Integrated Business Processes with ERP Systems 1st Edn Magal & Word | TEST BANK

Chapter 1: Introduction to Business Process Learning Objectives After completing this chapter you will be able to: 1. Define the functional organizational structure, and explain why this structure creates problems for modern businesses 2. Describe key business processes in an organization 3. Identify the main integration points between and among processes 4. Understand the cross-functional nature of processes and their relationship to organizational areas 5. Adopt and apply an integrated perspective to business processes 6. Describe GBI’s organizational structure 7. Explain how the SAP system promotes an integrated approach to business processes

Chapter Outline and Teaching Suggestions 1. The Functional Organizational Structure a. The Silo Effect b. Enterprise Systems Discuss how companies are organized, and explain that the functional structure is the most common organizational structure. You can use a university or company or a business school department that you are familiar with as an example. Point out that processes are crossfunctional. Ask the question: Why is the functional structure so common? Figure 1-1 will assist you in explaining the cross-functional nature of business processes.

Explain the silo effect and its negative implications for modern business organizations. You can give an example such as creating a sales order in sales and marketing with no integration or communication with inventory management or production.

Point out that the nature of the functional organizational structure and the cross-functional nature of processes directly conflict with each other.

Explain the benefits of an enterprise system (ES) (i.e., supports end-to-end processes, productivity, competitive edge, monitoring and changing of business processes, etc.).

2. Business Processes

a. b. c. d. e. f. g. h. i. j. k.

Procurement - Buy Production - Make Fulfillment - Sell Material Planning - Plan Inventory and Warehouse Management - Store Lifecycle Data Management - Design Asset Management and Customer Service - Service Human Capital Management - People Project Management - Projects Financial Accounting - Track for Track for External Reporting Management Accounting - Track for Internal Reporting

Define and explain a business process. Point out that organizations use many processes to achieve their objectives and they employ specific terms to identify the processes. Processes can be directly related or closely related to creating and delivering goods and services. Use Figure 1-2 to illustrate a process that is executed in response to a need (trigger). The process is carried out through a sequence of steps and results in an output. You can use an example such as ordering supplies.

Processes can be supported by other processes and can have numerous sub-processes. Point out that communication and coordination of tasks are very important. Figure 1-3 can assist you in explaining this point. Ask students to indentify some other processes that they are familiar with.

Describe and give examples of the business processes (A - K). Figures 1-4 through 1-10 will assist you.

3. Global Bicycle, Incorporated (GBI) Explain that Global Bicycle, Incorporated (GBI) is a fictional company that is used to illustrate the important concepts, processes, and techniques discussed in the textbook. Figure 1-11 will assist you in explaining GBI's organizational structure.

Call up the SAP University Alliance Community (UAC) website http://uac.sap.com, and demonstrate the functionality and services available for students. Also instruct students to read the GBI Backround Document on the UAC to understand GBI’s history, products and operations.

4. How To Use This Book a. Chapter Structure b. SAP Software and Certification c. WileyPLUS

Explain the four key sections in most of the process chapters. Provide a brief background on the origins of SAP and the problems it initially solved.

Explain that most SAP consultants are not programmers and have mastered the material presented in this book.

Explain the three levels of SAP Certification and the value added of becoming a SAP-certified consultant.

Point out that the importance of the WileyPLUS online supplements and the value added to passing the SAP Certification exam. Reinforce the point that using this textbook and the ancillary materials can substitute for taking a formal TERP 10 course.

Review questions 1.

Question: Describe the functional organizational structure. Why do you think this structure is so common? .

Answer: The functional organization structure is divided into functions, or departments, each of which is responsible for a set of closely related activities. This type of organizational structure is widely used because it spreads the responsibility across an organization instead of locating it in one particular person or group. In addition, it enables people to specialize in terms of skills and knowledge.

2. Question: What is the silo effect? Why does it exist? How can an organization reduce or eliminate the silo effect? .

Answer: The silo effect refers to an organizational structure in which workers complete their tasks in their functional “silos” without regard to the consequences for the other functions in the process. This situation exists because each department within a functional organization works independently and focuses on its objectives. This tendency can be reduced by thinking sideways or viewing the business across functional boundaries and focusing on the end-to-end nature of the process and its intended outcomes.

3. Question: What is a business processes? Why is a process view of organizations essential to becoming a successful manager? .

Answer: A business process is a set of tasks or activities that produce desired outcomes. Every process is triggered by some event, such as receiving a customer order or recognizing the need to purchase something. A process view can liberate managers from the silo effect. Managers must

have a solid understanding of the processes that their company uses so that they can meet their company's and customer's satisfaction.

4. Question: Briefly describe the key business processes included in this chapter in terms of their key steps. .

Answer: The key business processes discussed in this chapter are the procurement process (buy), the production process (make), and the fulfillment process (sell). The procurement process refers to all of the activities involved in buying or acquiring the materials used by the organization, such as the raw materials needed to make products. The production process involves the actual creation of the products within the organization. The fulfillment process consists of all the steps involved in selling and delivering the products to the organization’s customers.

5. Question: Explain the interrelationships among the key processes discussed in this chapter. Why are these interrelationships important? .

Answer: This chapter discusses many interrelationships among the various processes found within an organization. These various processes must be coordinated in order to be performed successfully. For example, the asset management and customer service processes are closely integrated with production and sales processes. This interrelationship is important to producing quality products, maintenance of production equipment, repairs of products sold to customers, and providing customer satisfaction.

Exercises Exercises for this chapter are available on the Wiley student companion website at http://www.wiley.com/college/magal/.

Test Questions Three types of test questions are provided – True/False, Multiple-choice (one right answer), and multiple answer (at least two right answers). These are provided in MS word format as well as in a format that can be imported as a test in blackboard.

The files are: Chapter01 Test Questions True False.docx Chapter01 Test Questions Multiple-choice.docx Chapter01 Test Questions Multiple-answer.docx

Blackboard versions of these files are also provided. These versions end with the word Blackboard.

Remember that these are zipped files that should be uploaded to Blackboard as they are, without unzipping. Your Blackboard administrator can help you with any problems you encounter in uploading these files to your course on Blackboard.

If you include all three types of questions, the following grading suggestion is offered.

T/F questions 1 point each Multiple-choice questions 2 points each Multiple-Answer questions 3 (or 4) points each.

All of the correct answers must be chosen in order to receive credit for Multiple-Answer questions. We suggest you do not offer partial credit.

Chapter 1 Introduction to Business Processes Multiple Answer Questions 1. Within the financial structure, typical functions or departments found in a modern organization include which of the following? a. b. c. d. e.

purchasing operations internships finance marketing

Answer: a, b, d, e Difficulty: Medium Section: The Functional Organizational Structure

Page Reference: 1 Practice: Yes

2. Which of the following are steps within a generic business process of an organization? a. b. c. d. e.

Payment Trigger Shipment Outcome Confirmation

Answer: b, d Section: Business Processes

Difficulty: Difficult

Page Reference: 4 Practice:

3. Which processes have an impact on an organization’s finances? a. b. c. d. e.

Financial accounting processes Project management processes Management accounting or controlling processes Material planning process Procurement process

Answer: a, c Section: Business Processes

Difficulty: Medium

Page Reference: 6 Practice: Yes

4. Which processes focus primarily on people and projects? a. b. c. d. e.

Financial accounting processes Procurement process Production process Human capital management processes Project management processes

Answer: d, e Section: Business Processes

Difficulty: Medium

Page Reference: 6 Practice:

5. Which of the following are components of the procurement process? a. b. c. d. e.

Warehouse Purchasing Sales Operations Accounting

Answer: a, b, e Difficulty: Medium Section: Business Processes: Production-Make

Page Reference: 7 Practice: Yes

6. Which of the following are components of the production (make) process? a. b. c. d. e.

Sales Operations Warehouse Accounting Production

Answer: c, e Difficulty: Medium Section: Business Processes: Production-Make

Page Reference: 7 Practice:

7. Which of the following are components of the fulfillment (sell) process? a. b. c. d. e.

Sales Operations Warehouse Accounting Production

Answer: a, c, d Difficulty: Medium Section: Business Processes: Fulfillment-Sell

Page Reference: 8 Practice:

8. The term materials encompasses which of the following? a. b. c. d. e.

Products Components Parts Anything used in an organization Accounting

Answer: a, b, c, d Difficulty: Medium Section: Business Processes: Fulfillment-Sell

Page Reference: 8 Practice:

9. Which of the following activities are related to the production process? a. b. c. d. e.

Request materials Store materials Locate Materials Issue Materials Receive Payment

Answer: a, b, c, d Difficulty: Medium Page Reference: 9 Section: Business Processes: Inventory and Warehouse Management-Store Practice: 10. Which of the following activities are related to the procurement process? a. b. c. d. e.

Issue Materials Receive Materials Prepare for Storage Store Materials Locate Materials

Answer: b, c, d Difficulty: Medium Page Reference: 9 Section: Business Processes: Inventory and Warehouse Management-Store Practice: 11. Which of the following activities are related to the fulfillment process? a. b. c. d. e.

Locate Materials Prepare Shipment Prepare for Storage Store Materials Ship to Customer

Answer: a, b, e Difficulty: Medium Page Reference: 9 Section: Business Processes: Inventory and Warehouse Management-Store Practice: Yes

12. Which of the following are components of the lifecycle data management process? a. b. c. d. e.

Engineering Marketing Accounting Production Sales

Answer: a, b, d Difficulty: Medium Section: Business Processes: Lifecycle Data Management-Design

Page Reference: 10 Practice:

13. Which departments take part in the conception of an idea? a. b. c. d. e.

Accounting Production Engineering Sales Marketing

Answer: c, e Difficulty: Medium Section: Business Processes: Lifecycle Data Management-Design

Page Reference: 10 Practice:

14. In which elements of the lifecycle data management process does marketing play a role? a. b. c. d. e.

Design Conceive product ideas Make Marketing & service Discontinue product

Answer: c, d, e Difficulty: Easy Section: Business Processes: Lifecycle Data Management-Design

Page Reference: 10 Practice:

15. In which components of the asset management process is production involved? a. b. c. d. e.

Settlement Perform maintenance Authorize maintenance Request maintenance Perform service

Answer: b, c, d Difficulty: Medium Page Reference: 11 Section: Business Processes: Asset Management and Customer Service-Service Practice:

16. Sales is involved in which steps in the customer service process? a. b. c. d. e.

Perform service Create service request Settlement Authorize service Request maintenance

Answer: b, d Difficulty: Medium Page Reference: 11 Section: Business Processes: Human Capital Management-People Practice: 17. What part of the project management process is within the various functional areas? a. b. c. d.

Budgeting Execution Settlement Planning

Answer: a, b, c, d Difficulty: Medium Section: Business Processes: Project Management-Projects

Page Reference: 12 Practice: Yes

18. Which of the following products fall(s) within GBI’s line of business? a. b. c. d.

Deluxe and professional touring bikes Men and women’s off-road bikes Motor bikes Bike accessories

Answer: a, b, d Difficulty: Medium Page Reference: 14 Section: Global Bicycle Incorporated (GBI) Practice: Yes 19. What is true about SAP R/3? a. b. c. d.

Supports a single function or department Executes every process from start to finish Consolidates process data in a single database Enables users to view the status of a process in real time

Answer: b, c, d Difficulty: Medium Section: How to use this book: SAP Software and Certification

Page Reference: 15 Practice: Yes

Chapter 1 Introduction to Business Processes Multiple Choice Questions 1. Which term refers to business processes that are not executed by a single group or function? a. b. c. d. e.

Silo Effect Cross-Functional Functional Structure Enterprise Systems Organizational Structure

Answer: b Difficulty: Easy Section: The Functional Organizational Structure

Page Reference: 1 Practice:

2. Which term refers to a system in which workers complete their tasks in separate departments without regard to the consequences for the other components of the process? a. b. c. d. e.

ERP Effect Cross-Functional Functional Structure Enterprise Systems Silo Effect

Answer: e Difficulty: Easy Section: The Functional Organizational Structure: The Silo Effect

Page Reference: 2 Practice:

3. Which system supports business processes end to end? a. b. c. d. e.

Management System Accounting System Enterprise System Functional Structure Document System

Answer: c Difficulty: Medium Section: The Functional Organizational Structure: The Silo Effect

Page Reference: 2 Practice: Yes

4. Which of the following statements about business processes is true? a. b. c. d. e.

They are executed across multiple functions.

They are initiated by some type of trigger.

They involve multiple steps.

All of the above None of the above

Answer: d Difficulty: Medium Section: Business Processes

Page Reference: 4

5. Which term represents a set of tasks or activities that produce desired outcomes? a. b. c. d. e.

Business Process Trigger Outcome Enterprise Resource Planning None of the above

Answer: a Section: Business Processes

Difficulty: Easy Practice:

Page Reference: 4

6. Which term refers to all of the activities involved in buying or acquiring the materials used by the organization, such as raw materials needed to make products? a. b. c. d. e.

Material Planning Procurement Process Production Process Fulfillment Process Lifecycle Data Management

Answer: b Section: Business Processes

Difficulty: Medium Practice: Yes

Page Reference: 5

7. Which process involves the actual creation of the products? a. b. c. d. e.

Material Planning Procurement Process Production Process Fulfillment Process Lifecycle Data Management

Answer: c Section: Business Processes

Difficulty: Medium Practice:

Page Reference: 5

8. Which process uses historical data and sales forecasts to plan which materials will be procured and produced? a. b. c. d. e.

Material Planning Procurement Process Production Process Fulfillment Process Lifecycle Data Management

Answer: a Section: Business Processes

Difficulty: Medium Practice: Yes

Page Reference: 5

9. Which process supports the design and development of products from the initial product idea stage through the discontinuation of the product? a. b. c. d. e.

Material Planning Procurement Process Production Process Fulfillment Process Lifecycle Data Management

Answer: e Section: Business Processes

Difficulty: Medium Practice:

Page Reference: 5

10. Which process tracks the financial impact of process steps with the goal of meeting legal reporting requirements? a. b. c. d. e.

Human Capital Management (HCM) Project Management Financial Accounting Management Accounting or Controlling (CO) None of the above

Answer: c Section: Business Processes

Difficulty: Medium Practice:

Page Reference: 6

11. Which process is used to plan and execute large projects such as the construction of a new factory or the production of complex products such as airplanes? a. b. c. d. e.

Human Capital Management (HCM) Project Management Financial Accounting Management Accounting or Controlling (CO) None of the above

Answer: b Section: Business Processes

Difficulty: Medium Practice:

Page Reference: 6

12. Which process focuses on people within an organization and includes functions such as recruiting, hiring, training, and benefits management? a. b. c. d. e.

Human Capital Management (HCM) Project Management Financial Accounting Management Accounting or Controlling (CO) None of the above

Answer: a Section: Business Processes

Difficulty: Difficult Practice:

Page Reference: 6

13. What is the final step of the procurement process? a. b. c. d. e.

Invoice Purchase Requisition Purchase Order Payment None of the above

Answer: d Difficulty: Easy Section: Business Processes: Procurement-Buy

Page Reference: 6 Practice:

14. What steps are involved in the accounting portion of the procurement process? a. b. c. d. e.

Receiving the materials and the invoice Creating the purchase requisition and sending payment Creating and sending the purchase order Creating the purchase requisition and receiving the materials Receiving the invoice and sending payment

Answer: e Difficulty: Difficult Section: Business Processes: Procurement-Buy

Page Reference: 7 Practice: Yes

15. What is the first step of the production process? a. b. c. d. e.

Authorize Production Request Production Create Product Receive Finished Goods Issue Raw Materials

Answer: b Difficulty: Easy Section: Business Processes: Procurement-Make

Page Reference: 7 Practice: Yes

16. What function does the warehouse perform in the fulfillment process? a. b. c. d. e.

Prepares and sends the shipment to the customer Communicates data related to the order to other parts of the organization Tracks the order Notifies the customer None of the above

Answer: a Difficulty: Easy Section: Business Processes: Procurement-Make

17.

Page Reference: 8 Practice: Yes

___________ is concerned with matching the demand for materials in the organization with the supply. a. b. c. d. e.

Business Planning The Silo Effect Project Management Material Planning None of the above

Answer: d Difficulty: Medium Section: Business Processes: Material Planning-Plan

Page Reference: 8 Practice:

18. Which of the following is concerned with the storage and movement of materials? a. b. c. d. e.

Business Planning Silo Effect Project Management Material Planning Inventory and warehouse management (IWM)

Answer: e Difficulty: Medium Page Reference: 9 Section: Business Processes: Inventory and Warehouse Management-Store Practice:

19. _____________enables an organization to optimize its product development process, from design to market, while ensuring that it complies with industry, quality, and regulatory standards? a. b. c. d. e.

Business Planning Lifecycle Data Management Project Management Material Planning None of the above

Answer: b Difficulty: Medium Section: Business Processes: Lifecycle Data Management-Design

Page Reference: 10 Practice:

20. _____________ provides tools to manage and store documents securely and to keep track of the multiple versions of these documents? a. b. c. d. e.

Document Management Enterprise Management Project Management Material Planning None of the above

Answer: a Difficulty: Medium Section: Business Processes: Lifecycle Data Management-Design

Page Reference: 10 Practice:

21. How does GBI Global sell its merchandise? a. b. c. d. e.

Directly to customers Via a network of specialized dealers Via the Internet All of the above None of the above

Answer: b Difficulty: Medium Section: Global Bicycle Incorporated (GBI)

Page Reference: 13 Practice: Yes

22. Which of the following statements about SAP R/3 is true? a. b. c. d.

It supports a single function or department It is an end-to-end enterprise system Sharing data between departments is problematic None of the above

Answer: b Difficulty: Medium Section: How to use this book: SAP Software and Certification

Page Reference: 15 Practice: Yes

Chapter 2 Introduction to SAP ERP Multiple Answer Questions 1. A three-tier architecture includes which of the following components? a. b. c. d. e.

Operating system layer Data layer Presentation layer Application layer Network layer

Answer: b, c, d Difficulty: Medium Section: Enterprise Systems – Architecture of Enterprise Systems

Page Reference: 1 Practice: Yes

2. Which of the following statements concerning Web services are true? a. b. c. d. e.

Web services expose functionality to other applications.

One Web service can be used to execute multiple steps in a process.

Web services have standard interfaces for input and output.

Web services are an essential component of enterprise systems.

Web services can be used to create composite applications.

Answer: a, d, e Difficulty: Difficult Section: Enterprise Systems – Client-Server Architecture

Page Reference: 2 Practice:

3. Which of the following SAP systems are used to support inter-company processes? (2 correct answers) a. b. c. d. e.

SAP ERP SAP SCM SAP CRM SAP BI SAP Netweaver

Answer: b, c Section: Enterprise Systems

Difficulty: Medium

Page Reference: 4 Practice:

4. Which of the following SAP systems are used to support inter-company processes? a. b. c. d. e.

SAP SCM SAP CRM Production planning (PP) module Materials management (MM) module Strategic enterprise management (SEM) module

Answer: a, b Section: Enterprise Systems

Difficulty: Medium

Page Reference: 4 Practice: Yes

5. Which of the following statements regarding organizational data are true? a. b. c. d. e.

Organizational data represent entities such as customers and vendors.

