MIS 305 SDSU EXAM 2

What are the key organizational elements in the fulfillment process?

client, company code, sales area, plant, storage location, shipping point, and credit control area. Three of these sales area, shipping point, and credit control area are unique to fulfillment.

What are the typical characteristics of a wholesale channel?

Does not include sales taxes, requires a minimum purchase volume with volume discounts, and may designate specific plants for deliveries. Each channel has its own strategies, pricing systems, and characteristics for getting goods to the customer.

What is a delivery plant in the fulfillment process?

A facility from which the company delivers products and services to its customers, typically a manufacturing and/or storage facility. A plant can be assigned to more than one distribution chain.

What are examples of a shipping point?

A location in a plant from which outbound deliveries are shipped, such as a loading dock, rail depot, or shipyard. It can also be a designated group of employees handling special deliveries.

What are presales activities?

Include receiving customer inquiries, creating quotations, managing customer contacts, and creating long-term agreements such as contracts and scheduling agreements. A quotation is a binding agreement to sell specific products under clearly defined delivery and pricing terms.

What are the three segments of data in a Customer Master?

General data (client level — name, address), accounting data (company code level — payment terms, reconciliation accounts), and sales area data (specific to a sales area — shipping, billing, partner functions).

Define pricing conditions.

Master data used to determine selling prices, including gross prices, discounts, freight, surcharges, and taxes. A procedure called the condition technique determines which conditions apply to a particular customer order.

What triggers sales order processing?

Triggered by the receipt of a customer's purchase order. When received, the company creates a sales order, which is an internal document used to manage and track the order through the process.

What is the correct order of fulfillment process steps?

In order: presales activity, sales order processing, shipping, billing, and payment. Presales activities are optional, and the process formally begins when a customer purchase order is received.

What is the final step of the fulfillment process?

Receipt of payment from the customer is applied to open items in the customer's account. The bank account is debited, the customer and accounts receivable accounts are credited, and an FI document is created.

Define goods issue in the fulfillment process

The final task in shipping indicates the shipment has left the facility, resulting in inventory accounts being credited and cost of goods sold being debited. A material document and FI document are created to record the movement and its financial impact.

Define billing

Creates invoices, credit memos, and debit memos for products or services delivered to customers. When completed, accounts receivable is debited and the sales revenue account is credited by the invoice amount.

What is a Bill of Materials (BOM)?

A complete list of all raw materials and semifinished goods needed to produce a specified quantity of a finished good. BOMs can be single-level or multi-level and are defined at the plant level, meaning different plants may use different BOMs for the same material.

What is a work center?

A location where value-added work needed to produce a material is carried out, such as drilling, assembling, or painting. It defines available capacity, is associated with a cost center, and uses standard value keys to calculate time needed for operations.

What is a product routing?

A list of operations a company must perform to produce a material, specifying the sequence, work center, and time needed for each operation. The routing and BOM are linked via component assignment, which ties BOM materials to specific operations.

What is material staging?

The operation whereby component materials are moved from storage and prepared for use in production. It is a fixed time element, taking the same amount of time regardless of the quantity being produced.

What triggers production in a make-to-stock strategy?

Production is triggered by the material planning process when inventory falls below predefined levels. The result is a planned order, which is a formal request indicating what materials are needed, how many, and when.

What are the three basic time elements in production?

Setup time (configuring the work center), processing time (machine and labor time), and teardown time (returning machines to original state). These can be either fixed (independent of quantity) or variable (dependent on quantity produced).

What are examples of production resource tools (PRTs)?

Movable resources shared among work centers, such as calibration instruments, jigs and fixtures, and engineering drawings. A limited number are available for use across work centers as needed since it is not economical to keep them everywhere.

What are the outcomes of a goods issue to a production order?

The material master is updated, general ledger accounts reflect increased consumption and reduced inventory, and a material document and FI document are created. Actual material costs are also added to the production order, which serves as a cost collector.

When does confirmation in production occur?

Occurs when finished goods have been produced and the worker records how much was completed, where, and by whom. The production order is updated to reflect quantities produced, operations completed, and dates worked.

What data is included in a confirmation?

Includes quantities produced, scrapped, and requiring rework; operations and durations; the work center used; personnel data; and reason for variance if the confirmed quantity differs from the planned quantity.

What user inputs are included in a goods receipt in production?

The user provides the production order number, quantity received, date, and plant and storage location. All other data such as inventory accounts and valuation method are obtained automatically from the material master.

What does a stock/requirements list contain?

Identifies all activities that can impact inventory quantity, including current stock levels, independent requirements, planned orders, and sales orders. It updates as orders are processed until production is completed and inventory increases.

What is the key organizational level in inventory management?

The storage location, which is associated with plants, which are associated with company codes. The material master, specifically the plant/data storage view, is the most relevant master data in IM.

What is a stock transfer used for?

