SAP MM –SLOT-01
PROCUREMENT INTERVIEW QUESTIONS AND ANSWERS
Q.1 What is difference between contract and scheduling agreement?
Ans- 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.2 What is difference between planned and unplanned services?
Ans – 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.3 If you have multiple line items in purchase order, can you release line by line that purchase order?
Ans– No, release is done only at header level in a combined way for all line items in case of purchase order.
Q.4 What are important steps in procurement life cycle?
Ans– Procurement Life-Cycle
Firstly, establishing a framework for any size organization is essential to the development of success and secondly an understanding of the processes will help build and develop the relationship between a buyer and seller a Procurement Life Cycle is a step by step process, identifying a requirement and a need but will differ from business to business; however, there are some common stages/techniques that you should be aware of:
Identifying Needs – The first step in procurement is identifying there is a need for particular goods. Once a need has been identified they can be specified in more detail.
Find Suppliers – This stage may include reviewing companies and prices, company standards (suppliers may need ISO accreditation for instance) and terms and conditions.
Purchase Order – A buyer will raise a purchase order specifying details such as amount, costs, delivery dates in an agreement with the supplier.
Dispatch/Delivery – Items are dispatched to be received by the date confirmed on the purchase order. Goods are checked on receipt for quality, amount and other criteria.
Invoicing and Payment – Invoices are sent by the seller for payment. The purchaser would usually have identified typical payment terms when seeking a supplier.
Record and aftercare – This stage will allow procurement teams to monitor spending, identify areas to seek reductions, manage stock levels and predict future cash-flows.
Q.5 What is difference between purchase requisition and purchase order?
Ans– A purchase requisition is a document that an employee within your organization creates to request a purchase of goods or services. When you fill out a purchase requisition, you are not yet purchasing anything. You are merely beginning the process of a purchase by asking for internal permission.
purchase order – The purchasing department creates the purchase order once a purchase requisition has been approved. If an organization does not use purchase requisitions, other employees may fill in purchase orders for approval as well. Unlike a purchase requisition, the purchase order is an external document. Purchasing sends it to the vendor as a set of instructions for how to fulfill your order and process your payment.
Q.6 What is a RFQ and how it is different from quotation?
Ans– A RFQ is a purchasing document and an invitation to a vender(s) for quotation regarding needed materials or services. If multiple an RFQ is sent to multiple vendors, the system can automatically determine the best quote and send rejection letters in response to all others. The RFQ and the Quotation Form are one in the same in the system as vendor quotes are entered directly in the RFQ.
Q.7 What are transactions that will cause change in stock?
Ans– 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.8 What do you mean by reservation?
Ans –A Reservation is a request to the warehouse to keep materials ready for a goods issue at a later date (for future use) and for a certain purpose.
A Reservation for goods Issue can be requested by various departments by various account assignment objects (such as cost center, order, assets)
It is used to plan an inward movement in advance.
A Reservation ensures that material is available when it is needed
It is also simplified and accelerates the goods issue process and prepares the task at the point of goods issue.
Reservation can be taken into account by MRP so that a required material can be procured quickly if it is not available in the warehouse.
A Reservation results in an entry in the requirement-planning file.
Anyone reservation can have only one movement type and one account assignment
Q.9 What do you mean by release procedure?
Ans – Release procedure means approval of documents like purchase orders and purchase requisition manually by the criteria defined in the configuration.
Q.10 What do you understand by posting period?
Ans– 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.
Q.11 What is invoice verification?
Ans –It is the task of Invoice Verification to check the accuracy of invoices received from vendors with respect to contents, prices, and arithmetic. An important activity involves matching up invoices with purchase orders or goods receipts. And Checking the accuracy of invoices with respect to contents, prices, and arithmetic.
Q.12 Mention the document types that are used in purchase requisition?
Ans standard purchase order.
Q.13 How do you change a purchase requisition once it is issued?
Ans: Yes, it is possible to change to make the changes you have to again unreleased the PR, if the changeability option is used in the release strategy of the PR, then you can change it and then again release
Q.14 Can changes be made in PO once it is released?
Ans– if any PO is released and after that any changes are made into it should go for re-release.
use changeability indicator as 4, in configuration SPRO-MM-Purchasing-P. O-Release Procedure for Purchase Orders-Define Release Procedure for Purchase Orders-Release indicator- Use 4 for Changeable field which is Changeable, new release in case of new start. or val. change
This means, a new release would be called if the value changes(Increases)
Q.15 Why do we use document types in SAP?
Ans– The document type is a key that is used to classify accounting documents and distinguish between business transactions to be posted. The document type is entered in the document header and applies to the whole document.
Q.16 How is scrap material taken care of in sub-contracting?
Ans– Suppose your End/Finished product is say SUGAR. and your components in this case is SUGAR CANE and you will receive MOLASIS as a Byproduct.
Maintain a BOM for End product SUGAR.
Give components as SUGAR CANE
give by product Component MOLASIS as -ve
Create a PO with Subcontracting Doctype.
Send the Material to Subcontractor Thru. MB!B 541 Mov type or use ME2O Trxn code.
Now once your Finished product is processed by subcontractor he will send you back.
Make GR with 101 Mov type.
You can see the End product with 101 Mov type
and Your component posted is with 543
and your by product posted is with 545 Mov type.
You can take the Byproducts into your premises thru. MB1B 542 Mov type. Or you can use MB1C 531 Mov type.
Q.17 How to handle free items in PO?
Ans– In PO Creation (ME21N), you will find a Free Items Check Box in the Item Overview (to the right of the Returns Item Check box). If you tick that, the item will be treated as a free item. You will see that the Tick in the Check boxes in the Invoice tab will also be removed. The condition tab will no longer appear and you won’t be able to put in prices. However, this material will reflect in your valuated stock when you do GR.
Q.18 How would you short close PO’s?
Ans– You need to tick delivery completed indicator in Delivery tab or Make PO qty = Delivered qty.
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