Organizational data define the structure of an enterprise.

Organizational data are a consequence of the execution of process steps.

Organizational data are constantly changing.

Organizational data change infrequently.

Answer: a, b Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 6 Practice:

6. Which of the following statements regarding master data are true? a. b. c. d. e.

Master data represent entities such as customers and vendors.

Master data define the structure of an enterprise.

Master data are a consequence of the execution of process steps.

Master data are constantly changing.

Master data change infrequently.

Answer: a, c Difficulty: Medium Section: Data in an Enterprise Systems – Master Data

Page Reference: 8 Practice:

7. Which of the following statements concerning transaction data are true? a. b. c. d. e.

Transaction data represent entities such as customers and vendors.

Transaction data define the structure of an enterprise.

Transaction data are a consequence of the execution of process steps.

Transaction data are constantly changing.

Transaction data change infrequently.

Answer: c, d Difficulty: Medium Section: Enterprise Systems – Transaction Data

Page Reference: 12 Practice: Yes

8. Which of the following are examples of organizational data in SAP? a. b. c. d. e.

Client Customer Purchasing Organization Vendor Plant

Answer: a, b, d Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 6 Practice:

9. Which of the following are examples of master data in SAP? a. b. c. d. e.

Client Customer Purchasing Organization Vendor Plant

Answer: b, d Difficulty: Medium Section: Data in an Enterprise System – Master Data

Page Reference: 8 Practice:

10. A plant can be used to represent which of the following? a. b. c. d. e.

A factory A storage facility (warehouse, DC) An office A legal entity A company vehicle

Answer: a, b, c Difficulty: Easy Section: Data in an Enterprise System – Organizational Data

Page Reference: 8 Practice:

11. Material master data are grouped based on: a. b. c. d. e.

Process Material type Company Code Organizational Element Key segments

Answer: b, c, d Difficulty: Medium Section: Data in an Enterprise System – Master Data

Page Reference: 9 Practice:

12. Which of the following statements regarding instance level reporting are true? a. It provides the status of one occurrence of a process (e.g., one customer order). b. It provides information on the performance of a process across many occurrences (e.g., customer orders over time). c. It is based on data in the transactional system. d. It is based on data in the informational system. e. It uses aggregated data.

Answer: a, c Section: Reporting

Difficulty: Medium

Page Reference: 15 Practice:

13. Which of the following statements regarding process level reporting are true? a. It provides the status of one occurrence of a process (e.g., one customer order). b. It provides information on the performance of a process across many occurrences (e.g., customer orders over time). c. It is based on data in the transactional system. d. It is based on data in the informational system. e. It uses aggregated data.

Answer: b, c, e Section: Reporting

Difficulty: Difficult

Page Reference: 15 Practice:

14. Which of the following are examples of online lists? a. b. c. d. e.

Picking list Billing due list List of customers Delivery due list List of documents

Answer: c, e Difficulty: Medium Section: Reporting - Online Lists

Page Reference: 17 Practice:

15. Which of the following are examples of work lists? a. b. c. d. e.

Picking list Billing due list List of customers Delivery due list List of documents

Answer: a, b, d Difficulty: Medium Section: Reporting - Work Lists

Page Reference: 16 Practice:

16. Supply chain management deals with a. b. c. d.

Managing relationships with suppliers Planning for production demand requirements Optimizing transportation and logistics for materials Providing data to help manage sales

Answer: b, c Difficulty: Medium Page Reference: 4 Section: Enterprise Systems – Enterprise Resource Planning System Practice: Yes

17. Which of the following statements concerning SAP NetWeaver are true? a. b. c. d.

It deals exclusively with processes that are executed within a company.

It helps companies integrate with other non-SAP applications.

It serves as the application platform on which the SAP Business Suite runs.

It enables companies to plug in independent software vendor (ISV) applications on top of their core ERP and suite applications.

Answer: b, c, d Difficulty: Medium Section: Enterprise Systems – Application Platform

Page Reference: 5 Practice:

18. Plant is an organizational element where a. b. c. d.

Financial accounting takes place Products and services are created Production planning is carried out Services and maintenance is performed

Answer: b, c, d Difficulty: Medium Section: Data in an Enterprise Systems – Organizational data

Page Reference: 7 Practice:

19. Transaction data make use of which types of data? a. b. c. d.

Master Organizational Situational None of the above

Answer: a, b, c Difficulty: Medium Section: Data in an Enterprise Systems – Transaction data

Page Reference: 12 Practice:

20. Information structures enable which types of analysis? a. b. c. d.

Standard analysis Flexible analysis Rigid analysis All of the above

Answer: a, b Difficulty: Medium Section: Reporting – Information Systems

Page Reference:19 Practice:

Chapter 1 Introduction to Business Processes True-False Questions 1. The most common organizational structure within modern organizations is the functional structure.

Answer: True Difficulty: Easy Section: The Functional Organizational Structure

Page Reference: 1 Practice:

2. Losing sight of the big picture is commonly referred to as the silo effect.

Answer: True Difficulty: Medium Section: The Functional Organizational Structure: The Silo Effect

Page Reference: 2 Practice:

3. Systems that support end-to-end processes are called business processes.

Answer: False Difficulty: Medium Section: Business Processes

Page Reference: 4 Practice:

4. An enterprise system is a set of tasks or activities that produce desired outcomes.

Answer: False Difficulty: Easy Page Reference: 2 Section: The Functional Organizational Structure: Enterprise Systems Practice: 5. Without the various steps of the business process, a company can’t successfully bill customers and ship products.

Answer: True Difficulty: Medium Section: Business Processes

Page Reference: 4 Practice:

6. The lifecycle data management (design) process supports the design and development of products from the initial product idea stage through the discontinuation of the product.

Answer: True Difficulty: Medium Section: Business Processes

Page Reference: 5 Practice:

7. The material planning process is used to maintain internal assets such as machinery and to delivery after-sales customer services such as repairs.

Answer: False Difficulty: Medium Section: Business Processes

Page Reference: 5 Practice:

8. The fulfillment process (sell) consists of all the steps involved in selling and delivering the products to the organization’s customers.

Answer: True Difficulty: Medium Section: Business Processes

Page Reference: 5 Practice:

9. The financial accounting process focuses on internal reporting to manage costs and revenues.

Answer: False Difficulty: Difficult Section: Business Processes

Page Reference: 6 Practice:

10. The procurement process includes all of the tasks involved in acquiring needed materials.

Answer: True Difficulty: Medium Section: Business Processes: Procurement-Buy

Page Reference: 6 Practice:

11. Within the production process, the issuing of raw materials takes place in the warehouse.

Answer: True Difficulty: Difficult Section: Business Processes: Procurement-Make

Page Reference: 7 Practice:

12. Materials encompass all the products, components, and parts that are used in an organization.

Answer: True Difficulty: Medium Section: Business Processes: Material Planning-Plan

Page Reference: 8 Practice:

13. Lead time is the time between placing the order and receiving confirmation that the item has been shipped.

Answer: False Difficulty: Easy Section: Business Processes: Material Planning-Plan

Page Reference: 8 Practice:

14. The purpose of material planning is to match supply with demand.

Answer: True Difficulty: Medium Section: Business Processes: Material Planning-Plan

Page Reference: 8 Practice:

15. Insufficient supply results in a situation called “stock out.”

Answer: True Difficulty: Medium Section: Business Processes: Material Planning-Plan

Page Reference: 8 Practice:

16. Excess supply will result in lower inventory costs because the company is eligible for a bulk rate.

Answer: False Difficulty: Difficult Section: Business Processes: Material Planning-Plan

Page Reference: 8 Practice:

17. Forecasts of finished goods are determined by data from material planning.

Answer: True Difficulty: Medium Section: Business Processes: Material Planning-Plan

Page Reference: 9 Practice:

18. Large warehouses do not need to move items as quickly and efficiently as smaller warehouses.

Answer: False Difficulty: Medium Page Reference: 9 Section: Business Processes: Inventory and Warehouse Management-Store Practice: 19. Asset management is concerned with both the preventive and the corrective maintenance of an organization’s equipment.

Answer: True Difficulty: Medium Page Reference: 10 Section: Business Processes: Asset Management and Customer Service-Service Practice: 20. Document management provides tools to manage and store documents securely and to keep track of the multiple versions of these documents.

Answer: True Difficulty: Easy Section: Business Processes: Lifecycle Data Management-Design

Page Reference: 10 Practice:

21. The final stage of asset management and customer service is the authorization maintenance stage.

Answer: False Difficulty: Medium Page Reference: 11 Section: Business Processes: Asset Management and Customer Service-Service Practice: 22. The final stage of the customer service process is the settlement stage.

Answer: True Difficulty: Easy Page Reference: 11 Section: Business Processes: Asset Management and Customer Service-Service Practice: 23. A project is permanent in nature and is typically associated with smaller, simpler projects.

Answer: False Difficulty: Medium Section: Business Processes: Project Management-Projects

Page Reference: 11 Practice:

24. During the planning phase of a project the scope of the project is defined and the milestones and deadlines are established.

Answer: True Difficulty: Easy Section: Business Processes: Project Management-Projects

Page Reference: 12 Practice:

25. Projects rely on resources located in and work performed in other processes.

Answer: True Difficulty: Medium Section: Business Processes: Project Management-Projects

Page Reference: 12 Practice:

26. Common reports of financial accounting include income statement, profit and loss, and balance sheet.

Answer: True Difficulty: Medium Page Reference: 12 Section: Business Processes: Financial Accounting-Track for External Reporting Practice: 27. Accounts payable is used to track money owed by customers.

Answer: False Difficulty: Easy Page Reference: 13 Section: Business Processes: Financial Accounting-Track for External Reporting Practice: 28. Asset accounting is concerned with tracking financial data related to assets such as machinery and cars.

Answer: True Difficulty: Medium Page Reference: 13 Section: Business Processes: Financial Accounting-Track for External Reporting Practice: 29. Accounts receivable is used to track money that is owed to vendors.

Answer: False Difficulty: Easy Page Reference: 13 Section: Business Processes: Financial Accounting-Track for External Reporting Practice: 30. Management accounting helps an organization track costs and revenues to assess its profitability Answer: True Difficulty: Medium Page Reference: 13 Section: Business Processes: Management Accounting-Track for Internal Reporting Practice:

Chapter 2 Introduction to SAP ERP Multiple Choice Questions 1. Which term relates to the technical capabilities that allow systems to connect with one another through standardized interfaces called Web services? a. b. c. d. e.

Enterprise Resource Planning Supply Chain Management Architecture Service-Oriented Architecture None of the above

Answer: d Section: Enterprise Systems

Difficulty: Medium

Page Reference: 2 Practice: Yes

2. Which term refers to the technical structure of the software, how users interact with the software, and how the software is physically managed on computer hardware? a. b. c. d. e.

Architecture Supply Chain Management Enterprise Resource Planning Service Oriented Architecture None of the above

Answer: a Section: Enterprise Systems

Difficulty: Medium

Page Reference: 1 Practice:

3. Which of the following is used to integrate several client-server applications and create enterprise mash-ups, or composite applications? a. b. c. d. e.

Management System Accounting System Enterprise System All of the above Web Services

Answer: e Section: Enterprise Systems

Difficulty: Medium

Page Reference: 2 Practice: Yes

4. Which system connects a company’s ERP system to those of its customers? a. b. c. d. e.

Application Platform Customer Relationship Management (CRM) Enterprise Solution Product Lifecycle Management (PLM) None of the above

Answer: b Section: Enterprise Systems

Difficulty: Medium

Page Reference: 4 Practice:

5. Which of the following systems helps companies administer the processes of research, design, and product management? a. b. c. d. e.

Application Platform Customer Relationship Management (CRM) Enterprise Solution Product Lifecycle Management (PLM) None of the above

Answer: d Section: Enterprise Systems

Difficulty: Medium

Page Reference: 4 Practice:

6. Which program is the “operating system” for an entire company’s business processes? a. b. c. d. e.

Microsoft Vista Linux SAP NetWeaver SAP Prolific None of the above

Answer: c Difficulty: Medium Section: Application Platforms

Page Reference: 5 Practice:

7. The highest organizational level in SAP ERP is the a. b. c. d. e.

Vendor Client Material Master Plant None of the above

Answer: b Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 7 Practice:

8. Which of the following is(are) used to represent the structure of an enterprise? a. b. c. d. e.

Organizational Data Project Management Client Plant Lifecycle Data Management

Answer: a Difficulty: Easy Section: Data in an Enterprise System – Organizational Data

Page Reference: 6 Practice:

9. Which of the following terms refers to an organizational element that performs multiple functions and is relevant to several processes? a. b. c. d. e.

Warehouse Procurement Plant Fulfillment Lifecycle Data Management

Answer: c Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 7 Practice: Yes

10. How many company codes can a plant belong to? a. b. c. d.

One Two Three Any Number

Answer: a Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 8 Practice:

11. Which of the following master data is used in numerous processes? a. b. c. d. e.

Material Master Plant Company Code Customer Master Vendor Master

Answer: a Difficulty: Medium Section: Data in an Enterprise System – Master Data

Page Reference: 8 Practice:

12. Materials that are created by the production process from other materials are referred to as _____________ a. b. c. d. e.

Finished Goods (FERT) Semi-finished Goods (HALB) Trading Goods (HAWA) Raw Materials None of the above

Answer: a Difficulty: Medium Section: Data in an Enterprise System – Master Data

13. What type of materials is purchased from a vendor?

Page Reference: 10 Practice:

a. b. c. d. e.

Trading Goods Finished Goods (FERT) Semi-finished Goods (HALB) Material Types None of the above

Answer: a Difficulty: Difficult Section: Data in an Enterprise System – Master Data

Page Reference: 10 Practice:

14. Materials that are purchased from an external source (a vendor) and used in the production process are known as ______________ a. b. c. d. e.

Finished Goods (FERT) Semi-finished Goods (HALB) Trading Goods (HAWA) Raw Materials None of the above

Answer: d Difficulty: Easy Section: Data in an Enterprise System – Master Data

Page Reference: 10 Practice:

15. Which of the following terms refers to materials with similar characteristics? a. b. c. d. e.

Material Master Material Group Transaction Data Material number None of the above

Answer: b Difficulty: Easy Section: Data in an Enterprise System – Master Data

Page Reference: 11 Practice:

16. ____________reflect(s) the consequences of executing process steps. a. b. c. d. e.

Material Groups Organizational Data Transaction Data Project Management None of the above

Answer: c Difficulty: Medium Section: Data in an Enterprise System – Transaction Data

Page Reference: 12 Practice:

17. Financial accounting (FI) documents, management accounting or controlling (CO) documents, and material documents are referred to as

a. b. c. d. e.

Transaction Documents Transaction Data Material Group Virtual Documents None of the above

Answer: d Difficulty: Difficult Section: Data in an Enterprise System – Transaction Data

Page Reference: 13 Practice:

18. Which term is generally used to describe the ways that users can view and analyze data to help them make decisions and complete their tasks? a. b. c. d. e.

Reporting Evaluating Characteristics Period Definition Online Analytic Processing (OLAP)

Answer: a Difficulty: Easy Section: Data in an Enterprise System – Reporting

Page Reference: 14 Practice: Yes

19. Which of the following is(are) used to capture specified transaction data in an aggregated and summarized form that enables users to analyze the data as needed. a. b. c. d. e.

Reporting Evaluating Information Structures Period Definition Online Analytic Processing (OLAP)

Answer: c Difficulty: Medium Section: Data in an Enterprise System – Reporting

Page Reference: 15 Practice: Yes

20. Which of the following identify tasks that are scheduled to be completed in a process? a. b. c. d. e.

Online Lists Parameters Information Structures Work Lists Period definitions

Answer: d Difficulty: Medium Section: Reporting – Work Lists

Page Reference: 16 Practice:

Chapter 2 Introduction to SAP ERP True-False Questions 1. The architecture of an enterprise system refers to the technical structure of the software, how users interact with the software, and how the software is physically managed on computer hardware.

Answer: True Difficulty: Medium Section: Enterprise Systems – Architecture of Enterprise Systems

Page Reference: 1 Practice:

2. The three layers of the “three-tier client-server architecture” are the presentation layer, windows layer, and data layer.

Answer: False Difficulty: Medium Section: Enterprise Systems – Architecture of Enterprise Systems

Page Reference: 1 Practice:

3. When you access the Internet, your browser is the presentation layer.

Answer: True Difficulty: Medium Section: Enterprise Systems – Architecture of Enterprise Systems

Page Reference: 2 Practice:

4. Scalability is the ability of the hardware and software to support a greater number of users easily over time.

Answer: True Difficulty: Easy Section: Enterprise Systems – Architecture of Enterprise Systems

Page Reference: 2 Practice:

5. Service-oriented architecture (SOA) is the fundamental concept behind systems connecting through standardized interfaces called Web services.

Answer: True Difficulty: Difficult Section: Enterprise Systems – Architecture of Enterprise Systems

Page Reference: 2 Practice:

6. Enterprise resource planning (ERP) focuses on the internal operations of an organization.

Answer: True Difficulty: Medium Section: Enterprise Planning Systems

Page Reference: 3 Practice:

7. Inter-company processes take place within a single company.

Answer: False Difficulty: Medium Section: Enterprise Planning Systems

Page Reference: 4 Practice:

8. Customer relationship management (CRM) systems connect a company’s ERP system to its accounting software system.

Answer: False Difficulty: Medium Section: Enterprise Planning Systems

Page Reference: 4 Practice:

9. Supply chain management (SCM) systems help companies execute the processes of research, design, and product management.

Answer: False Difficulty: Medium Section: Enterprise Planning Systems

Page Reference: 4 Practice:

10. Application platforms serve as a type of "enterprise operating system" for a company’s ES landscape by allowing all of the various systems to communicate seamlessly with one another as well as with systems outside the company.

