MIS 305: Exam 3 Study Guide

What type of organizational data is utilized in the procurement process?

client, company code, plant, storage location, purchasing org, purchasing group

What is a storage location?

Places within a plant to store goods/materials until they are needed

Define a purchasing org

unit within an enterprise that performs strategic activities related to purchasing for one or more plants

Define an enterprise-level purchasing organization

the cross-company code purchasing organization which is the centralized procurement model that is used across the enterprise

Define a company-level purchasing organization

the cross-plant model which is responsible for multiple plants in one company code

Define a plant-level purchasing group organization

a plant-specific purchasing organization in which each plant has its own purchasing organization

Define purchasing group

an individual or group of individuals responsible for purchasing activities of a material

What are the 3 segments that the vendor master are grouped into?

1st: general data

2nd: accounting data

3rd: purchasing data

In the Vendor Master, what type of data is in the General Data segment?

Includes information on client name, address, communication (phone), and search term

In the vendor master, what type of data is in the Purchasing data segment?

Includes purchasing organization partner function and terms

Define purchasing info records

A combination of purchasing and vendor data

Define consumable materials

Materials that are acquired to be consumed or used by the organization

What is a 3 way match?

The most common method of invoice verification that includes the purchase order, good receipt document, and invoice. Its purpose is to ensure quality and prices between all three documents is consistent

Define purchase order

A formal communication to the vendor that represents the commitment to purchase indicated materials understated terms

Define goods receipt

Records the receipt of materials into storage which ultimately increases inventory quantity

What are the key organization elements in the fulfillment process?

client, company code, sales area, plant, storage location, shipping point, and credit control area

What is the typical characteristics of a wholesale channel?

Does not include sales tax when calculating prices, it requires a minimum volume of purchased and offers volume discounts, it may designate a specific plant or plants from which deliveries are made

In the fulfillment process, what is a plant?

Facility from which the company delivers products an services to customers

What are examples of a shipping point?

Loading dock, a railed depot, or a mail room

What are the pre-sales activities?

Trigger, data, tasks, and outcomes

What are the 3 segment of Data in a customer master?

General data, accounting data, and sales area data

Define price conditions

master data that companies use to determine selling prices of their products

Which action triggers sales order processing in the fulfillment process?

Receipt of a customer’s purchase order

What is the correct order of process steps for the fulfillment?

Presales activities, sales order processing, shipping, billing, customer payment

What is the final step of the fulfillment process?

Receipt of payment

Define goods issue

Movement of material/goods out of the warehouse and the transfer of ownership

Define billing

Creation of a variety of document like invoices, credit memos, and debit memos

What is BOM? (Bill of Materials)

identifies components necessary for production of a material. it includes a complete list of all raw materials and semi-finished goods that are included in the production process

What is a work center?

Location where value-added work needed to produce a material is carried out. Operations such as drilling, assembling, and painting are conducted.

What is product routing?

List of operations that a company must perform to produce a material. Also specifies the sequence in which the process must be carried out

What best defines material staging?

Operation in which component materials are moved from storage and prepared for use

If a company has adopted the make-to-stock strategy, what is the trigger for the production of goods?

The need to increase inventory

What are the basic time elements relevant to producing a material?

Setup time, processing time (machine & labor), and teardown time

What are some examples of production resource tools (PRT’s)

Movable resources shared among different work centers

Examples: calibration/measurement instruments, jigs & fixtures, and documents like engineering drawings

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

1. Material master is updated to reflect a reduction of quantity on hand and inventory value of the material issued

2. General ledger accounts are updated. Specifically, the relevant material consumption account(s) and inventory account(s) are updated to reflect an increase in consumption and a reduction in inventory

3. Material reservations are updated. Specifically, reservation quantities are reduced by the quantity of materials issued. 

4. Because this step involves a goods movement, a material document is created to record the data associated with the movement. 

5. Because the general ledger accounts are affected, an FI document is created to record financial accounting data. 

6. Actual costs associated with material consumption are calculated and added to the production order. Recall that the production order is a cost object and serves as a collector of costs incurred during production. During the goods issue step, material costs are debited to the production order. A corresponding management accounting document is created. 

7. A goods issue document that notes the materials and quantities issued can be created, although it is not required. This document is included with other shop papers that have already been printed, and it serves as a record of which goods were issued. Note that a goods issue document is not the same as a material document. It is used when paper records of the process are maintained.

When does confirmation in the production process happen?

Once finished goods have been produced.

What type of data is included in a confirmation?

Quantity, operations completed, durations, work center, personnel data, and reason for variance.

What user inputs are included in a goods receipt?

Production order number, quantities, dates, and locations.

What does a stock requirement list contain?

Current inventory level, independent requirements, planned orders, and other activities consuming inventory

What is the key organizational level associated with inventory management?

Storage location

What is a stock transfer used for?

To physically move materials within an enterprise from one organizational level (storage location/ plant) to another.

Describe a storage location-to-storage location transfer

A stock transfer between two storage locations within the same plant

What is the hierarchy of a warehouse?

warehouse —> storage types —> storage sections/ picking areas —> storage bins

What is a material-to-material posting?

Used to change the material number of a material. Common in industries such as pharmaceuticals where the characteristics of a material changes over time

Name the different Storage types

Shelf storage, pallet storage, and rack storage

What are examples of storage sections?

fast moving, slow moving, heavy weight, light weight, large, and small

Shelves, rows, and Stacks define what type of storage?

Storage bins

Define interim storage

Utilized for materials before Warehouse Management steps are completed. They are also utilized in the fulfillment process when materials are to be shipped from a warehouse managed storage location

Define Confirm Warehouse Movement

Process of verifying and updating a transfer order (TO) after materials have physically moved within the warehouse

What is a transfer requirement?

Used to plan the movement of materials in and out of a warehouse

Goods Receipt movement

Process of recording the receipt of materials into inventory, which ultimately increases quantity of materials

Goods Issue movement

Process of recording the removal of materials from inventory, which ultimately decreases quantity of materials