Q19: Explain the terms production order and purchase order?

Answer:

Production order: It decides which material needs to be prepared at which time and
location and also concern about the quantity required. It also determines about
components and sequence of operations that need to be involved. Moreover, it also
concerns about the order costs need to be resolved.

Purchase order: It is issued by a vendor or a factory to supply a certain quantity

of products and services at a particular time and location.

Q20: What is the process order in SAP MM?

Answer: When thorough planning and execution of process manufacturing is

determined, it is known as process orders. It identifies the production of
materials in a production run.

Q21: What is a transaction code in SAP MM or material management?

Answer: T-code is a term used for transaction code. It has numbers of letters or
both which are used to enter the command field that is available at the top of the
SAP GUI screen. Kindly note that every function in SAP ERP equips with the SAP
transaction code that is related to it. We can directly look at any function in SAP
with the assistance of the transaction code.

Q22: How can you differentiate the terms MRP and CBP?

Answer: The primary difference between 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). Moreover, in CBP, we have to forecast the MM (material
management) depended upon the historical demand for materials.

Q23: What do you mean by the Master production schedule (MSP)?

Answer: MSP 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.

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Q24: Name the different types of Basic Procurement?

Answer:

External vs. Internal Procurement

Procurement for Stock vs. Consumption
Q25: How can you differentiate procurement for stock vs. consumption?

Answer:

Procurement for Stock: It means the storage of material in stock. In it, the
material gets stored once it received from the seller. The quantity of stock
material depends upon the demand for the material. To record all information about
the stock, we maintain the master record in the system.
Procurement for Direct Consumption: When the storage of material is used or
consumed once it received, it is known as procurement for direct consumption.
Before ordering material for consumption, a master record is maintained within the
system.