Answer: True Difficulty: Medium Section: Application Platforms

Page Reference: 5 Practice:

11. Current versions of the SAP business suite can’t run on SAP NetWeaver.

Answer: False Difficulty: Easy Section: Application Platforms

Page Reference: 6 Practice:

12. SAP NetWeaver is the “operating system” for an entire company’s business processes.

Answer: True Difficulty: Medium Section: Application Platforms

Page Reference: 6 Practice:

13. Organizational data are used to represent the structure of an enterprise.

Answer: True Difficulty: Easy Section: Data in an Enterprise System – Organizational Data

Page Reference: 6 Practice:

14. A company code is the highest organizational level in SAP ERP. Answer: False Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 7 Practice:

15. A client represents each company within an enterprise.

Answer: False Difficulty: Easy Section: Data in an Enterprise System – Organizational Data

Page Reference: 7 Practice:

16. Material master are organizational elements that performs multiple functions and is relevant to several processes.

Answer: False Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 7 Practice:

17. A building can house only a single plant.

Answer: False Difficulty: Difficult Section: Data in an Enterprise System – Organizational Data

Page Reference: 8 Practice:

18. A plant can be a factory, a warehouse, a regional distribution center, or a service center.

Answer: True Difficulty: Medium Section: Data in an Enterprise System – Organizational Data

Page Reference: 8 Practice:

19. The material master is the most commonly used organizational data in an enterprise.

Answer: False Difficulty: Medium Section: Data in an Enterprise System – Master Data

Page Reference: 8 Practice:

20. The material master includes a large amount of data because it is used in numerous processes.

Answer: True Difficulty: Medium Section: Data in an Enterprise System – Master Data

Page Reference: 8 Practice:

21. Materials are categorized into different material types based on the way they are used in the firm’s operations.

Answer: True Section: Material Types

Difficulty: Medium

Page Reference: 9 Practice:

22. The four most common material types are raw materials, semi‐finished goods, finished goods, and exported goods.

Answer: False Section: Material Types

Difficulty: Difficult

Page Reference: 9 Practice:

23. Raw materials (ROH) are purchased from an external source ‐ a vendor‐ and used in the production process.

Answer: True Section: Material Types

Difficulty: Easy

Page Reference: 10 Practice:

24. Trading goods (HAWA) are resold to customers after they have been modified by the company.

Answer: False Section: Material Types

Difficulty: Medium

Page Reference: 10 Practice:

25. Transaction data reflect the consequences of executing process steps.

Answer: True Difficulty: Medium Section: Enterprise Systems – Transaction Data

Page Reference: 12 Practice:

26. The financial accounting documents, management accounting or controlling documents, and material documents are all “virtual.”

Answer: True

Difficulty: Medium

Page Reference: 13

Section: Enterprise Systems – Transaction Data

Practice:

27. Reporting is a general term for the methods a user can utilize to update data in the ERP system to execute process steps.

Answer: False Section: Reporting

Difficulty: Medium

Page Reference: 14 Practice:

28. The online transaction processing (OLTP) system is designed to capture and store detailed organizational data.

Answer: False Section: Reporting

Difficulty: Medium

Page Reference: 15 Practice:

29. Work lists identify tasks that are scheduled to be completed in a process.

Answer: True Difficulty: Medium Section: Reporting – Work Lists

Page Reference: 16 Practice:

30. Information structures display lists of master data, such as materials, vendors, and purchasing info records, and documents, such as transaction documents, FI, CO, and material documents that are generated during the execution of a process.

Answer: False Difficulty: Medium Section: Reporting – Online Lists

Page Reference: 17 Practice:

Package Title: Test bank Course Title: Introduction to Accounting Question type: Multiple Choice 1. ____________ is concerned with recording the financial impacts of business processes as they are executed. a. b. c. d. e.

Management accounting Financial accounting (Fl) Controlling (CO) Bank ledger accounting None of the above

Answer: b Difficulty: Medium Section Reference: Learning Objectives 2. Which of the following is a key process in financial accounting? a. b. c. d. e.

Sales order processing Accounts receivable accounting Credit management Income verification All of the above

Answer: b Difficulty: Easy Section Reference: Learning Objectives 3. Which process is used to manage money owed by customers for goods and services purchased from the company? a. b. c. d. e.

General ledger accounting Accounts receivable accounting Fixed asset accounting Bank ledger accounting All of the above

Answer: b Difficulty: Medium Section Reference: Learning Objectives 4. Which process is concerned with recording data associated with bank statements? a. b. c. d. e.

Bank ledger accounting Fixed asset accounting General ledger accounting Accounts receivable accounting None of the above

Answer: a

Difficulty: Easy Section Reference: Learning Objectives 5. ____________ are internal divisions of an enterprise that are used to define areas of responsibility or to meet the external reporting requirements of an enterprise segment. a. b. c. d. e.

Cost centers Depreciation areas Business areas Sub-ledgers None of the above

Answer: c Difficulty: Medium Section Reference: Organizational Data 6. Which term refers to an ordered listing of accounts that comprise a company’s general ledger? a. b. c. d. e.

General ledger Balance sheet Bank ledger Chart of accounts (COA) None of the above

Answer: d Difficulty: Medium Section Reference: Master Data 7. Which term represents what a company owns, such as cash, inventory of materials, and buildings? a. b. c. d. e.

Liabilities Equity Assets Revenues None of the above

Answer: c Difficulty: Medium Section Reference: General Ledger Accounting 8. Which term represents what a company owes to others, including money owed to vendors and loans from financial institutions? a. b. c. d. e.

Liabilities Equity Assets Revenues None of the above

Answer: a Difficulty: Medium Section Reference: General Ledger Accounting

9. Which term represents the monies a company earns by selling its products and services? a. b. c. d. e.

Liabilities Assets Expenses Revenue Equity

Answer: d Difficulty: Medium Section Reference: General Ledger Accounting 10. Which term represents the costs associated with creating and selling products and services? a. b. c. d. e.

Assets Expenses Liabilities Equity None of the above

Answer: b Difficulty: Medium Section Reference: General Ledger Accounting 11. Which element is not a part of the typical company code data in general ledger accounts? a. b. c. d. e.

Tax-related data Field status groups Line item display Reconciliation account data None of the above

Answer: e Difficulty: Difficult Section Reference: General Ledger Accounting 12. Which term is a general ledger account that consolidates data from a group of related sub-ledger accounts? a. b. c. d. e.

Subsidiary ledger Sub-ledger Reconciliation account Line item display None of the above

Answer: c Difficulty: Medium Section Reference: Subsidiary ledgers and Reconciliation Account 13. Which of the following records the impact of a transaction step on financial accounting? a. Financial accounting document

b. c. d. e.

Parallel accounting document Sub-ledger Subsidiary ledger None of the above

Answer: a Difficulty: Medium Section Reference: Accounting Documents 14. Which of the following is used to implement multiple ledgers and use each ledger for different purposes?

a. b. c. d. e.

Financial accounting document Subsidiary ledger Sub-ledger Parallel Accounting None of the above

Answer: d Difficulty: Easy Section Reference: Parallel Accounting 15. Which type of asset has a physical form? a. b. c. d. e.

Master asset Tangible asset Informal asset Intangible asset None of the above

Answer: b Difficulty: Easy Section Reference: Asset Accounting 16. Which type of asset has a non-physical form? a. b. c. d. e.

Master asset Tangible asset Informal asset Intangible asset None of the above

Answer: d Difficulty: Easy Section Reference: Asset Accounting 17. Which of the following is used to report data needed to meet legal and regulatory requirements? a. b. c. d. e.

Assets Equity Tangible document Financial statement None of the above

Answer: d Difficulty: Medium Section Reference: 18. Which of the following best describes the operative chart of accounts? a. Contains the operational accounts that are used to record the financial impact of an organization’s day-to-day transactions b. Used to enable companies to meet special country-specific reporting requirements c. Contains accounts that are used by multiple companies to consolidate their financial reporting d. Contains only accounts payable transactions e. Contains only accounts receivable transaction Answer: a Difficulty: Difficult Section Reference: Chart of accounts 19. Which of the following is not a mode of acquiring an asset for a company? a. b. c. d. e.

Acquiring internally via the production process Acquire from a vendor using the purchasing process Acquire from a vendor without using the purchasing process Selling equipment Acquiring without a vendor

Answer: d Difficulty: Easy Section Reference: Asset Accounting 20. All of the following are transaction types that occur during the life of an asset except ___________ . a. b. c. d.

Acquisition Depreciation Allocation Retirement

Answer: c Difficulty: Easy Section Reference: Asset Accounting 21. Financial statements can be generated from which of the following? a. b. c. d.

Operative COA Country-specific COA Both operative and country-specific COAs Neither operative nor country-specific COAs

Answer: c Difficulty: Easy Section Reference: Financial Statements

Question type: Multiple Answers 22. Balance sheet accounts are grouped into which of the following categories? a. b. c. d. e.

Revenue Assets Liabilities Equity Expenses

Answer: b, c, d Difficulty: Medium Section Reference: General Ledger Accounting 23. An organization can possess which of the following types of assets? a. b. c. d. e.

Tangible Intangible Financial Economic Virtual

Answer: a, b, c Difficulty: Medium Section Reference: Asset Accounting 24. Tangible assets can include which of the following? a. b. c. d. e.

Computers Bonds Production Machinery Real Estate Mortgage

Answer: a, c, d Difficulty: Medium Section Reference: Asset Accounting 25. What are the most common transaction types that occur during the life of an asset? a. b. c. d. e.

Production Allocation Acquisition Depreciation Retirement

Answer: c, d, e Difficulty: Medium Section Reference: Asset Accounting

26. What are the primary ways in which an asset can be acquired? a. b. c. d. e.

Internally by production Internally by inventory tracking Externally by vendor Externally without a vendor By asset liquidation

Answer: a, c, d Difficulty: Easy Section Reference: Acquisition 27. Which of the following are common depreciation areas used in the US? a. b. c. d. e.

Book depreciation Cost accounting depreciation Legal depreciation Special depreciation Physical depreciation

Answer: a, b, c. d Difficulty: Medium Section Reference: Depreciation 28. Reporting in financial accounting is broadly divided into which of the following two categories? a. b. c. d. e.

Posting goods issue Displaying account information Generating financial statements Recording transactions Automatic posting of accounts

Answer: b, c Difficulty: Easy Section Reference: Reporting 29. From which of the following can financial statements be generated? a. b. c. d. e.

Operative chart of accounts Country-specific chart of accounts Revenue accounts Assets Liability accounts

Answer: a, b Difficulty: Difficult Section Reference: Financial Statements

30. What is true about a business area? a) It is a internal division of an enterprise b) It helps management monitor performance c) It is used for external reporting

d) It is associated with one company code Answer: a, b, c Difficulty: Easy Section Reference: Organizational Data 31. Which of the following are types of chart of accounts? a) Operative COA b) Country specific COA c) Active COA d) Group COA Answer: a, b, d Difficulty: Medium Section Reference: Chart of Accounts 32. What does the COA data include? a) Client segment b) Storage location segment c) Plant segment d) Company code segment Answer: a, d Difficulty: Medium Section General Ledger Accounts 33. The COA segment of the COA data includes which of the following? a) Account currency b) Account number c) Account group d) Short text Answer: b, c Difficulty: Medium Section General Ledger Accounts 34. Which of the following does the balance sheet include? a) Revenue b) Expenses c) Assets d) Liabilities Answer: c, d Difficulty: Easy Section General Ledger Accounts 35. Which of the following statements concerning reconciliation accounts are true? a) Reconciliation account for customers is accounts payable b) Reconciliation account for customers is accounts receivable

c) Reconciliation account for vendors is accounts payable d) Reconciliation account for vendors is accounts receivable Answer: b, c Difficulty: Easy Section Subsidiary Ledgers and Reconciliation Accounts 36. Which of the following statements regarding reconciliation accounts are not true? a) Data are posted directly into them b) Data are automatically posted into them after they are posted to the corresponding sub-ledger c) The reconciliation account includes the sum of the postings of the sub-ledgers. d) None of the above Answer: a Difficulty: Easy Section Subsidiary Ledgers and Reconciliation Accounts 37. Which attributes are present in the FI document items? a) Amount b) Document type c) Posting date d) Currency e) Posting key Answer: a, e Difficulty: Medium Section Accounting Documents 38. Which attributes are present in the FI document header? a) Amount b) Document type c) Posting date d) Currency e) Posting key Answer: b, c, d Difficulty: Medium Section Accounting Documents 39. Which of the following statements concerning the leading ledger are true? a) It is a type of sub-ledger b) Global accounting principles are consolidated into it c) Having a leading ledger is optional d) All transaction data are posted to it Answer: b, d Difficulty: Medium Section Parallel Accounting

40. A cost center: a) Absorbs costs b) Can be associated with a department c) Is similar to a cost object d) Is associated with locations where costs are incurred Answer: a, b, c, d Difficulty: Easy Section Concepts in Management Accounting 41. When does a debit take place? a) When assets and expenses decrease b) When assets and expenses increase c) When revenue and liabilities decrease d) When revenue and liabilities increase Answer: b, c Difficulty: Easy Section General Ledger Accounting 42. Balance sheet accounts are grouped into: a) Assets b) Liabilities c) Equity d) Revenue Answer: a, b, c Difficulty: Easy Section General Ledger Accounting 43. When does a credit take place? a) When assets and expenses decrease b) When assets and expenses increase c) When revenue and liabilities decrease d) When revenue and liabilities increase Answer: a, d, Difficulty: Easy Section General Ledger Accounting 44. In accounts payable, which general ledger accounts are affected? a) Accounts payable reconciliation b) Vendor c) Supplies expense d) Bank Answer: a, c, d Difficulty: Easy Section Accounts Payable Accounting

45. In accounts receivable, which general ledger accounts are affected? a) Accounts receivable reconciliation b) Sales revenue c) Bank d) Supplies expense Answer: a, b, c Difficulty: Easy Section Accounts Receivable Accounting

Question type: True or False 46. Accounting processes are broadly divided into two main categories: financial accounting and management accounting.

Answer: True Difficulty: Easy Section Reference: Learning Objectives 47. Financial accounting (Fl) is concerned with recording the financial impacts of business processes as they are executed.

Answer: True Difficulty: Medium Section Reference: Learning Objectives 48. Management accounting, or controlling (CO), is intended primarily for audiences outside the organization.

Answer: False Difficulty: Medium Section Reference: Learning Objectives 49. Accounts payable accounting is not associated with the procurement process.

Answer: False Difficulty: Medium Section Reference: Learning Objectives 50. The general ledger is used to record the financial impacts of business process steps.

Answer: True Difficulty: Easy Section Reference: Learning Objectives 51. The balance sheet is a snapshot of the organization at a point in time.

Answer: True

Difficulty: Easy Section Reference: Learning Objectives 52. A segment is a division of an enterprise for which management monitors performance separately from other segments.

Answer: True Difficulty: Medium Section Reference: Organizational Data: 53. Business areas are external departments of an enterprise that are used to define areas of responsibility or to meet the internal requirements of a division.

Answer: False Difficulty: Difficult Section Reference: Organizational Data 54. A list of accounts that can be included in a general ledger is called master data.

Answer: False Difficulty: Difficult Section Reference: Master Data 55. A chart of accounts (COA) is an ordered listing of accounts that comprise a company’s general ledger.

Answer: True Difficulty: Easy Section Reference: Chart of Accounts 56. Liabilities are what the company owns, such as cash, land, and buildings.

Answer: False Difficulty: Easy Section Reference: General Ledger Accounts 57. Assets are monies the company earns by selling its products and services.

Answer:

False

Difficulty: Medium Section Reference: General Ledger Accounts 58. Expenses are what the company owes to others, including money owed to vendors and loans from financial institutions.

Answer: False Difficulty: Difficult Section Reference: General Ledger Accounts

59. Account currency determines the currency in which all the transactions are recorded.

Answer: True Difficulty: Easy Section Reference: General Ledger Accounts 60. A reconciliation account records the impact of a transaction step on financial accounting.

Answer: False Difficulty: Difficult Section Reference: Subsidiary Ledgers and Reconciliation Accounts 61. A financial accounting document is a general ledger account that consolidates data from a group of sub-ledger accounts, such as customers and vendors.

Answer: False Difficulty: Difficult Section Reference: Accounting Documents 62. Parallel accounting consists of implementing multiple ledgers and using each ledger for different purposes.

Answer: True Difficulty: Easy Section Reference: Parallel Accounting 63. An increase in an asset account or an expense account results in a credit posting.

Answer: False Difficulty: Medium Section Reference: General Ledger Accounting 64. An increase in revenue or liability results in a debit posting.

Answer: False Difficulty: Medium Section Reference: General Ledger Accounting 65. Accounts payable accounting is concerned with vendors.

Answer: True Difficulty: Easy Section Reference: Accounts Receivable (AR) Accounting 66. Accounts receivable accounting is concerned with customers.

Answer: True Difficulty: Easy Section Reference: Accounts Receivable (AR) Accounting

67. Within accounts receivable accounting, when a payment is made the bank account is debited and the appropriate customer account is credited.

Answer: True Difficulty: Medium Section Reference: Accounts Receivable (AR) Accounting 68. Intangible assets are physical items such as buildings, machinery, and computers.

Answer: False Difficulty: Medium Section Reference: Asset Accounting 69. Tangible assets are non-physical items such as trademarks and patents.

Answer: False Difficulty: Medium Section Reference: Asset Accounting 70. Financial accounting is affected any time money either leaves or comes into the company.

Answer: True Difficulty: Easy Section Reference: Integration with other processes 71. Reporting within financial accounting is divided into two categories: generating financial statements and displaying account information.

Answer: True Difficulty: Medium Section Reference: Reporting 72. Financial statements can be generated for different organizational levels including one or more company codes and business areas.

Answer: True Difficulty: Medium Section Reference: Financial Statements

Chapter 4 The Procurement Process Multiple Answer Questions 1. Which of the following are organizational elements in purchasing? a. b. c. d. e.

