.

Q: What do you mean by reservation?

A: Sometimes, stock need to be blocked in advance so that it can be available at a particular point of time. This is known as reservation. Reservation ensures that stock is available and it can be used when required. Reserved quantity can be viewed by tcode MMBE.

Q: Can you manually create purchase requisition with reference to documents such as purchase order or scheduling agreement?

A: No, purchase requisition cannot be created with either of these as it is an internal document which is controlled by purchase organization.

Q: Is material and vendor data available at all organizational levels?

A: Yes, material and vendor data is available at all levels as it is normally created for company and it is valid for the levels below company.

Q: What do you mean by release procedure?

A: Release procedure means approval of documents like purchase orders and purchase requisition manually by the criteria defined in the configuration.

Q: If you have multiple line items in purchase order, can you release line by line that purchase order?

A: No, release is done only at header level in a combined way for all line items in case of purchase order.

Q: What do you mean by material type?

A: Materials with some common attributes are grouped together and they are assigned to a material type. This will differentiate materials and allow organization to manage different materials in systematic manner in accordance to company’s requirement.

Q: What is a source list?

A: Source list include list of possible sources of supply for a material over a given framework of time. A particular material can be ordered from different vendors in different time intervals. This information can be maintained in a source list.

Q: What do you mean by consignment stock?

A: In Consignment, material is available at our store premises, however it still belongs to the vendor(seller)/Owner of the material. If you utilize the material from consignment stocks, then you have to pay to the vendor.

Q: What is invoice verification?

A: Once goods are procured from vendor and placed in company’s premises through goods receipt then we need to pay to vendor for acquired goods and services. The amount to be paid along with details of material is provided by vendor in form of document that is known as invoice. Before paying to vendor we need to verify the invoice. This process of verifying invoice and paying to vendor is known as invoice verification.

Q: What do you mean by outline agreement?

A: Outline agreement is a long term purchasing agreement with vendor containing terms and conditions regarding the material that is supplied by vendor. Outline agreement are valid up to certain period of time and cover a certain predefined quantity or value.

Q: What is difference between contract and scheduling agreement?

A: Contract is a long term outline agreement between vendor and ordering party over predefined material or services over certain framework of time whereas scheduling agreement is a long term outline agreement between vendor and ordering party over a predefined material or service which are procured on predetermined dates over a framework of time.

Q: What is difference between planned and unplanned services?

A: In planned services at the time of procurement specifications like quantity and price are known in advance. It means nature and scope of service is clear before procurement whereas in unplanned services at the time of procurement specifications like quantity and price are not known in advance. It means nature and scope of service is not clear before procurement. These services can be extended as per the requirement.

Q: What is quota arrangement?

A: A particular material can be procured from different vendors depending upon the requirement. So, total requirement of a material is distributed to different vendor’s i.e. quota is assigned to each source of supply. This is known as quota arrangement.

Q: What do you understand by posting period?

A: Various documents like purchase order, request for quotation, goods receipt are essential documents in a business. These documents need security i.e. if any of documents is posted incorrectly then business can be affected at various concern levels. So, to secure these documents we have a concept of posting period. Posting period means it will allow you to post and make changes in the documents only in a specific time period.

What is Next?

Further, you can go through the examples which you have practised with the subject and make sure you are able to speak confidently on them. If you are fresher then interviewer does not expect you will answer very complex questions, rather you have to make your basics concepts very strong.

Second it really doesn't matter much if you could not answer few questions but it matters that whatever you answered, you must have answered with confidence. So just feel confident during your interview. We at tutorialspoint wish you best luck to have a good interviewer and all the very best for your future endeavour. Cheers :-)

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