Physically moves materials within the enterprise from one location to another — between storage locations, between plants in one company code, or between plants in different company codes. Two options are available: a one-step procedure recording issue and receipt simultaneously, or a two-step procedure completing them separately.

Describe a storage location-to-storage location transfer.

Moves materials between two storage locations within the same plant, such as from a staging area to a permanent location. Because materials are valued at the plant level, this transfer does not affect valuation and no FI document is created.

What is the hierarchy of a warehouse?

Divided into storage types, which are further divided into storage sections, which contain storage bins where materials are physically stored. Storage bins are the smallest unit of space and have unique addresses identifying their location.

What is a material-to-material posting?

A transfer posting used to change the material number of a material when its characteristics change over time, such as wort becoming beer during fermentation. It is common in pharmaceutical and chemical industries.

Name the different storage types.

Divisions of a warehouse based on characteristics of the space, materials, or activity, such as shelf storage, pallet storage, rack storage, hazardous storage, and cold storage. Interim storage types such as receiving and shipping areas serve as physical links between IM and WM.

What are examples of storage sections?

Group bins with similar characteristics, such as fast-moving, slow-moving, heavy, light, large, and small. Fast-moving materials are placed close to receiving and shipping areas, while slow-moving materials are stored further away.

What do shelves, rows, and stacks define?

Define storage bin addressing in a shelf storage environment, where each unique combination of row, stack, and shelf number is one storage bin. Each bin has a unique address used to identify its exact location in the warehouse.

Define interim storage.

Temporary storage types that serve as the physical link between inventory management and warehouse management, such as a receiving area where materials are placed after a goods receipt before being moved to permanent bins. Interim storage types do not require bins to be created in advance.

Define confirm warehouse movement.

Involves updating the transfer order after employees have physically moved materials, recording quantities and bin locations. The ERP system then automatically updates all associated reference documents such as the delivery document and transfer requirement.

What organizational data is used in procurement?

Include client, company code, plant, storage locations, purchasing organization, and purchasing group. A plant in this context is the receiving location where materials are delivered.

What is a storage location?

Places within a plant where materials are kept until needed, ranging from small bins to entire buildings. Each storage location belongs to only one plant, but a plant can have multiple storage locations.

Define a purchasing organization.

The unit within an enterprise that performs strategic purchasing activities — evaluating vendors and negotiating contracts, pricing, and terms — for one or more plants. The three main models are enterprise-level, company-level, and plant-level.

Define an enterprise-level purchasing organization.

The most centralized, with one purchasing organization for the entire enterprise and all its plants, assigned to each plant but not to a specific company code. This enables the enterprise to negotiate favorable agreements through large volume purchasing.

Define a company-level purchasing organization

Single purchasing organization responsible for multiple plants within one company code, assigned to both the plant and the company code. It is less centralized than the enterprise-level model but still coordinates purchasing across multiple plants.

Define a plant-level purchasing organization.

Most decentralized, with each plant having its own purchasing organization assigned to both the plant and its company code. This is preferred when vendors serve local geographic areas and local knowledge enables better agreements.

Define purchasing group.

Individual or group responsible for day-to-day purchasing activities including creating requisitions, requesting quotes, and monitoring purchase orders. The purchasing group also serves as the main point of contact with vendors.

What are the three segments of the Vendor Master?

General data (client level — name, address), accounting data (company code level — payment terms, reconciliation accounts), and purchasing data (purchasing organization level — pricing, order, and invoice terms).

What is in the General Data segment of the Vendor Master?

Includes the vendor's name, address, and communication information, defined at the client level and consistent across all company codes and purchasing organizations. It can be maintained by either the purchasing or accounting department.

What is in the Purchasing Data segment of the Vendor Master?

Includes terms related to pricing, creating purchase orders, and verifying invoices, defined at the purchasing organization level. If multiple purchasing organizations deal with the same vendor, separate purchasing data must be maintained for each.

Define purchasing info records.

Combines material and vendor data, containing delivery times, tolerances, quantities, and pricing conditions specific to one vendor and one material. The company uses this data as default values when creating a purchase order for that vendor-material combination.

Define consumable materials.

Acquired to be used within the organization, such as office supplies, and require an account assignment category identifying the cost object and expense account to be charged. Unlike stock materials, consumable materials are tracked as an expense rather than inventory value.

What is a three-way match?

Compares the purchase order, goods receipt document, and vendor invoice to ensure quantities and prices are consistent before approving payment. If discrepancies exceed tolerances, the invoice is blocked and further action is required.

Define a purchase order.

Formal commitment sent to a vendor to purchase specified materials under stated terms, consisting of a header and item details. No financial documents are created at this step because no money or goods have yet been exchanged.

Define goods receipt in procurement.

Records materials received from a vendor into inventory, debiting the trading goods inventory account and crediting the GR/IR account. A material document and accounting document are created, and both the purchase order history and material master are updated.