Shipping point Company code Vendors Materials Plant

Answer: b, e Difficulty: Easy Section: Organizational Data Practice:

Page Reference: 2

2. Which of the following statements about storage locations are true? a. b. c. d. e.

A storage location must be assigned to a plant A storage location can be assigned to more than one plant A client can have more than one storage location A plant can have more than one storage location A storage location can hold only materials with a stock status of unrestricted use

Answer: a, c, d Section: Storage Location

Difficulty: Medium Practice: Yes

Page Reference: 2

3. Which of the following are organizational elements in purchasing? a. b. c. d. e.

Sales organization Purchasing area Plant Vendor Storage location

Answer: c, e Section: Storage Location

Difficulty: Easy Practice:

Page Reference: 3

4. Which of the following statements about purchasing organizations are correct? a. b. c. d.

They negotiate conditions of purchase with vendors They can purchase only for one company They can purchase for multiple plants They can purchase for multiple plants, but they must be within the same company code e. They identify a buyer or a group of buyers Answer: a, c Difficulty: Medium Section: Purchasing Organization Practice:

Page Reference: 3

5. A purchase order can be sent to which of the following? a. b. c. d. e.

A vendor A customer A plant A purchasing organization A purchasing group

Answer: a, c Section: Purchasing Group

Difficulty: Easy Practice:

Page Reference: 6

6. Data for source determination are obtained from: a. b. c. d. e.

A purchase order Purchase info records A source list Contracts and agreements The vendor master record

Answer: b, c, d Difficulty: Medium Section: Purchasing Organization Practice:

Page Reference: 6

7. Which of the following are master data that are related to the purchasing process? a. b. c. d. e.

Material master Vendor master Vendor info records Purchasing organization Customer master

Answer: a, b, c Section: Master Data

Difficulty: Medium Practice: Yes

Page Reference: 7

8. Which of the following are methods of valuing materials? a. b. c. d. e.

Actual price Standard price Purchasing price Moving (average) price Selling price

Answer: b, d Section: Material Master

Difficulty: Difficult Practice:

Page Reference: 8

9. Which G/L accounts are impacted by the goods receipt step of the procurement process? a. b. c. d. e.

Accounts payable Goods receipt / invoice receipt account Inventory account Vendor account Band account

Answer: b, c Section: Goods Receipt

Difficulty: Difficult Practice:

Page Reference: 32

10. Which G/L accounts are impacted by the invoice verification step of the procurement process? a. b. c. d. e.

Accounts payable Goods receipt / invoice receipt account Inventory account Vendor account Bank account

Answer: a, b, d Difficulty: Difficult Section: Invoice Verification Practice:

Page Reference: 36

11. Which of the following data categories are included in a purchasing info record? a. b. c. d. e.

Freight Discounts Material number Vendor address Texts

Answer: a, b, e Difficulty: Easy Section: Purchasing Info Records Practice:

Page Reference: 12

12. Data from which of the following sources are automatically included in a purchase order? a. b. c. d. e.

Vendor info record Purchasing info record Material master Vendor master Purchasing organization

Answer: b, c, d Difficulty: Medium Section: Purchasing Info Records Practice:

Page Reference: 12

13. Which of the following are material types? a. b. c. d. e.

Consumable material Raw material Packaging Consignment material Non-valuated material

Answer: a, b, c, e Difficulty: Medium Section: Account Determination Practice:

Page Reference: 14

14. Which of the following are account assignment categories? a. b. c. d. e.

Asset Order Cost center Sales order Project

Answer: a, b, c, d, e Difficulty: Easy Section: Account Determination Practice: Yes

Page Reference: 15

15. Materials designated as __________ can be withdrawn only for sampling or for scrap. a. b. c. d. e.

Goods movement In-quality inspection Blocked stock Material document Purchase info record

Answer: b, c Difficulty: Medium Section: Stock Type or Status Practice:

Page Reference: 17

16. Material documents consist of a header and an items section. Which of the following are included in the items section? a. b. c. d. e.

Document number Movement type Material number Storage location Document date

Answer: b, c, d Section: Goods Movement

Difficulty: Medium Practice: Yes

Page Reference: 18

17. A purchase order can be created with reference to which of the following? a. b. c. d. e.

Purchase order Purchase requisition Purchase info record RFQ Sales order

Answer: a, b, d Section: Order Processing

Difficulty: Medium Practice: Yes

Page Reference: 25

18. Which of the following are consequences of the goods receipt step in the procurement process? a. b. c. d. e.

A material document is created An accounting document is created The purchase order history is updated The document flow is updated The material master is updated

Answer: a, b, c, e Section: Goods Receipts

Difficulty: Difficult Practice: Yes

Page Reference: 30

19. Which of the following are key documents in purchasing? a. b. c. d. e.

Material documents Fl documents CO documents Purchase order Invoice

Answer: a, b, c, d, e Section: Process

Difficulty: Easy Practice:

Page Reference: 21

20. Which of the following organizational data are required when creating a purchase requisition? a. b. c. d. e.

Sales organization Company code Storage location Purchasing organization Purchasing group

Answer: b, d, e Difficulty: Easy Section: Requirement Determination Practice:

Page Reference: 22

21. Which steps are involved in converting a purchase requisition into a purchase order? a. b. c. d. e.

Source list Outline purchase agreement Storage location Request for quotation Quotation

Answer: d, e Difficulty: Medium Section: Source of Supply Determination Practice:

Page Reference: 24

22. Which of the following organizational data are required when creating a purchase order? a. b. c. d. e.

User input Purchase Requisition RFQ Quotation Purchase order

Answer: b, c, d, e Section: Order Processing

Difficulty: Medium Practice:

Page Reference: 25

23. Which transaction documents are included in a purchase order? a. b. c. d. e.

Requisition RFQ Quotation Conditions Vendor

Answer: a, b, c Section: Order Processing

Difficulty: Medium Practice:

Page Reference: 26

24. SAP can utilize which of the following forms of media to communicate with a vendor? a. b. c. d. e.

Print E-mail EDI Web services Fax

Answer: a, b, c, d, e Section: Oder Processing

Difficulty: Medium Practice:

Page Reference: 28

25. What are the key stock types (statuses) utilized in purchasing, based on usability of materials? a. b. c. d. e.

Unrestricted use Stock in transit Stock on order Stock in storage Blocked stock

Answer: a, b, e Section: Goods Receipt

Difficulty: Medium Practice:

Page Reference: 31

26. Which of the following documents are required for the invoice verification step of the procurement process? a. b. c. d. e.

Vendor invoice Purchase requisition Purchase order Material document Material master

Answer: a, c, d Difficulty: Medium Section: Invoice Verification Practice:

Page Reference: 34

27. Which of the following are consequences of the invoice verification step of the procurement process? a. b. c. d. e.

A material document is created An accounting document is created The purchase order history is updated G/L accounts are updated The sales order is updated

Answer: b, d, c Difficulty: Difficult Section: Invoice Verification Practice: Yes

Page Reference: 34

28. Which of the following data are needed for invoice verification? a. b. c. d. e.

Company code Purchase order Material document Invoice User input

Answer: b, c, d, e Difficulty: Medium Section: Invoice Verification Practice:

Page Reference: 35

29. Which of the following tasks are performed during the payment step? a. b. c. d. e.

Selecting method of payment Updating master data Selecting invoice items Verifying an invoice Calculating the payment amount

Answer: a, c, e Difficulty: Medium Section: Payment Processing Practice:

Page Reference: 37

30. To complete a vendor payment, which of the following types of data must be included on the vendor master? a. b. c. d. e.

Payment terms Payment method Date Payment address Amount

Answer: a, b, d Difficulty: Medium Section: Payment Processing Practice:

Page Reference: 37

31. Which organizational processes interact with procurement? a. b. c. d. e.

Project management Material planning Fulfillment (sales) Management accounting Financial accounting

Answer: a, b, c, d, e Difficulty: Medium Section: Integration with Other Processes Practice:

Page Reference: 40

32. Standard reporting tools in the transaction system are used to generate which of the following? a. b. c. d.

Picking lists Online lists Work lists Inventory lists

Answer: b, c Section: Reporting

Difficulty: Medium Practice: Yes

Page Reference: 40

Chapter 4 The Procurement Process Multiple Choice Questions 1. Which one of the following is not a type of organizational data that is utilized in the procurement process? a. b. c. d. e.

Client Company Code Storage Location Purchasing Organization Manufacturing Plant

Answer: e Difficulty: Easy Section: Organizational Data Practice:

Page Reference: 2

2. What is a storage location? a. b. c. d. e.

The place where raw materials are received The place within a plant where materials are kept until they are needed The place where materials are collected for staging and inspection The place within a plant where machines are installed for production purposes The place within a plant where finished goods are kept for sale

Answer: b Section: Storage Location

Difficulty: Medium Practice:

Page Reference: 2

3. Which organizational element(s) control(s) the entry of accounting data in the vendor master? a. b. c. d. e.

Purchasing organization Client Company Code Client and Company Code Client and Purchasing Organization

Answer: d Difficulty: Easy Section: Organizational Data Practice: Yes

Page Reference: 3

4. A purchasing organization is involved in all of the following operations except a. b. c. d.

Negotiating contracts and agreements Negotiating pricing with vendors Evaluating and identifying vendors Determining storage locations within the plant

Answer: d Difficulty: Medium Section: Purchasing Organization Practice:

Page Reference: 4

5. Which one of the following is not a model of the purchasing organization? a. Enterprise level b. Company level c. Client level d. Plant level e. Cross-plant Answer: c Difficulty: Medium Section: Purchasing Organization Practice:

Page Reference: 4-6

6. Within the plant-level purchasing organization, also known as a plant-specific purchasing Organization, a. b. c. d. e.

Each plant has its own purchasing organization One purchasing organization is responsible for multiple plants Only one purchasing organization for all plants One purchasing organization is responsible for all company codes in the enterprise Two or more purchasing organizations are responsible for each plant

Answer: a Difficulty: Difficult Section: Plant-Level Purchasing Organization Practice:

Page Reference: 5

7. A purchasing group is an individual or a group of individuals who are responsible for all of the following except a. b. c. d. e.

Creating purchase requisitions Negotiating contracts and agreements Requesting quotations from vendors Creating and monitoring purchase orders Planning for material requirements

Answer: b Section: Purchasing Group

Difficulty: Medium Practice:

Page Reference: 6

8. Which one of the following is not one of the data types that are relevant to the purchasing process? a. b. c. d. e.

Material master Vendor master Sales master Purchasing info records Conditions

Answer: c Section: Master Data

Difficulty: Medium Practice:

Page Reference: 7

9. The key data in the purchasing view of the material master are a. The purchasing organization, the goods receipt processing time, and the delivery tolerances b. The purchasing group, the goods receipt processing time, and the delivery tolerances c. The purchasing group, the invoice, and the delivery tolerances d. The purchasing group, the material master, and the delivery tolerances e. The price, the storage location, and the delivery date Answer: b Section: Material Master

Difficulty: Easy Practice:

Page Reference: 9

10. Data in the vendor master are grouped into which three segments? a. b. c. d. e.

General data, storage data, and purchasing data General data, storage data, and inventory data Storage data, accounting data, and purchasing data Storage data, accounting data, and pricing data General data, accounting data, and purchasing data

Answer: e Section: Vendor Master

Difficulty: Medium Practice:

Page Reference: 9

11. General data in a vendor master contain all of the following except: a. b. c. d. e.

Name Address Communication Payment terms and methods Search term

Answer: d Section: Vendor Master

Difficulty: Easy Practice: Yes

Page Reference: 10

12. Which of the following is an intersection or combination of material data and vendor data? a. b. c. d. e.

Condition type Purchasing info record Stock transfer Third-party order Search term

Answer: b Difficulty: Medium Section: Purchasing Info Records Practice:

Page Reference: 12

13. Which item category would you use to have your vendor ship goods directly to your customer? a. b. c. d. e.

Consignment Third-party Stock transfer Standard Transfer posting

Answer: b Section: Item Categories

Difficulty: Medium Practice: Yes

Page Reference: 13

14. Materials that are acquired to be used within the organization are referred to as a. b. c. d. e.

Stock materials Transfer materials Vendor materials Consumable materials None of the above

Answer: d Difficulty: Medium Section: Account Determination Practice:

Page Reference: 14

15. Which of the following account assignment categories is used when the company acquires a fixed asset? a. b. c. d. e.

Cost center Asset Order Sales order Project

Answer: b Difficulty: Easy Section: Account Determination Practice:

Page Reference: 15

16. Which of the following document types is not utilized during the Purchasing process? a. b. c. d. e.

Material documents Fl documents CO documents Picking document Invoice

Answer: d Section: Good Movement

Difficulty: Easy Practice:

Page Reference: 17

17. A FI document includes a header and an items section. Which of the following data are included in the items section? a. b. c. d. e.

Document number Account Storage location Document date Document currency

Answer: b Section: Goods Receipt

Difficulty: Medium Practice: Yes

Page Reference: 33

18. Which of the following statements about a plant is not true? a. b. c. d. e.

A plant can be assigned to more than one company code A company code can have more than one plant A plant is a key organizational element in purchasing A plant can be assigned to only one company code A plant must have at least one storage area

Answer: a Section: Goods Movement

Difficulty: Difficult Practice:

Page Reference: 18

19. Which of the following goods movements need not involve a physical movement of materials? a. b. c. d. e.

Goods receipt Goods issue Stock transfer Transfer posting None of the above (all involve physical movement of materials)

Answer: d Section: Goods Movement

Difficulty: Medium Practice:

Page Reference: 19

20. Which element of the requirements determination process involves creating the requisition? a. b. c. d. e.

Data Task Trigger Outcomes None of the above

Answer: b Difficulty: Difficult Section: Requirements Determination Practice:

Page Reference: 21

21. A company can use which of the following to select a vendor from a list of potential suppliers ? a. b. c. d. e.

Source list Company code Vendor master Material master None of the above

Answer: a Difficulty: Medium Section: Source of Supply Determination Practice:

Page Reference: 23

22. Which element of a purchase order includes communicating with the vendor? a. b. c. d. e.

Trigger Data Task Outcome None of the above

Answer: d Section: Order Processing

Difficulty: Medium Practice:

Page Reference: 25

23. Which item is included in the header of a purchase order? a. b. c. d. e.

Order quantity Vendor Delivery date Price None of the above

Answer: b Section: Order Processing

Difficulty: Medium Practice: Yes

Page Reference: 26

24. SAP can utilize which of the following media to communicate with a vendor? a. b. c. d. e.

Web services EDI Fax Print All of the above

Answer: e Section: Order Processing

Difficulty: Easy Practice:

Page Reference: 28

25. Which of the following is(are) a form of data within the goods receipt step? a. b. c. d. e.

Material ordered Quantity delivered Verification Storage location All of the above

Answer: e Section: Goods Receipt

Difficulty: Medium Practice:

Page Reference: 31

26. Which of the following is a form of invoice verification? a. b. c. d. e.

Three-way match Quality management Inspection lot Warehouse management None of the above

Answer: a Difficulty: Medium Section: Invoice Verification Practice:

Page Reference: 34

27. Which element of the payment step includes selecting a bank? a. b. c. d. e.

Trigger Data Outcome Task None of the above

Answer: d Difficulty: Medium Section: Payment Processing Practice:

Page Reference: 37

28. Which of the following facilitates the integration between vendor master data and financial accounting? a. b. c. d. e.

Vendor account number Reconciliation account Accounts payable number Material number Accounts receivable number

Answer: b Difficulty: Medium Section: Payment Processing Practice: Yes

Page Reference: 38

29. Purchasing information systems are a component of which system? a. b. c. d.

Logistics information systems Business intelligence systems Financial information systems Human resource information systems

Answer: a Difficulty: Medium Section: Purchasing Information Systems Processing

Page Reference: 41 Practice: Yes

Chapter 4 The Procurement Process True-False Questions 1. Storage locations are places within a plant were materials are kept until they are needed.

Answer: True Section: Storage Location

Difficulty: Easy Practice:

Page Reference: 2

2. There can only be one storage location within a plant.

Answer: False Section: Storage Location

Difficulty: Easy Practice:

Page Reference: 2

3. A storage location is a key organizational element in purchasing.

Answer: True Section: Storage Location

Difficulty: Medium Practice:

Page Reference: 2

4. A purchasing organization is involved only in negotiating prices with vendors Answer: False Difficulty: Difficult Section: Purchasing Organization Practice:

Page Reference: 3

5. Typically, there are three models of purchasing organizations: enterprise-level, companylevel, and plant-level.

Answer: True Difficulty: Medium Section: Purchasing Organization Practice:

Page Reference: 4

6. The enterprise‐level purchasing organization is also known as the cross‐company code purchasing organization.

Answer: True Difficulty: Medium Section: Enterprise-Level Purchasing Organization

Page Reference: 4 Practice:

7. The company-level purchasing organization is the most centralized model.

Answer: False Difficulty: Medium Section: Company -Level Purchasing Organization

Page Reference: 4 Practice:

8. The enterprise-level purchasing organization is the most centralized model.

Answer: True Difficulty: Medium Section: Enterprise-Level Purchasing Organization Practice:

Page Reference: 4

9. A plant can belong to more than one company code.

Answer: False Difficulty: Medium Section: Company-Level Purchasing Organization Practice:

Page Reference: 4

10. The most decentralized model of purchasing organizations is the plant‐specific purchasing organization.

Answer: True Difficulty: Easy Section: Plant-Level Purchasing Organization

Page Reference: 5 Practice:

11. A purchasing group is an internal group that is responsible for executing the procurement process.

Answer: False Section: Purchasing Group

Difficulty: Medium Practice:

Page Reference: 6

12. A purchasing organization is an individual or a group of individuals who are responsible for purchasing activities for a material or group of materials.

Answer: False Section: Purchasing Group

Difficulty: Medium Practice:

Page Reference: 7

13. Vendor master data include the data needed to conduct business with a vendor and to execute transactions related to the procurement process.

Answer: True Section: Vendor Master

Difficulty: Medium Practice:

Page Reference: 9

14. The method used to value material is defined in the material master.

Answer: True Section: Material Master

Difficulty: Medium Practice:

Page Reference: 8

15. Different material types have different required material views.

Answer: True Section: Material Master

Difficulty: Medium Practice:

Page Reference: 7

16. General data related to a vendor are accessible to all company codes in a client.

Answer: True Section: Vendor Master

Difficulty: Easy Practice:

Page Reference: 10

17. Purchasing data related to a vendor are accessible to all purchasing organizations.

Answer: False Section: Vendor Master

Difficulty: Easy Practice:

Page Reference: 11

18. Material master data can be defined differently for different organizational levels.

Answer: True Section: Vendor Master

Difficulty: Medium Practice:

Page Reference: 11

19. A purchasing info record is an intersection or combination of material and accounting data.

Answer: False Difficulty: Medium Section: Purchasing Info Record Practice:

Page Reference: 12

20. Accounting data related to a vendor are accessible to all clients in a company code.

Answer: False Section: Vendor Master

Difficulty: Medium Practice:

Page Reference: 11

21. Item categories in a purchase order determine the process steps used to procure materials.

Answer: True Section: Item Categories

Difficulty: Easy Practice:

Page Reference: 13

22. Consumable materials are acquired to be used within an organization.

Answer: True Difficulty: Easy Section: Account Determination Practice:

Page Reference: 14

23. When purchasing consumable materials, an account assignment category and specific account assignment objects must be provided when the purchase order is created.

Answer: True Difficulty: Medium Section: Account Determination Practice:

Page Reference: 16

24. A goods movement is not required when changing the status of material from “in quality inspection” to “unrestricted use”.

