Production Planning (PP) and Controlling (CO) Flashcards

What is a 'Bill of Materials' (BOM) in SAP PP?

Answer: A structured list of all components and raw materials needed to produce a finished product

A Bill of Materials (BOM) in SAP PP defines the complete list of components, subassemblies, and raw materials with their quantities required to manufacture one unit of a finished product.

What is a 'routing' in SAP PP?

Answer: A sequence of operations and work centers required to manufacture a product

A routing in SAP PP defines the sequence of manufacturing operations, the work centers involved, and the standard times required to produce a material.

What is a 'production order' in SAP PP?

Answer: A document that initiates manufacturing by defining what to produce, in what quantity, and by when

A production order in SAP PP is a manufacturing execution document that triggers production, reserving components and capacity, and tracking costs and progress.

What is 'capacity planning' in SAP PP?

Answer: Evaluating and adjusting production work center capacities to meet planned production requirements

Capacity planning in SAP PP compares the required production load against available work center capacities to identify bottlenecks and level production schedules.

In SAP Controlling (CO), what is a 'cost center'?

Answer: An organizational unit used to collect and analyze costs for a specific department or function

A cost center in SAP CO is an organizational unit (e.g., Marketing, Manufacturing, IT) where costs are collected and analyzed for internal management reporting purposes.

What is 'overhead allocation' in SAP CO Cost Center Accounting?

Answer: The process of distributing indirect costs from cost centers to cost objects like production orders or projects

Overhead allocation in SAP CO distributes indirect costs (like electricity, rent, or management salaries) from service cost centers to production or project cost objects using allocation cycles.