Answer: False Section: Goods Movement

Difficulty: Difficult Practice:

Page Reference: 17

25. A plant-to-plant movement of goods does not generate an accounting document.

Answer: False Section: Goods Movement

Difficulty: Medium Practice:

Page Reference: 18

26. A goods receipt cannot be accomplished without a movement type.

Answer: True Section: Goods Movement

Difficulty: Medium Practice:

Page Reference: 18

27. A stock transfer does not involve a change in storage location.

Answer: False Section: Goods Movement

Difficulty: Difficult Practice:

Page Reference: 18

28. A transfer posting changes the stock status of a material and need not involve a physical movement of goods.

Answer: True Section: Goods Movement

Difficulty: Easy Practice:

Page Reference: 19

29. A goods movement is a transaction that causes a change in stock value or status.

Answer: True Section: Goods Movement

Difficulty: Medium Practice:

Page Reference: 17

30. Materials cannot be moved from one company code to another because each company code uses a different set of books.

Answer: False Section: Goods Movement

Difficulty: Difficult Practice:

Page Reference: 18

31. A transfer posting is used to move materials from one storage location to another.

Answer: False Section: Goods Movement

Difficulty: Easy Practice:

Page Reference: 19

32. A transfer posting does not generate a material document.

Answer: False Section: Goods Movement

Difficulty: Medium Practice:

Page Reference: 19

33. Requirements for materials must be created manually.

Answer: False Difficulty: Difficult Section: Requirement Determination Practice:

Page Reference: 21

34. The data needed to create a purchase requisition are the item category, quantity, desired delivery date, and desired delivery location or receiving plant.

Answer: True Difficulty: Medium Section: Requirement Determination Practice:

Page Reference: 22

35. A requisition represents a legal obligation to make the purchase.

Answer: False Difficulty: Medium Section: Requirement Determination Practice:

Page Reference: 22

36. The header section of a purchase order contains information such as purchase order number, vendor, currency, dates, and payment terms.

Answer: True Section: Order Processing

Difficulty: Medium Practice:

Page Reference: 26

37. The primary task of the order processing step is to create and send the purchase order to the vendor.

Answer: True Section: Order Processing

Difficulty: Easy Practice:

Page Reference: 27

38. SAP cannot utilize any media except Web services to communicate a purchase order to a vendor.

Answer: False Section: Order Processing

Difficulty: Easy Practice:

Page Reference: 28

39. Materials ordered in multiple purchase orders must be delivered in multiple shipments.

Answer: False Section: Goods Receipt

Difficulty: Medium Practice:

Page Reference: 29

40. The material master is updated after the invoice verification step of the procurement process has been completed.

Answer: True Difficulty: Easy Section: Invoice Verification Practice:

Page Reference: 36

41. The material master is updated after the goods receipt step of the procurement process has been completed.

Answer: True Section: Goods Receipt

Difficulty: Difficult Practice:

Page Reference: 32

42. Tolerances for price variations among purchase orders, invoices, and goods receipts are allowed, but tolerances for quantity variances are not.

Answer: False Difficulty: Difficult Section: Invoice Verification Practice:

Page Reference: 33

43. Invoice verification authorizes payment of the invoice to the vendor.

Answer: True Difficulty: Easy Section: Invoice Verification Practice:

Page Reference: 36

44. Payments must be made automatically through a payment program.

Answer: False Difficulty: Medium Section: Payment Processing Practice:

Page Reference: 37

45. Electronic payments are sent automatically.

Answer: True Difficulty: Medium Section: Payment Processing Practice:

Page Reference: 38

46. Work lists display lists of master data and documents that are generated during the execution of a process.

Answer: False Section: Work Lists

Difficulty: Difficult Practice:

Page Reference: 41

Package Title: Test bank Course Title: The Fulfillment Process Question type: Multiple Answers 1. Which of the following key organizational elements are unique to the fulfillment process? a. Sales area b. Credit control area c. Client d. Shipping point e. Plant Answer: a, b, d Difficulty: Moderate Section Reference: Organizational Data 2. Which of the following are the typical distribution channels? a. Wholesale b. Sales area c. Online d. Warehouse e. Retail Answer: a, c, e Difficulty: Moderate Section Reference: Organizational Data - Distribution Channel 3. Which of the following are characteristics of a wholesale channel? a. It does not include sales taxes in calculating prices b. It distributes directly to consumers c. It requires a minimum volume of purchase d. It offers volume discounts e. It may designate a specific plant or plants from which deliveries are made Answer: a, c, d, e Difficulty: Moderate Section Reference: Organizational Data - Distribution Channel 4.

A sales area is a unique combination of which of the following elements? a. Client b. Company code c. Sales organization d. Distribution channel e. Division

Answer: c, d, e Difficulty: Moderate

Section Reference: Organizational Data - Sales Area 5. Which of the following can serve as an example of a plant ? a. A manufacturing facility b. An office building c. A shipping point d. A distribution channel e. A storage facility Answer: a, b, e Difficulty: Moderate Section Reference: Organizational Data - Plant 6. Material master data relevant to the fulfillment processes are defined for which of the following organizational levels? a. Client b. Distribution channel c. Plant d. Sales organization e. Shipping point Answer: a, b, c, d Difficulty: Moderate Section Reference: Master Data - Material Master 7. Material master data are grouped into views. Which of the following views are used in fulfillment? a. Basic data b. Client data c. Sales organization data d. Warehouse data e. Sales plant data Answer: a, c, e Difficulty: Moderate Section Reference: Master Data - Material Master 8. Which one of the following are examples of sales units? a. Cartons b. Data c. Crates d. Barrels e. Cases Answer: a, c, d, e

Difficulty: Easy Section Reference: Master Data - Material Master 9. The three segments into which the data in the customer master are divided are ________ a. Financial accounting data b. Sales area data c. Management ainancial data d. General data e. Basic data Answer: a, b, d Difficulty: Moderate Section Reference: Master Data - Customer Master 10. Which of the following departments in an organization are responsible for data in a customer master? a. HR b. Accounting c. Sales d. Information Technology e. Purchasing Answer: b, c Difficulty: Moderate Section Reference: Master Data - Customer Master 11. What are the partner functions that customers can play in the fulfillment process? a. Sold-to party b. Bill-to party c. Ship-to party d. Receiver e. Payer Answer: a, b, c, e Difficulty: Moderate Section Reference: Master Data - Customer Master

12. Organizational data in a sales order include which of the following? a. Shipping data b. Client c. Company code d. Sales area e. Purchasing organization Answer: b, c, d

Difficulty: Difficult Section Reference: Process - Sales Order processing 13. Material master data in a delivery document consist of which of the following? a. Material description b. Unit of measure c. Quantity d. Weight e. Billing date Answer: a, b, d Difficulty: Difficult Section Reference: Process - Shipping 14. Organizational data in a delivery document consist of which of the following? a. Client b. Company code c. Quantity d. Schedule lines e. Shipping point Answer: a, b, e Difficulty: Difficult Section Reference: Process - Shipping 15. The customer credit management process assesses whether credit should be granted when: a. A sales order is created or changed b. Delivery is authorized or changed c. Invoices are created or changed d. The post goods issue step is performed during shipping Answer: a, b, d Difficulty: Moderate Section Reference: Credit Management Process

16. The fulfillment process is integrated with which other processes? a. Asset management b. Project systems c. Production d. Management accounting Answer: b, c, d Difficulty: Moderate Section Reference: Integration with Other Processes

17. Information structures are used to generate which of the following? a. User-defined analysis b. Flexible analysis c. Rigid analysis d. Standard analysis Answer: b, d Difficulty: Easy Section Reference: Reporting Analytics 18. Which of the following statements regarding work lists are true? a. They identify tasks that are ready for completion. b. They contain a list of orders that are scheduled to be shipped by a specific date. c. They generate lists of documents associated with specific master data. d. They consist of standard and rigid analyses Answer: a, b Difficulty: Moderate Section Reference: Reporting Work Lists

Question type: Multiple Choice 19. All of the following are key organizational elements in the fulfillment process except a. Client b. Company code c. Sales area d. Plant e. Warehouse Answer: e Difficulty: Easy Section Reference: Organizational Data

20. Which one of the following combinations of organizational elements is included in the definition of a sales area? a. Sales organization, distribution channel, division b. Sales organization, company code, division c. Client, distribution channel, division d. Client, plant, division e. Sales organization, distribution channel, plant Answer: a Difficulty: Moderate

Section Reference: Organizational Data

21. Which of the following is NOT a typical characteristic of a wholesale channel? a. It does not include sales taxes in calculating prices in the US. b. It distributes goods directly to consumers. c. It requires a minimum volume of purchase. d. It offers volume discounts. e. It may designate a specific plant or plants from which deliveries are made.

Answer: b Difficulty: Moderate Section Reference: Organizational Data - Distribution Channel

22. In the fulfillment process, a plant is a. A manufacturing facility only b. A facility from which the company provides after-sales support c. A facility from which the company delivers only services to its customers d. A storage area e. A facility from which the company delivers products and services to its customers Answer: e Difficulty: Moderate Section Reference: Organizational Data - Plant 23. All of the following are examples of a shipping point except a. A rail depot b. A loading dock c. A storage rack d. A mail room e. A designated group of employees Answer: c Difficulty: Moderate Section Reference: Organizational Data - Shipping Point

24. All of the following are key organizational elements for which material master data are defined for the fulfillment process except a. Client b. Distribution channel c. Plant d. Sales organization e. Shipping point Answer: e Difficulty: Moderate Section Reference: Master Data - Material Master

25. Material master data are grouped into views. Which one of the following combination of views is relevant to the fulfillment process? a. Basic data, sales organization data, sales plant data b. Basic data, company data, sales plant data c. Basic data, sales organization data, client data d. Client data, sales area data, sales plant data e. Basic data, sales area data, warehouse data Answer: a Difficulty: Moderate Section Reference: Master Data - Material Master 26. The data in the customer master are divided into the following three segments: a. Plant data, accounting data, and sales area data b. General data, financial data, and sales zone data c. General data, accounting data, and shipping area data d. Client data, accounting data, and sales zone data e. General data, accounting data, and sales area data Answer: e Difficulty: Moderate Section Reference: Master Data - Customer Master

27. Which master data do companies use to determine the prices of their products? a. Price comparison b. Pricing conditions c. Selling price d. Wholesale price e. Tax allowances Answer: b Difficulty: Moderate Section Reference: Master Data - Pricing Conditions

28. Which action triggers sales order processing in the fulfillment process? a. Delivery of goods to the customer b. Receipt of goods from a vendor c. Receipt of a customer purchase order d. Receipt of payment from customer e. Picking goods for shipment Answer: c Difficulty: Moderate Section Reference: Process

29. What is the final step in the fulfillment process? a. Delivery of goods to the customer

b. c. d. e.

Receipt of payment from the customer Receipt of a customer purchase order Receipt of goods from a vendor Picking goods for shipment

Answer: b Difficulty: Moderate Section Reference: Process 30. Which one of the following represents the correct order of process steps for the fulfillment process? a. Sales order processing , pre-sales activity, inventory sourcing, shipping, billing, payment b. Sales order processing, pre-sales activity, inventory sourcing, billing, billing, payment c. Pre-sales activity, payment, sales order processing, inventory sourcing, shipping, billing d. Pre-sales activity, sales order processing, shipping, billing, inventory sourcing, payment e. Pre-sales activity, sales order processing, inventory sourcing, shipping, billing, payment Answer: e Difficulty: Difficult Section Reference: Process 31. Which of the following types of data is NOT included in a quotation? a. Material master b. Customer-material info records c. Customer master d. Vendor master e. Pricing conditions Answer: d Difficulty: Difficult Section Reference: Process - Pre-sales Activity 32. Which of the following types of data is NOT included in a billing document? a. Data from the customer master b. Data from the sales order c. Data from the delivery document d. Organizational data e. Pricing conditions Answer: e Difficulty: Difficult Section Reference: Process - Billing 33. The shipping step concludes with _________ a. Goods issue b. Picking c. Packing d. Goods receipt e. Goods delivery

Answer: a Difficulty: Difficult Section Reference: Process - Shipping 34. Which of the following organizational levels is NOT relevant to the fulfillment process? a. Purchasing organization b. Shipping point c. Storage location d. Sales area e. Plant Answer: a Difficulty: Moderate Section Reference: Organizational Data

35. Which of the following organizational levels is associated with a company's product line? a. Sales organization b. Sales area c. Distribution channel d. Sales group e. Division Answer: e Difficulty: Moderate Section Reference: Organizational Data - Division

36. Which of the following organizational levels is associated with the method used to distribute materials to a customer? a. Sales organization b. Sales area c. Distribution channel d. Sales group e. Division Answer: c Difficulty: Easy Section Reference: Organizational Data - Distribution Channel 37. Output conditions include all of the following types of data except a. Output type b. Transmission medium c. Transmission time d. Output mode Answer: d Difficulty: Moderate Section Reference: Master Data - Output Conditions

38. Which of the following statements regarding customer master data is NOT true? a. They contain data that are needed to make postings in FI. b. They are valid for a specific sales area. c. They include data that are stored at the client level. d. They include data that are needed to make postings in CO. Answer: d Difficulty: Difficult Section Reference: Master Data - Customer Master 39. Which of the following statements regarding the fulfillment process is NOT true? a. One delivery document can be created from multiple sales order documents. b. An accounting document is created when a goods issue is posted. c. A sales order must be created with reference to a quotation. d. A quotation can generate multiple sales orders.

Answer: c Difficulty: Difficult Section Reference: Process - Shipping, Process - Sales Order processing 40. Which of the following is NOT a key step in the fulfillment process? a. Sales order processing b. Inventory sourcing c. Shipping d. Invoice verification e. Pre-sales activity Answer: d Difficulty: Difficult Section Reference: Process - Pre-sales Activity, Process - Shipping, Process - Sales Order processing 41. Pre-sales activity includes all of the following except a. Customer inquiries b. Quotations c. Mailing campaigns d. Customer purchase orders e. Tracking customer contacts Answer: d Difficulty: Difficult Section Reference: Process - Pre-sales Activity 42. What document is NOT created during the billing step of the fulfillment process if profitability analysis is active? a. An invoice b. An FI document c. A material document d. A CO document

Answer: c Difficulty: Moderate Section Reference: Process - Billing 43. Which of the following is not taken into consideration when determining a customer's credit exposure? a. open orders b. scheduled deliveries c. open invoices d. current purchase orders Answer: d Difficulty: Moderate Section Reference: Credit Management Process

44. The fulfillment process is integrated with all of the following processes except a. Procurement b. Inventory and warehouse management c. Asset management d. Material planning Answer: c Difficulty: Moderate Section Reference: Integration with Other Processes 45. Which reporting options does SAP ERP system support? a. Online lists b. Work lists c. Analytics d. All of the above Answer: d Difficulty: Easy Section Reference: Reporting Question type: True or False

46. Organizational elements essential to the fulfillment process include client, company code, sales area, and plant.

Answer: True Difficulty: Easy Section Reference: Organizational Data

47. A company code is divided into several sales organizations, each of which is responsible for the sale and distribution of goods and services for a particular geographical area.

Answer: True Difficulty: Easy Section Reference: Organizational Data - Sales organization 48. A sales organization is responsible for negotiating terms and conditions of sales for a particular market.

Answer: True Difficulty: Moderate Section Reference: Organizational Data - Sales organization 49. A company code must have at least two sales organizations.

Answer: False Difficulty: Easy Section Reference: Organizational Data - Sales organization 50. A distribution channel is the means by which a company delivers its goods and services to its customers.

Answer: True Difficulty: Easy Section Reference: Organizational Data - Distribution Channel 51. A sales organization must have at least two divisions.

Answer: False Difficulty: Moderate Section Reference: Organizational Data - Division 52. A sales area can be assigned to only one company code.

Answer: True Difficulty: Moderate Section Reference: Organizational Data - Division 53. In the case of products, a plant is typically an office building.

Answer: False Difficulty: Easy Section Reference: Organizational Data - Plant 54. A shipping point is a location in a plant at which inbound deliveries are received.

Answer: False Difficulty: Easy Section Reference: Organizational Data - Shipping Point 55. A plant must have at least one shipping point, which must be physically located in that plant.

Answer: False Difficulty: Moderate Section Reference: Organizational Data - Shipping Point 56. Sales plant data include details on how the material will be shipped from the plant.

Answer: True Difficulty: Moderate Section Reference: Master Data - Material Master 57. Customer master data include data needed to conduct business with customers and to execute transactions that are related specifically to the fulfillment process.

Answer: True Difficulty: Moderate Section Reference: Master Data - Customer Master 58. A customer‐material information record is comprised of master data specific to one customer and one material.

Answer: True Difficulty: Moderate Section Reference: Master Data - Customer Material Information Record 59. Pre-sales activity is often triggered by a communication from a customer such as a purchase order.

Answer: False Difficulty: Moderate Section Reference: Process - Pre-sales Activity 60. An inquiry is a request for information regarding a potential order that the customer places with the company.

Answer: True Difficulty: Moderate Section Reference: Process - Pre-sales Activity 61. The final step in the fulfillment process is the receipt of payment from the customer.

Answer: True Difficulty: Easy Section Reference: Process 62. Customer master data are used in the fulfillment process for generating an invoice for materials or services..

Answer: True Difficulty: Easy

Section Reference: Process - Billing 63. In addition to the organizational data, material master data is necessary in the payment step.

Answer: False Difficulty: Moderate Section Reference: Process - Payment 64. Open items are items in the payment step for which payment from the customer has been received.

Answer: False Difficulty: Moderate Section Reference: Process - Payment 65. The fulfillment process acts as a stand-alone process and cannot be integrated with other processes within an organization.

Answer: False Difficulty: Easy Section Reference: Integration with other processes 66. A sales area can be assigned to multiple company codes.

Answer: False Difficulty: Easy Section Reference: Organizational Data - Sales Area 67. A distribution channel can be assigned to multiple company codes.

Answer: False Difficulty: Easy Section Reference: Organizational Data - Distribution Channel 68. A distribution channel can be assigned to multiple sales areas Answer: True Difficulty: Easy Section Reference: Organizational Data - Distribution Channel 69. A sales area can have many distribution channels.

Answer: False Difficulty: Moderate Section Reference: Organizational Data - Sales Area 70. Distribution channels can be used to differentiate between wholesale, retail, and Internet sales strategies.

Answer: True

Difficulty: Easy Section Reference: Organizational Data - Distribution Channel 71. A sales organization is used to divide a market based on geographic characteristics.

Answer: True Difficulty: Easy Section Reference: Organizational Data - Sales Organization 72. A one–to-many relationship exists between a sales area and plants.

Answer: True Difficulty: Moderate Section Reference: Organizational Data - Plant 73. A customer info record is an intersection of customer data and sales data.

Answer: False Difficulty: Moderate Section Reference: Master Data - Customer Material (Info) Record 74. A quotation can result in multiple sales orders.

Answer: True Difficulty: Difficult Section Reference: Process - Pre-sales Activity 75. Multiple quotations can be combined to create one sales order.

Answer: True Difficulty: Difficult Section Reference: Process - Pre-sales Activity 76. A line item in a sales order can include multiple schedule lines.

Answer: True Difficulty: Difficult Section Reference: Process - Sales Order Processing 77. Multiple orders can be combined into one delivery if certain conditions are met.

Answer: True Difficulty: Difficult Section Reference: Process - Sales Order Processing

Package Title: Test bank Course Title: The Production Process Question type: Multiple Answers 1. Which one of the following are key organizational data relevant to the production process? a. b. c. d. e.

Company code Credit control area Client Storage location Plant

Answer: a, c, d, e Difficulty: Moderate Section Reference: Introduction 2.

The master data relevant to the production process are a. Work centers b. Material master c. Bills of material d. Client e. Company code

Answer: a, b, c Difficulty: Difficult Section Reference: Master Data 3. Which of the following are statuses that can apply to a BOM? a. On b. Off c. Active d. Inactive e. Open Answer: c, d Difficulty: Difficult Section Reference: Master Data - Bill of Material 4. What are the basic time elements in the production process? a. Setup time b. Alternate time c. Build time d. Teardown time e. Processing time Answer: a, d, e Difficulty: Moderate Section Reference: Master Data - Product Routing

5. Which of the following can be included in processing time? a. Machine time b. Configuring work center c. Configuring equipment d. Labor time e. Setup time Answer: a, d Difficulty: Moderate Section Reference: Master Data - Work Center 6. Which of the following are the general classifications of time elements in production? a. Floating b. Volatile c. Fixed d. Explosive e. Variable Answer: c, e Difficulty: Moderate Section Reference: Master Data - Product Routing 7. The material master is grouped into different views or segments based on which factors? a. Processes that use the materials b. Material type c. Organizational level d. Material composition e. Material description Answer: a, b, c Difficulty: Hard Section Reference: Master Data - Material Master

8. Examples of production resource tools are a. Raw materials b. Fixtures c. Engineering drawings d. Calibration instruments e. Warehouse building Answer: b, c, d Difficulty: Moderate Section Reference: Master Data - Production Resource Tools 9. A planned order is a formal request that indicates a. How many units of a product are needed b. Where the finished goods are to be shipped

c. What materials are needed d. Where the raw materials are stored e. When the materials are needed Answer: a, c, e Difficulty: Moderate Section Reference: Process - Request Production

10. What are the organizational data that are included in a planned order? a. Client b. Company code c. Plant d. Storage location e. Bill of materials Answer: a, b, c, d Difficulty: Difficult Section Reference: Process - Request Production 11. Which are the following are options when a production manager receives a planned order? a. Create an alternate planned order b. Reject the planned order c. Combine the planned order with other orders d. Authorize the production e. Return the order to purchasing Answer: b, c. d Difficulty: Difficult Section Reference: Process - Request Production 12. A production order typically includes references to which of the following? a. BOM b. Routing c. Work centers d. Sales order e. PRT Answer: a, b. c, e Difficulty: Difficult Section Reference: Process - Authorize Production 13. Which of the following are included in the header information of a production order? a. Status b. Work center c. Plant d. Validity e. Material number Answer: a, c, d

Difficulty: Difficult Section Reference: Process - Authorize Production 14. What data are included in a confirmation? a. Where the work was completed b. How much raw material was used c. Who the material is to be shipped to d. How much work was completed e. Who completed the work Answer: a, d, e Difficulty: Difficult Section Reference: Process - Confirmations 15. Which user inputs are included in a goods receipt? a. Plant b. Material master c. Quantities d. Dates e. Production order number Answer: c, d, e Difficulty: Difficult Section Reference: Process - Goods Receipt 16. SAP ERP systems can communicate with a. Shop floor control systems b. PDC systems c. Systems that automate tasks in work centers d. Storage facilities e. None of the above Answer: a, b, c Difficulty: Difficult Section Reference: Process - Order Release 17. What does a stock requirement list contain? a. Material b. BOM c. Plant d. MRP type e. All of the above Answer: a, c, d Difficulty: Difficult Section Reference: Reporting

Question type: Multiple Choice

18. Which one of the following is NOT a type of organizational data relevant to the production process? a. Company code b. Credit control area c. Client d. Storage location e. Plant Answer: b Difficulty: Difficult Section Reference: Introduction 19. In process industries like chemicals and beverages, the bill of materials is also known as a(n) a. Formula b. List of chemicals c. Bill of chemicals d. Equation e. Material list Answer: a Difficulty: Moderate Section Reference: Master Data - Bill of Material 20. Which one of the following best describes a work center? a. A location where materials are placed right before they are shipped b. Another term used to describe an office building c. A location where value-added work needed to produce a material is carried out d. A shipping dock e. A storage shelf in a warehouse Answer: c Difficulty: Difficult Section Reference: Master Data - Work Center 21. All of the following can serve as a work center except a. A group of machines b. A group of people responsible for completing operations c. A production line d. A work area e. A shipping dock Answer: e Difficulty: Moderate Section Reference: Master Data - Work Center 22. What term describes two simultaneous series of operations needed to build components for a finished product? a. Parallel sequences b. Alternate sequences

c. Same sequence d. Line sequence e. Production sequence Answer: a Difficulty: Moderate Section Reference: Master Data - Product Routing 23. Which one of the following best defines material staging? a. Component materials are moved into storage b. Component materials are received from the vendor c. Component materials are moved from storage and prepared for use d. Defective returned goods are broken down into several components for refurbishment e. Finished materials are moved back into a storage area Answer: c Difficulty: Difficult Section Reference: Master Data - Product Routing

24. What term identifies the list of materials needed to produce one or more units of a finished good? a. Routing b. Source materials c. Component listing d. Bill of components e. Bill of materials Answer: e Difficulty: Moderate Section Reference: Master Data - Bill of Materials

25. At what level are material requirements planning (MRP) and work scheduling data defined? a. Client level b. Plant level c. Company code level d. Sales area level e. Production level Answer: b Difficulty: Moderate Section Reference: Master Data - Material Master

26. Which of the following is not a step in the production process? a. Production authorization b. Goods issue c. Request production d. Billing e. Order release

Answer: d Difficulty: Moderate Section Reference: Process 27. If a company has adopted the make-to-stock strategy, what is the trigger for the production of goods? a. Need to increase inventory b. Customer order c. Request for quotation d. Customer inquiry e. Billing document Answer: a Difficulty: Moderate Section Reference: Introduction 28. Which of the following does a routing identify on a production order? a. The materials or components to be used in production b. The location where operations are to be performed c. The capacity requirements of the production order d. The location of raw materials in the warehouse e. The operations needed to produce a material Answer: e Difficulty: Difficult Section Reference: Process - Authorization Production

29. What step in the production process is used to enter data in to the SAP ERP system when the operations needed to produce a materials are completed? a. Production note b. Confirmation c. Order complete d. Production record e. Production outcome Answer: b Difficulty: Difficult Section Reference: Process - Confirmations 30. The creation of a production order results in several outcomes including all of the following except a. Scheduling b. Availability checks c. Purchase requisitions d. Preliminary costing e. Confirmation Answer: e

Difficulty: Moderate Section Reference: Process - Moderate 31. What operation in the routing is sometimes necessary to prepare materials for use in production? a. Backflushing b. Confirmation c. Material staging d. Recall e. Reservation Answer: c Difficulty: Difficult Section Reference: Master Data - Product Routing 32. Which of the following is not an outcome of a goods issue to a production order? a. The material master is updated to reflect the reduction in the quantity and value of the materials issued b. Actual costs associated with material consumption are calculated c. Material reservations are updated d. A goods receipt is automatically recorded e. An FI document is created to record financial accounting data Answer: d Difficulty: Difficult Section Reference: Process - Goods Issue 33. When the finished goods have been produced the SAP ERP system allows a user to record which of the following? a. Confirmation b. Goods issue c. Order release d. Goods receipt e. Authorize production Answer: a Difficulty: Easy Section Reference: Process 34. Which of the following is an important report in the production process? a. Work list b. Stock requirement list c. Online list d. BOM e. None of the above Answer: b Difficulty: Easy Section Reference: Reporting Question type: True or False

35. A bill of materials identifies the finished goods that are to be shipped to a specific customer.

Answer: False Difficulty: Easy Section Reference: Master Data - Bill of Material 36. An active bill of materials can be used in the production of a material, but an inactive BOM cannot.

Answer: True Difficulty: Easy Section Reference: Master Data - Bill of Material 37. A work center is a location where materials are placed immediately before they are shipped.

Answer: False Difficulty: Easy Section Reference: Master Data - Work Center 38. All operations must be performed in some type of sequence, and many operations can be completed in a variety of sequences.

Answer: True Difficulty: Difficult Section Reference: Master Data - Product Routing 39. Fixed time elements represent the time needed to produce one unit of material.

Answer: False Difficulty: Moderate Section Reference: Master Data - Product Routing 40. Variable time elements are independent of how many units of material are produced.

Answer: False Difficulty: Moderate Section Reference: Master Data - Product Routing 41. Material staging is the process in which component materials are moved from storage and prepared for use.

Answer: True Difficulty: Moderate Section Reference: Master Data - Product Routing 42. Component assignment is a technique that assigns components in a BOM either to a routing or to a specific operation within the routing.

Answer: True Difficulty: Difficult Section Reference: Master Data - Product Routing 43. Production resource tools are movable resources that are shared among different work centers.

Answer: True Difficulty: Moderate Section Reference: Master Data - Product Resource Tools 44. Typically a production order does not include any references to the BOM, routing, or work centers.

Answer: False Difficulty: Moderate Section Reference: Authorize Production 45. Capacity split is a strategy that is used to determine how the production work is to be distributed among machines and/or people Answer: True Difficulty: Moderate Section Reference: Process - Authorize Production 46. After production has been completed, a goods receipt against the production order is used to pick the goods and ship them to the customer Answer: False Difficulty: Difficult Section Reference: Process - Goods Receipt 47. If the bill of materials and the routing data are changed after the production order has been created, the system must be manually instructed to reenter the data Answer: True Difficulty: Difficult Section Reference: Process - Authorize Production 48. A time ticket is used to record the amount of time required to complete various operations Answer: True Difficulty: Easy Section Reference: Process - Confirmations 49. Material staging is a technique that is used to automatically record the goods issue when an order is confirmed Answer: False Difficulty: Difficult

Section Reference: Master Data - Product Routing 50. Periodic processing is also known as period-end closing Answer: True Difficulty: Moderate Section Reference: Process - Periodic Processing 51. Overhead allocation, work in process determination, and order settlement are all included in periodic processing Answer: True Difficulty: Moderate Section Reference: Process - Periodic Processing 52. A technically complete status for a production order means that even though the main material is complete, other production processes may be needed to complete smaller components of the material Answer: False Difficulty: Moderate Section Reference: Process - Authorize Production

Package Title: Test bank Course Title: Inventory and Warehouse Management Processes Question type: Multiple-Answer 1. Which of the following are examples of goods movements? a. b. c. d. e.

Move posting Stock transfer Stock movement confirmation Goods issue Internal order

Answer: b, d Difficulty: Easy Section: Learning Objectives 2. Which of the following are examples of unplanned goods issue? a. b. c. d. e.

Issuing materials to scrap Shipping goods to unplanned storage location Unplanned returns from customers Using materials for internal consumption Issuing materials to sampling

Answer: a, d, e Difficulty: Easy Section: Goods Issue 3. Which of the following represent common stock statuses? a. b. c. d. e.

Temporary location In transit Blocked Unconfirmed Fast-moved item

Answer: b, c Difficulty: Medium Section: Transfer Postings 4. Which of the following occur when a goods receipt is posted for raw materials on a consignment basis? a. b. c. d. e.

The status of the materials is set to consignment stock.

The inventory account is impacted.

The quantity of materials in inventory is increased.

The quantity of materials in inventory is decreased.

The vendor’s account is impacted.

Answer:

a, c

Difficulty: Difficult Section: Transfer Postings

5. A stock transfer can involve movements a. b. c. d. e.

Between storage locations in different plants.

Between plants in different company codes.

Between different storage types within the same storage location.

Between plants in one company code.

Between storage locations within one plant.

Answer: a, b, d, e Difficulty: Difficult Section: Stock Transfers 6. Which of the following are valid techniques for moving materials? a. b. c. d. e.

Stock transport order Stock internal request Stock movement order Two-step procedure Three-step procedure

Answer: a, d Difficulty: Medium Section: Stock Transfers 7. For which of the following scenarios can storage location-to-storage location transfer be applied? a. Materials are wrongly delivered to one plant and need to be relocated to another plant b. Materials are transferred from a temporary storage location in one plant to a permanent storage location in another plant c. Materials are moved via a stock transfer between plants in different company codes d. Materials are initially stored in a temporary staging area and are subsequently moved to a permanent location within the same plant e. Materials received from a vendor are initially placed in a storage location for quality inspection to be performed before being placed in permanent location Answer: d, e Difficulty: Difficult Section: Storage location-to-storage location transfer 8. Which of the following are examples of limitations of using a stock transfer to move materials from one plant to another? a. The company cannot track the progress of the transfer. b. The costs of transporting the materials are not taken into account. c. Valuation can be based only on the book value of the materials at the sending plant, not on the negotiated value. d. Valuation can be based only on the negotiated value of the materials, not on the book value. e. Valuation can be based only on the book value of the materials, not on the fair market value.

Answer: a, b, c Difficulty: Medium Section: Stock transport orders

9. A stock transport order can involve steps from which of the following processes? a. b. c. d. e.

Fulfillment Production Plant management Procurement Inventory management

Answer: a, d, e Difficulty: Medium Section: Stock transport orders 10. Which of the following statements apply to stock transport orders? a. Goods can be received into quality inspection or blocked stock statuses. b. Goods received can be posted to consumption accounts rather than material accounts. c. Purchase requisitions can be converted to purchase orders. d. No history is available to track the tasks associated with STOs. e. An availability check can be executed to assess material availability in the supplying plant.

Answer: a,b, e Difficulty: Difficult Section: Stock transport orders with delivery and billing 11. Which of the following are rules that apply when linking warehouses to storage locations? a. b. c. d. e.

A warehouse cannot be linked to storage locations across multiple plants.

A warehouse must be linked to at least one storage location.

Not all storage locations must be linked to a warehouse.

A storage location can be linked to one or many warehouses.

A warehouse can be linked to storage locations across multiple plants.

Answer: b, c, e Difficulty: Medium Section: Organizational data in warehouse management 12. Which of the following are key master data elements in warehouse management? a. b. c. d. e.

Material master Storage bins Storage section Warehouse Storage area

Answer: a, b Difficulty: Easy Section: Master data in warehouse management 13. Which of the following organizational levels are relevant to the warehouse management view of master data? a. Company code

b. c. d. e.

Storage type Plant Storage bin Warehouse

Answer: a, c, e Difficulty: Medium Section: Material master 14. Which of the following organizational data are included in a transfer requirement. a. b. c. d. e.

Storage location Source of requirement Warehouse number Storage bin Transfer date

Answer: a, c Difficulty: Medium Section: Plant warehouse movement -> Data 15. Which of the following typically are sources of a transfer requirement for warehouse movement? a. b. c. d. e.

Invoice Delivery document Production order Purchase order Material document

Answer: b, c, e Difficulty: Medium Section: Tasks 16. Which of the following transaction data are included in a transfer order? a. b. c. d. e.

Storage location Destination storage bin Client Source storage bin Material master

Answer: b, d Difficulty: Medium Section: Execute warehouse movement -> Data 17. Which of the following statements are TRUE regarding the header in a transfer order? a. The data are always applicable to one line item because a transfer order is created for each material individually. b. The data are applicable to all line items. c. The data can be either applicable to one or several line items, and this must be explicitly specified in the document. d. The header data can include transfer order number, dates, and warehouse movement type.

e. The header data can include source storage type, material number, and bin.

Answer: b, d Difficulty: Medium Section: Execute warehouse movement -> Data 18. Examples of reference documents for a transfer order are a. b. c. d. e.

Transfer requirement.

Change request.

Storage location request.

Material document.

Delivery document

Answer: a, d, e Difficulty: Medium Section: Tasks 19. Which of the following are warehouse management steps related to the procurement process? a. b. c. d. e.

Create invoice Post goods issue Create outbound delivery Create transfer order Create transfer requirement

Answer: d, e Difficulty: Medium Section: Plant warehouse movement 20. Which of the following are inventory management steps related to the fulfillment process? a. b. c. d. e.

Create invoice Post goods issue Create outbound delivery Create transfer order Confirm transfer order

Answer: b, c Difficulty: Medium Section: Plant warehouse movement 21. Which of the following are warehouse management steps related to the production process? a. b. c. d. e.

Create invoice Goods issue Create outbound delivery Create transfer order Create transfer requirement

Answer: d, e Difficulty: Medium

Section: Warehouse management in production 22. In a stock transfer from one bin to another within the same warehouse, which of the following statements apply? a. b. c. d. e.

Warehouse movements are involved.

This is an internal transfer, so no warehouse movements are involved.

There is always an FI impact involved.

A transfer requirement is created automatically.

A transfer requirement must be created manually.

Answer: a, e Difficulty: Difficult Section: Warehouse management in stock transfers 23. Which of the following are scenarios under which stock transfers involving warehouse movements can occur? a. Stock transfer from a plant where the storage location is not warehouse managed to a plant where it is b. Stock transfer from a storage bin in a non warehouse-managed storage location to a storage bin in another non warehouse-managed storage location c. Stock transfer between two non warehouse-managed storage locations d. Stock transfer from a plant where the storage location is warehouse managed to a plant where it is not e. Stock transfer between two warehouse-managed storage locations Answer: a, d, e Difficulty: Difficult Section: Warehouse management in stock transfers 24. The key links between inventory management and warehouse management are a. b. c. d. e.

Transfer orders.

Storage locations.

Transfer requirements.

Association of storage locations to a warehouse.

Storage sections.

Answer: c, d Difficulty: Easy Section: Chapter summary

Question type: Multiple- Choice 25. Which of the following statements about the goods receipt step are NOT true? a. b. c. d. e.

It results in a decrease in inventory.

It can occur during the procurement process.

It can result in the creation of material and financial accounting documents.

Materials are placed in an appropriate storage location with an appropriate status.

It can occur during the production process.

Answer: a Difficulty: Medium Section: Goods Receipt 26. The key organizational level associated with inventory management is a. b. c. d. e.

Plant.

Company code.

Storage section.

Storage area.

Storage location.

Answer: e Difficulty: Easy Section: Inventory Management 27. When do unplanned receipts occur? a. b. c. d. e.

When an invoice has been canceled When material is transferred to another location When a reference document does not exist When a stock transfer is created When the capacity of a storage location is exceeded

Answer: c Difficulty: Medium Section: Goods Receipt 28. In the production process, a goods issue reflects a. b. c. d. e.

Moving raw materials or semifinished goods from a work center to storage bins.

Shipping finished goods or trading goods to a customer to fill a sales order.

Issuing finished goods to a production order.

Shipping finished goods to a customer against a goods issue request.

Issuing raw materials or semifinished goods to a production order.

Answer: e Difficulty: Medium Section: Goods Issue 29. Which of the following scenarios requires material-to-material posting? a. Changing the material status from consignment to warehouse stock b. Changing the material number of a material c. Changing the material’s storage location d. Changing the status of materials in stock e. Changing the type of materials in stock Answer: b Difficulty: Easy Section: Transfer Postings

30. Which one of the following is NOT an example of using transfer postings? a. Changing the material status from consignment to warehouse stock b. Changing the material number of a material c. Changing the material’s storage location d. Changing the status of materials in stock e. Changing the type of materials in stock Answer: c Difficulty: Easy Section: Transfer Postings 31. What is a stock transfer used for? a. To change the status or type of materials in stock b. To show material movements when a material is received in the warehouse from the vendor’s location c. To indicate that a material-to-material change has been posted d. To physically move materials from a storage location to the client’s warehouse e. To physically move materials within the enterprise from one organizational level or location to another Answer: e Difficulty: Easy Section: Stock Transfers 32. Which of the following options is appropriate when two locations are physically close to each other and there is no significant time lag between issue and receipt? a. b. c. d. e.

One-step procedure Two-step procedure Three-step procedure Stock transport order None of the above

Answer: a Difficulty: Difficult Section: Stock Transfers 33. A storage location-to-storage location transfer involves which of the following? a. b. c. d. e.

A stock transfer among several storage locations of two plants A stock transfer between two storage locations of two plants A stock transfer among several storage locations within the same plant A stock transfer between two storage locations within the same plant A stock transfer between or among at least two storage locations within one or more plants

Answer: d Difficulty: Easy Section: Storage location-to-storage location transfer 34. In plant-to-plant transfer, an FI document

a. b. c. d.

Is created in both one-step and two-step movements.

Is created in two-step movements only.

Is created in one-step movements only.

Is not created.

Answer: a Difficulty: Easy Section: Plant-to-plant transfer 35. Which of the following represents the hierarchy of a warehouse? a. b. c. d. e.

Warehouse, storage section, storage type, storage bin Warehouse, storage bin, storage section, storage type Warehouse, storage type, storage section, storage bin Warehouse, storage section, storage bin, storage type Warehouse, storage type, storage bin, storage section

Answer: c Difficulty: Medium Section: Storage Type 36. Shelf storage, pallet storage, and rack storage are examples of a. b. c. d. e.

Storage bins.

Warehouses.

Storage sections.

Storage types.

None of the above

Answer: d Difficulty: Medium Section: Storage Type 37. A storage type is a division of a warehouse based on the characteristics of the a. b. c. d. e.

Weight, width, and type Dimensions and profitability.

Space, materials, and activity.

Price, space, and type.

Usage, price, and dimensions.

Answer: c Difficulty: Medium Section: Storage Type 38. Fast-moving, slow-moving, heavy, light, large, and small are examples of a. b. c. d. e.

Storage bins.

Warehouses.

Storage sections.

Storage types.

None of the above.

Answer: c Difficulty: Medium Section: Storage Section 39. A picking area groups which of the following elements? a. b. c. d. e.

Shelves and pallets Storage bins, based on similar picking strategies Materials with similar transportation type Materials with similar usage Materials of the same material type

Answer: b Difficulty: Medium Section: Picking area 40. If a company stores a material in a storage location that is associated with a warehouse, then it must include additional data a. b. c. d. e.

In the storage location stock view of the material master for that material.

In the basic data view of the material master for that material.

In the general plant data/storage view of the material master for that material.

In the warehouse management view of the material master for that material.

No data need to be added.

Answer: d Difficulty: Medium Section: Material master 41. Shelves, stacks, and aisles are examples of a. b. c. d. e.

Storage locations.

Coordinate systems for addresses.

Storage sections.

Storage identifiers.

Storage areas.

Answer: b Difficulty: Easy Section: Storage bins 42. Which of the following represents the document used to plan the movement of materials into and out of bins in a warehouse? a. b. c. d. e.

Transfer list Transfer request Transfer plan Transfer order Transfer requirement

Answer: b Difficulty: Medium

Section: Plan Warehouse movement 43. Which of the following is a request to change the status of the material? a. b. c. d. e.

Posting change notice Notice for change Material change list Status request list Change request

Answer: a Difficulty: Easy Section: Tasks 44. When creating a transfer order, you find that a particular material has to be moved from multiple source bins. Which of the following statements follows from this scenario? a. b. c. d. e.

The transfer order will have multiple line items for the material.

More than one transfer order needs to be created.

The material will be written in one line item.

An internal order request will be created to move the material into one source bin.

This scenario is impossible.

Answer: a Difficulty: Difficult Section: Execute warehouse movement -> Data 45. The ERP system can create transfer orders automatically, but only when a. b. c. d. e.

A destination is known.

The reference document is a transfer requirement A warehouse movement type is specified.

A reference document exists.

Both the plant and the storage location are known.

Answer: d Difficulty: Medium Section: Tasks 46. Which of the following represents a possible sequence of steps in the warehouse movement process? a. Create a transfer request, physically move the materials, confirm the movement, retrieve the transfer request b. Physically move the materials, confirm the movement, create a transfer request, retrieve the transfer request c. Physically move the materials, generate a transfer order, confirm the movement, retrieve the transfer order d. Generate a transfer order, retrieve the transfer order. confirm the movement, physically move the materials e. Generate a transfer order, physically move the materials, retrieve the transfer order, confirm the movement Answer: e

Difficulty: Difficult Section: Confirm warehouse movement 47. In warehouse management steps associated with the procurement process, the warehouse inventory is calculated as sum of the inventory in the following places: a. b. c. d. e.

Storage sections and storage areas Warehouse bins and storage sections Interim storage areas and warehouse bins Storage locations and storage sections Storage locations and storage areas

Answer: c Difficulty: Medium Section: Confirm warehouse movement 48. In a stock transfer from a plant where the storage location is warehouse managed to a plant where it is not, which of the following activities occurs at the receiving plant? a. b. c. d. e.

A goods receipt triggers WM process steps.

A simple goods receipt is recorded in IM. A goods issue triggers WM process steps.

A simple goods issue is recorded in IM. None of the above

Answer: b Difficulty: Medium Section: Warehouse management in stock transfers 49. In a bin status report, double-clicking on a bin that contains materials a. b. c. d. e.

Produces a drilldown report showing details of the materials.

Opens a screen that enables you to change which bin is shown on the report.

Produces information about the bin location.

Opens a screen where storage bin information can be configured.

Will not display any data.

Answer: a Difficulty: Medium Section: Reporting

50. Warehouse management is typically used a. b. c. d. e.

By organizations that have small quantities of materials.

By transportation companies.

By organizations that have either large quantities of materials or an expensive inventory.

By storage companies.

By organizations that demand better reporting for their inventory.

Answer: c Difficulty: Easy

Section: Chapter summary Question type: True or False 51. A storage location is a key organizational level associated with inventory management.

Answer: True Difficulty: Easy Section: Inventory Management 52. The most relevant category of master data in inventory management is the plant.

Answer: False Difficulty: Medium Section: Inventory Management 53. A goods receipt cannot be posted without reference to an order.

Answer: False Difficulty: Easy Section: Goods Receipt 54. Planned receipts occur when a reference document, such as a purchase order or a production order, does not exist.

Answer: False Difficulty: Easy Section: Goods Receipt 55. A goods issue results in the creation of appropriate material, FI, and CO documents.

Answer: True Difficulty: Easy Section: Goods Issue 56. A goods issue, unlike a goods receipt, can be posted without reference to an order.

Answer: False Difficulty: Easy Section: Goods Issue 57. A goods issue, unlike a goods receipt, results in a decrease in inventory.

Answer: True Difficulty: Easy Section: Goods Issue 58. A transfer posting always involves an actual movement of materials.

Answer: False

Difficulty: Easy Section: Transfer Postings 59. To change a material number you need to create a change request.

Answer: False Difficulty: Easy Section: Transfer Postings 60. In a consignment scenario, when raw materials are consumed in the production process, the status of the materials is changed from warehouse stock to consignment.

Answer: False Difficulty: Medium Section: Transfer Postings 61. A stock transfer involves physically moving materials.

Answer:

True

Difficulty: Easy Section: Stock Transfers 62. One-step procedure, two-step procedure, and stock transport order are strategies for moving materials.

Answer: True Difficulty: Medium Section: Stock Transfers Difficulty: Easy Section: Stock Transfers 63. A material document is created during both the one-step and two-step procedures.

Answer: True Difficulty: Easy Section: Stock Transfers 64. During the one-step procedure, two material documents are created.

Answer: False Difficulty: Easy Section: Stock Transfers 65. Moving materials between two storage locations within the same plant or different plants is known as storage location-to-storage location transfer.

Answer: False Difficulty: Medium

Section: Storage location-to-storage location transfer 66. One-step procedure is possible only when the materials are in unrestricted use at the supplying location.

Answer: False Difficulty: Medium Section: Storage location-to-storage location transfer

67. When transferring materials between storage locations in the same plant, if quantities are valued in the same way, then no FI document is created.

Answer: True Difficulty: Medium Section: Storage location-to-storage location transfer 68. In plant-to-plant transfer in the two-step method, the FI document is created at the time of receipt.

Answer: False Difficulty: Difficult Section: Plant-to-plant transfer 69. A movement of materials between two plants in different company codes is called a company code-to-company code transfer.

Answer: True Difficulty: Easy Section: Company code-to-company code transfer 70. Stock transport orders with delivery include the invoice verification step.

Answer: False Difficulty: Easy Section: Stock transport orders with delivery 71. In stock transport orders with delivery and billing, valuation is based on the purchase price in the STO. Answer: True Difficulty: Medium Section: Stock transport orders with delivery and billing 72. Inventory management keeps track of the quantity of materials in storage location, but it cannot determine their exact location.

Answer: True Difficulty: Easy Section: Stock transport orders with delivery and billing

73. A storage location can be linked to only one warehouse.

Answer: True Difficulty: Easy Section: Organizational data in warehouse management 74. A storage type is a division of a storage section that is based on the characteristics of the space, materials, or activity.

Answer: False Difficulty: Easy Section: Storage type 75. Storage sections represent the physical links between IM and WM. Answer: False Difficulty: Medium Section: Storage type 76. Shelf storage is an example of a storage type Answer: True Difficulty: Easy Section: Storage type 77. Lightweight materials are designated as fast-moving materials.

Answer: False Difficulty: Easy Section: Storage section 78. A picking area groups materials with the same material type.

Answer: False Difficulty: Easy Section: Picking area 79. Storage bins are the smallest unit of space in a warehouse.

Answer: True Difficulty: Easy Section: Storage bins 80. Transfer requirements can be created manually as well as automatically.

Answer: True Difficulty: Medium Section: Tasks

81. Transfer orders are used to execute warehouse movements.

Answer: True Difficulty: Easy Section: Execute Warehouse Movement 82. Transfer orders can only be created automatically.

Answer: False Difficulty: Easy Section: Execute Warehouse Movement 83. Target quantities, destination storage type, bin, and quant are examples of line item data in a transfer order.

Answer: True Difficulty: Medium Section: Execute warehouse movement -> Data 84. Transfer orders in the execute warehouse management step can be created with or without a reference document.

Answer: True Difficulty: Easy Section: Tasks 85. One of the steps of the inventory management process related to procurement is post goods issue.

Answer: False Difficulty: Easy Section: Plant warehouse movement 86. Inventory management in the production process involves a goods issue and a goods receipt.

Answer: True Difficulty: Easy Section: Warehouse management in production 87. A stock transfer from a storage bin in one warehouse to a storage bin in another warehouse is a possible scenario under which warehouse movements can occur.

Answer: False Difficulty: Easy Section: Warehouse management in stock transfers

Package Title: Test bank Course Title: Material Planning Process Question type: Multiple Answers 1.

Material planning is concerned with answering which basic questions?

a. b. c. d. e.

Which planning version should the company choose?

What materials are required?

What is the shortest time required for completing the planning?

When are the materials required?

How many materials are required?

Answer: b, d, e Difficulty: Easy Section: Learning Objectives

2.

Which of the following statements concerning maintaining inventory at high levels are TRUE?

a. b. c. d. e.

The longer the materials remain in storage, the more money the company loses.

Maintaining high levels of inventory can lead to serious write-offs.

Maintaining high levels of inventory is a recommended material planning policy.

Maintaining high levels of inventory can incur insurance costs.

The company may lose money storing excessive inventory, but the customer’s interest must be the company’s highest priority.

Answer: a, b, d Difficulty: Medium Section: Learning Objectives

3.

The proposals that material planning generates typically are in the form of

a. b. c. d. e.

A planning proposal.

Planned orders.

A material order list.

Purchase requisitions.

Purchase list.

Answer: b, d Difficulty: Easy Section: Learning Objectives

4.

Which of the following statements concerning the material planning process are NOT TRUE?

a. b. c. d. e.

It can involve the creation of an operations plan.

The demand management step creates requirements for individual materials.

The final procurement proposals trigger either the production or procurement process.

The requirements step specifies the way the materials will be transported.

MRP uses sales objectives to generate the final procurement proposals.

Answer: d, e Difficulty: Medium Section: Learning Objectives

5.

Which of the following are key organizational elements in materials planning?

a. b. c. d. e.

Company code Shipping point Plant Storage location Sales area

Answer: a, c, d Difficulty: Easy Section: Learning Objectives

6.

Which of the following are master data relevant to material planning?

a. b. c. d. e.

Storage location Bills of material Material master Planning version Production version

Answer: b, c Difficulty: Easy Section: Master Data

7.

Which of the following statements regarding the MRP views of the material master are TRUE?

a. b. c. d. e.

There are four MRP data views.

The system uses the MRP 4 view to select the correct BOM. There are three MRP data views.

The system uses the MRP 3 view to determine how to procure materials (make vs. buy).

The system uses the MRP 1 view to select the correct BOM.

Answer: a, b Difficulty: Medium Section: Master Data

8.

Which of the following statements concerning the outcome of the material planning process are NOT TRUE?

a. b. c. d. e.

The outcome can be multiple procurement proposals.

The outcome is always a single procurement proposal.

The outcome triggers the sales and operations planning step.

The outcome triggers the forecasting planning step.

The outcome can trigger either the production or the procurement process.

Answer: b, c, d Difficulty: Medium Section: Procurement Type

9.

Which of the following represent procurement types?

a. b. c. d. e.

Consumption-based planning External Section 2 None No planning

Answer: b, d Difficulty: Easy Section: Procurement Type

10. Which of the following are production control techniques as indicated by the MRP type in the material master? a. b. c. d. e.

Consumption-based planning External control Internal control Sales order-based planning No planning

Answer: a, e Difficulty: Easy Section: MRP Type

11. Which of the following represent reasons why a company should maintain a safety stock? a. The ERP system can be configured to automatically prevent inventory from falling below the safety stock levels. b. To avoid stock-outs c. Maintaining a safety stock of at least 20 pieces is mandatory in the ERP system. d. Maintaining a safety stock will guarantee that supply meets demand. e. To avoid lost sales Answer: a, b, e Difficulty: Medium

Section: MRP Type

12. Which of the following statements about consumption-based planning are NOT TRUE? a. b. c. d. e.

It includes forecast-based planning as one of its categories.

It calculates the requirements for a material based on historical consumption data.

It is relatively more complicated compared with MRP. It assumes that future consumption will follow the same patterns as past consumption.

It takes into account dependencies between different materials.

Answer: c, e Difficulty: Difficult Section: MRP Type

13. Which of the following statements about MRP and MPS are TRUE? a. b. c. d. e.

MPS calculates requirements for all the levels of the BOM. MRP calculates requirements only for the first-level items in the BOM. Both MRP and MPS calculate requirements based on historical data only.

MRP calculates requirements for all levels of the BOM. MPS calculates requirements only for the first-level items in the BOM.

Answer: d, e Difficulty: Medium Section: MRP Type

14. Which of the following are common time estimates utilized during the planning process? a. b. c. d. e.

Production planning time GR processing time Planned delivery time Planned receiving time In-house production time

Answer: b, c, e Difficulty: Medium Section: Scheduling Times

15. Which of the following are elements of the in-house production time? a. b. c. d. e.

Interoperation Planned delivery Processing GR Setup

Answer: a, c, e Difficulty: Medium Section: Scheduling Times

16. The lot size independent in-house production time is used in which of the following scenarios? a. b. c. d. e.

The lot size is fixed.

Processing time is constant.

Processing time is very short compared to the setup and interoperation times.

Processing time is long in comparison to the setup and interoperation times.

The quantity of material to be produced varies.

Answer: a, b, c Difficulty: Difficult Section: Scheduling Times

17. Multiple BOMs can be created for a single material in which of the following situations? a. b. c. d. e.

The same material is produced in different plants.

The material is produced in the same lot sizes.

The material is produced in different lot sizes.

A bike model is upgraded with a new tire.

The company applies a make-to-order production planning strategy to fulfill a customer order for a material.

Answer: a, c, d Difficulty: Medium Section: BOM Selection Method

18. Which of the following statements regarding a BOM are TRUE? a. b. c. d. e.

A BOM identifies the components needed to make the material.

A BOM identifies the sequence of operations needed to make the materials.

A BOM component can have its own BOM. A BOM identifies the material’s routing strategy.

A BOM is plant specific.

Answer: a, c, e Difficulty: Medium Section: General

19. Which of the following items represent demand elements of the availability check group? a. b. c. d. e.

Purchase requisitions Production orders Purchase orders Safety stock Material reservations

Answer: d, e Difficulty: Medium

Section: Availability Check Group

20. Identify the SAP ERP terms for net requirements planning and planning with final assembly. a. b. c. d. e.

Strategy 10 Strategy 20 Strategy 30 Strategy 40 Strategy 50

Answer: a, d Difficulty: Easy Section: Strategy Group

21. Which of the following statements about a product group are TRUE? a. b. c. d. e.

It is used to group products with similar planning characteristics.

Each member of a product group is assigned a group factor.

Materials can be members of more than one product group for different planning scenarios.

A material can belong to only one product group.

Each member of a product group is assigned a proportion factor.

Answer: a, c, e Difficulty: Difficult Section: Product Groups

22. Sales and operations planning involves the creation of a(n) a. b. c. d. e.

Financial document.

Material movement.

Sales forecast.

Operations plan.

Material document.

Answer: c, d Difficulty: Medium Section: Process

23. a. b. c. d. e.

The MRP controller ________ Is a step in the planning process in which PIRs are transferred to demand management.

Uses variety of reports and makes adjustments to procurement proposals, as needed.

Transfers CIRs into PIRs. Is a planning tool that generates forecasts.

Monitors material availability.

Answer: b, e Difficulty: Medium Section: Process

24. The purpose of the materials requirements planning step is to a. b. c. d. e.

Calculate PIR. Calculate CIR. Calculate net requirements.

Generate procurement proposals (requisitions and planned orders).

Calculate reorder points.

Answer: c, d Difficulty: Medium Section: Materials Requirements Planning

25. Which of the following statements concerning MRP-based planning are TRUE? a. b. c. d. e.

Planning is based on historical data.

Planning is based on exploding the BOM. Dependent demand is derived from independent demand.

It is used for low-value materials.

Planning is based on calculating a reorder point.

Answer: b, c Difficulty: Medium Section: Materials Requirements Planning

26. Which of the following statements regarding MRP are TRUE? a. b. c. d. e.

Planning is executed for only the first level of the material’s BOM. MRP can be executed for one plant only.

MRP can result in planned orders.

MRP can result in purchase orders.

MRP can be executed for a single level or multiple levels of the BOM.

Answer: c, e Difficulty: Medium Section: Materials Requirements Planning

27. Which of the following statements about the MRP step in the material planning process are TRUE? a. b. c. d. e.

MRP can be executed for one plant.

Planning for specific storage location in not possible with MRP. MRP can be executed for multiple plants.

MRP can be executed within MRP areas.

MRP can only be executed manually by the MRP controller.

Answer: a, c, d Difficulty: Medium

Section: Materials Requirements Planning

28. Which of the following are steps in the MRP procedure? a. b. c. d. e.

Check planning file Scheduling Lot size calculation Bins calculation Storage location inspection

Answer: a, b, c Difficulty: Medium Section: Materials Requirements Planning

29. If materials are to be procured externally, then, in the determine procurement proposal step, MRP a. b. c. d. e.

Can create purchase requisitions.

Will always generate planned orders.

Will determine the quantity of material to procure.

Can create planned orders.

Can create schedule lines.

Answer: a, d, e Difficulty: Medium Section: Determine Procurement Proposal

30. Identify which of the following are processing keys: a. b. c. d. e.

Schedule lines Regenerative planning Net change planning Purchase requisition planning Planning mode

Answer: b, c Difficulty: Medium Section: Determine Procurement Proposal

31. Which of the following are tasks in SOP? a. b. c. d. e.

Monitoring exceptions Creating a sales plan Evaluating feasibility Creating revised PIRs Adjusting schedules

Answer: b, c Difficulty: Medium

Section: General

32. Which of the following are possible outcomes in MRP? a. b. c. d. e.

Operations plan Purchase requisitions Production plan Planned orders Dependent requirements

Answer: b, d, e Difficulty: Medium Section: General

33. Which of the following statements about the MRP list are TRUE? a. b. c. d. e.

It displays static data.

It highlights changes to MRP elements.

It is the most important reporting tool.

The MRP controller is the only one authorized to generate it.

It displays MRP elements.

Answer: a, e Difficulty: Medium Section: MRP list

Question type: Multiple Choice

1.

The main objective of material planning is

a. b. c. d. e.

To minimize the expenses for storing excess inventory.

To balance the demand for materials with the supply.

To shorten the duration of the procurement cycle.

To eliminate excess inventory.

To prevent lost sales.

Answer: b Difficulty: Easy Section: Learning Objectives

2.

The money tied up in inventory best represents

a. b. c. d. e.

An opportunity cost.

A liquid asset.

A strategic policy.

A high risk for loss.

A material planning strategy.

Answer: a Difficulty: Easy Section: Learning Objectives

3.

A purchase requisition is

a. b. c. d. e.

A confirmation for purchasing materials.

Proof of delivery.

A document issued by a vendor.

A request to purchase materials.

A confirmation of an inbound delivery.

Answer: d Difficulty: Easy Section: Learning Objectives

4.

Requirements in the material planning process specify

a. b. c. d. e.

The master data requirements.

How the material planning should be executed.

The work center capacity.

Requirements for the different modes of transportation.

How many of the materials are needed and when they are needed.

Answer: e

Difficulty: Easy Section: Learning Objectives 5.

The organizational data elements in material planning are:

a. b. c. d. e.

Plant, production version, company code.

Planning version, company code, client.

Client, company code, production version.

Storage section, client, storage location.

Client, company code, plant, storage location.

Answer: e Difficulty: Medium Section: Learning Objectives

6.

The master data elements in material planning are:

a. b. c. d. e.

Material masters, product types, storage location, vendors.

Product routings, bills of material, material masters, product groups.

Product types, product routings, material masters, product groups.

Product routings, product types, material masters, customers.

Material masters, storage location, product groups, product routings.

Answer: b Difficulty: Medium Section: Master Data

7.

A company has two options for procuring materials: make or buy. Which MRP data view of the material master will the ERP system consider for this decision?

a. b. c. d. e.

MRP 1 MRP 2 MRP 3 MRP 4 None of the above

Answer: b Difficulty: Medium Section: Master Data 8.

Which of the following statements best represents what procurement type indicates?

a. b. c. d. e.

How a material is produced Vendor’s groups All of the ways to procure a material the user will choose from when making a decision Whether a material is produced in house, obtained externally, both, or none How a vendor will be chosen in the procurement process

Answer: d Difficulty: Medium

Section: Procurement Type

9.

MRP type specifies

a. b. c. d. e.

Whether the material is produced in house or is obtained externally.

How material quantities for planning will be calculated.

The production control technique used in planning.

The available time periods the ERP system can use for scheduling.

The strategy for BOM selection.

Answer: c Difficulty: Medium Section: MRP Type

10. Replenishment lead time is a. b. c. d. e.

The time between placing an order and receiving the materials.

The amount of time the routing operations will last.

The length of time a working center usually operates (in hrs, in one day).

Another term for capacity.

A synonym for interoperation time.

Answer: a Difficulty: Medium Section: MRP Type

11. Which of the following statements about consumption-based planning is TRUE? a. b. c. d. e.

Planning is based on historical data.

Planning is based on exploding the BOM. Dependent demand is derived from independent demand.

It is used for high-value materials Planning is based on MPS.

Answer: a Difficulty: Easy Section: MRP Type

12. Which of the following options represents categories of consumption-based planning? a. b. c. d. e.

Materials-requirement planning, time-phased planning, reorder-point planning Master production scheduling, MRP, forecast-based planning MRP, forecast-based planning, master production scheduling Forecast-based planning, time-phased planning, reorder-point planning None of the above

Answer: d Difficulty: Easy Section: MRP Type

13. A company would be most likely to apply consumption-based planning for which of the following products? a. b. c. d. e.

Car Brake Engine Printer Pen

Answer: e Difficulty: Medium Section: MRP Type

14. The MRP technique calculates the requirements for a material based on a. b. c. d. e.

Historical data.

Current data.

The material’s dependence on other materials.

Material type.

Replenishment lead time.

Answer: c Difficulty: Medium Section: MRP Type

15. Exploding the BOM refers to a. b. c. d. e.

Creating the BOM hierarchy showing all the levels of the BOM. Calculating and planning requirements for materials at all levels of the BOM. Executing the BOM for materials at the top level of the BOM. Choosing the planning strategy for the BOM. Generating multiple BOMs for materials in the same material group.

Answer: b Difficulty: Medium Section: MRP Type

16. Requirements that are calculated based on actual and forecasted sales are known as a. b. c. d. e.

Planned independent requirements.

Customer-planned independent requirements.

Integrated independent requirements.

Forecast-independent requirements.

Customer-independent requirements.

Answer: a Difficulty: Medium Section: MRP Type

17. The lot size key specifies the a. b. c. d. e.

Optimum lot size for a group of materials.

Recommended lot size for a material.

Procedure used to determine the capacity of a storage area.

Lot size groups per each material type.

Procedure that is used to determine the lot size.

Answer: e Difficulty: Medium Section: Lot Size Key

18. The static lot-sizing procedure a. b. c. d. e.

Combines the requirements from multiple time periods into one lot.

Specifies a fixed quantity based on fixed lot size.

Specifies a quantity that is fixed for a specific, limited time period.

Specifies a fixed quantity based on either fixed lot size or lot-for-lot.

Combines quantities for multiple time periods into several lots.

Answer: d Difficulty: Difficult Section: Lot Size Key

19. Setup time, processing time, and interoperation time are elements of a. b. c. d. e.

In-house production time.

Goods issue processing time.

Planned delivery time.

Goods receipt processing time.

Planned shipping time.

Answer: a Difficulty: Easy Section: Scheduling Times

20. Setup time is the time required to a. b. c. d. e.

Set up the operations used in a work center.

Move materials from one work center to another.

Process materials in production.

Set up the work centers used in production.

Move materials from one storage location to another.

Answer: d Difficulty: Medium Section: Scheduling Times

21. In SAP ERP production planning strategy, net requirements planning (Strategy 10), procurement proposals are based on a. b. c. d. e.

CIRs and components that are already in stock.

PIRs, with regard to CIRs. PIRs, without regard to CIRs. CIRs, but components are not in stock.

PIRs, but the components are not in stock.

Answer: c Difficulty: Difficult Section: Strategy Group

22. Consider the following scenario, then choose which one of the options below corresponds to the level of CIRs and PIRs after consumption.

Before consumption: Procurement proposal for CIRs: 50 Procurement proposal for PIRs: 50 a. b. c. d. e.

CIRs: 50, PIRs: 0 CIRs: 50, PIRs: 50 CIRs: 0, PIRs: 0 CIRs: 0, PIRs: 50 CIRs: 100, PIRs: 100

Answer: a Difficulty: Medium Section: Consumption Mode

23. The manner in which CIRs consume PIRs is determined by the a. b. c. d. e.

Consumption type.

Consumption mode.

Consumption strategy.

Planning strategy.

Planning type.

Answer: b Difficulty: Easy Section: Consumption Mode

24. What does SOP stand for? a. b. c. d.

Sales and operations planning Strategic operations planning Sales operations planner Systems operations products

e. Sales operations projects Answer: a Difficulty: Easy Section: Process

25. What is SOP used for? a. b. c. d. e.

Creating an operational plan and material documents Calculating the financial impact of the material movements Generating and executing the operations plan Tracking material movements Forecasting and planning

Answer: e Difficulty: Medium Section: Process

26. After the SOP process has generated the production plan, a. b. c. d. e.

SOP executes the plan.

The plan is conveyed to MRP for execution.

The plan is transferred to demand management.

SOP uses the plan to generate execution plan.

The plan is saved as a production version.

Answer: c Difficulty: Medium Section: Process

27. The planning table is best defined as a. b. c. d. e.

An independent tool used for parallel execution of the SOP process.

An interface for transferring data into SOP. An interface used to enter all the operational plans.

A spreadsheet-like tool used to complete the tasks in SOP. A brainstorming session for selecting the most appropriate plan.

Answer: d Difficulty: Medium Section: Tasks

28. Given the information below, calculate disaggregated quantities for touring bikes (TOUR) and off-road bikes (ORBK).

Total production = 100 TOUR proportion factor = 35

ORBK proportion factor = 65 a. b. c. d. e.

TOUR = 35, ORBK = 65 TOUR = 65, ORBK = 35 TOUR = 0, ORBK = 65 TOUR = 35, ORBK = 0 TOUR = 50, ORBK = 50

Answer: a Difficulty: Easy Section: Tasks

29. Master production scheduling is specialized form of a. b. c. d. e.

MRP. Demand planning.

SOP. Production planning.

Operations scheduling.

Answer: a Difficulty: Easy Section: Materials Requirements Planning

30. Given the following information, use the net requirement calculation to calculate the available stock.

MRP type is consumption-based planning.

Plant stock = 100 Receipts = 20 Issues = 10 Safety stock = 30 a. b. c. d. e.

120 130 80 70 110

Answer: a Difficulty: Medium Section: Materials Requirements Planning

31. Given the following information, use the net requirement calculation to calculate the available stock.

MRP type is MPS. Plant stock = 100 Receipts = 20

Issues = 10 Safety stock = 30 a. b. c. d. e.

120 130 80 70 110

Answer: c Difficulty: Medium Section: Materials Requirements Planning

32. In the determine procurement proposal step, for materials with the procurement type of internal, MRP will: a. b. c. d. e.

Generate purchase requisitions.

Provide three options.

Prompt the MRP controller to select the appropriate production version.

Transfer this step to MPS. Always generate planned orders.

Answer: e Difficulty: Easy Section: Determine procurement proposal 33. Which of the following is most likely to trigger the MRP process? a. b. c. d. e.

A periodic planning need Changes to MRP elements The need for an operations plan Events affecting demand Events affecting supply

Answer: b Difficulty: Difficult Section: Various

34. The most important reporting tool in material planning is the a. b. c. d. e.

Planning result report.

MRP list.

Stock overview.

Stock/requirements list.

Strategies list.

Answer: d Difficulty: Easy Section: Stock Requirements List

35. The stock/requirements list displays a. b. c. d. e.

Changes in the planning situation since MRP was run.

MRP elements at an aggregation level.

All MRP elements for a material.

Required materials per production version.

All materials needed per MRP element.

Answer: c Difficulty: Easy Section: Stock Requirements List

Question type: True or False 1. Lack of overall planning may result in excess inventory and lost sales.

Answer: True Difficulty: Easy Section: Learning Objectives

2. When a company transfers part of the materials in stock from one distribution center to another, this scenario is known as stock-out.

Answer: False Difficulty: Easy Section: Learning Objectives

3. Material planning is one of the most complex processes within an organization.

Answer: True Difficulty: Easy Section: Learning Objectives

4. Planned orders are requests to produce materials.

Answer: True Difficulty: Easy Section: Learning Objectives

5. MRP uses requirements to generate the final procurement proposals Answer: True Difficulty: Easy Section: Learning Objectives

6. Storage area is one of the organizational data elements in material planning.

Answer: False Difficulty: Easy Section: Learning Objectives

7. Product routings is one of the master data elements in material planning.

Answer: True Difficulty: Easy Section: Master Data

8. Work scheduling data are defined at the client level.

Answer: False Difficulty: Easy Section: Master Data

9. MRP is defined at the plant level.

Answer: True Difficulty: Easy Section: Material Master

10. MRP data are specific to each plant.

Answer: True Difficulty: Easy Section: Master Data

11. In-house production is the most common procurement type for raw materials.

Answer: False

Difficulty: Easy Section: Procurement Type

12. Semifinished goods are typically purchased from vendors Answer: False Difficulty: Easy Section: Procurement Type

13. MRP type specifies the production control technique used in planning.

Answer: True Difficulty: Easy Section: MRP Type

14. Consumption-based planning calculates the requirements for a material based on current consumption data.

Answer: False Difficulty: Easy Section: MRP Type

15. In time-phased planning, materials are ordered when the stock level reaches a predetermined level known as the reorder point.

Answer: False Difficulty: Medium Section: MRP Type

16. Consumption-based planning assumes that future consumption will follow the same patterns as current consumption.

Answer: False Difficulty: Easy Section: MRP Type

17. In a scenario when the need for brakes depends on the need to produce cars, consumption-based planning will be an appropriate strategy to use.

Answer: False Difficulty: Medium Section: MRP Type

18. Typically, semifinished goods and raw materials have dependent requirements.

Answer: True Difficulty: Easy Section: MRP Type

19. The input to MRP is the independent requirement for the finished goods.

Answer: True Difficulty: Medium Section: MRP Type

20. MPS is a mandatory step in the planning process and is usually followed by MRP. Answer: False Difficulty: Easy Section: MRP Type

21. Period lot-sizing procedures combine the requirements from multiple time periods, such as days or weeks, into one lot.

Answer: True Difficulty: Easy Section: Lot Size Key

22. For externally procured materials, the planned delivery time and the GR processing time are used to determine procurement time.

Answer: True Difficulty: Medium Section: Scheduling Times

23. Lot size dependent times remain the same regardless of the amount of the material being procured.

Answer: False Difficulty: Easy Section: Scheduling Times

24. The BOM selection method in the material master identifies the criteria the system should use to select the BOM.

Answer: True Difficulty: Easy Section: BOM Selection Method

25. A BOM is used only in the materials planning process.

Answer: False Difficulty: Easy Section: Various

26. Planning with final assembly takes into consideration current sales orders.

Answer: True Difficulty: Easy Section: Strategy Group

27. When using planning without final assembly, components are made to order, and the finished product is made to stock.

Answer: False Difficulty: Easy Section: Strategy Group

28. The strategy group defines the strategy the system uses to determine whether a quantity of material will be available on a specific day.

Answer: False Difficulty: Easy Section: Availability Check Group

29. A BOM always identifies the components needed to make one unit of the finished product.

Answer: False Difficulty: Medium Section: Various

30. In make-to-stock strategy the production of the finished goods and any needed semifinished goods is triggered by a sales order.

Answer: False

Difficulty: Easy Section: Strategy Group

31. Consumption-based planning derives dependent demand based on independent requirements and exploding the BOM. Answer: False Difficulty: Easy Section: Consumption Mode

32. A product group groups products with similar planning characteristics, such as similar types.

Answer: True Difficulty: Easy Section: Product Groups

33. Whether SOP is required depends on the production planning strategy used for the material.

Answer: True Difficulty: Medium Section: Process

34. The MRP controller is a program in the SOP process that is responsible for creating procurement proposals and monitoring material availability.

Answer: False Difficulty: Easy Section: Process

35. SOP can be either flexible or standard.

Answer: True Difficulty: Easy Section: Process

36. The operations plan is an outcome of SOP. Answer: True Difficulty: Easy

Section: Sales and operations planning

37. After planning the master schedule items, MRP creates dependent requirements for the components of those items.

Answer: True Difficulty: Medium Section: Materials Requirements Planning

38. MPS is generally appropriate for high-value items only.

Answer: True Difficulty: Easy Section: Materials Requirements Planning

39. MPS creates planned orders for the MPS items and dependent requirements for all items in the BOM. Answer: False Difficulty: Easy Section: Materials Requirements Planning 40. Net requirements calculation is one of the steps in MRP. Answer: True Difficulty: Easy Section: Materials Requirements Planning

41. The lot size calculation step in MRP is used to determine whether there is a need to procure the material.

Answer: False Difficulty: Easy Section: Materials Requirements Planning

42. The ERP system initially uses forward scheduling and employs backward scheduling only if forward scheduling is unsuccessful.

Answer: False Difficulty: Easy Section: Materials Requirements Planning

43. A processing key is a control parameter that determines how the materials in the MRP list will be organized.

Answer: False Difficulty: Easy Section: Dependent Requirement Determination

44. The schedule lines control parameter applies to scheduling agreements.

Answer: True Difficulty: Medium Section: Dependent Requirement Determination

45. The MRP list, unlike the stock/requirements list, highlights changes to MRP elements that have occurred since MRP was executed.

Answer: False Difficulty: Easy Section: MRP List

46. The planning result report aggregates quantities for MRP elements to make it easier to view the overall picture.

Answer: True Difficulty: Easy Section: Planning Result Report