ERP Materials 4 — Questions and Answers
Question 1: Which ERP process is used when a vendor delivers the wrong quantity and the company needs to formally send back excess items?
- Goods issue cancellation
- Return delivery to vendor (Correct answer)
- Credit memo request
- Material write-off posting
Correct answer: Return delivery to vendor
A return delivery to vendor is the ERP transaction that formally sends back excess or incorrect goods and reverses the inventory increase from the original goods receipt.
Question 2: In ERP procurement, what is 'spend analysis'?
- Reviewing vendor payment delays
- Examining historical purchasing data to identify savings opportunities and supplier consolidation (Correct answer)
- Auditing employee expense reports
- Calculating material standard costs for the next fiscal year
Correct answer: Examining historical purchasing data to identify savings opportunities and supplier consolidation
Spend analysis aggregates and categorizes purchasing data to reveal trends, maverick spending, and opportunities to negotiate better terms or consolidate suppliers.
Question 3: What is an 'info record' (purchasing info record) in SAP-style ERP systems?
- A log of all rejected purchase orders
- A master data record storing conditions, prices, and lead times for a specific material-vendor combination (Correct answer)
- A document tracking goods in transit
- An internal memo about quality defects
Correct answer: A master data record storing conditions, prices, and lead times for a specific material-vendor combination
A purchasing info record stores the agreed price, lead time, and conditions for a specific combination of material and vendor, automatically populating purchase orders.
Question 4: What does 'available-to-promise (ATP)' checking in ERP materials management do?
- Confirms that a vendor can deliver by the requested date
- Verifies whether enough unreserved inventory and supply exists to fulfill a customer order by its requested date (Correct answer)
- Approves a purchase requisition based on budget availability
- Validates material quality before shipment
Correct answer: Verifies whether enough unreserved inventory and supply exists to fulfill a customer order by its requested date
ATP checking calculates available inventory minus existing commitments plus planned receipts to determine if a new customer order can be confirmed for a specific delivery date.
Question 5: Which ERP inventory valuation approach records all inventory at a predetermined cost regardless of actual purchase prices?
- Moving average price
- FIFO costing
- Standard price (standard cost) (Correct answer)
- Actual cost method
Correct answer: Standard price (standard cost)
Standard price valuation assigns a fixed predetermined cost to every unit of a material, and any difference from the actual purchase price is posted to a price variance account.
Question 6: What is a 'source list' in ERP procurement?
- A list of approved vendors for specific materials, controlling which suppliers can be used (Correct answer)
- A log of all open purchase orders by commodity
- A directory of internal cost centers authorized to purchase
- A schedule of upcoming vendor deliveries
Correct answer: A list of approved vendors for specific materials, controlling which suppliers can be used
A source list defines the approved suppliers for a material and can be configured to block purchasing from non-listed vendors or to automatically assign vendors during MRP.
Question 7: In ERP warehouse management, what is a 'transfer order'?
- A financial instruction to move funds between accounts
- A warehouse-level instruction to physically move materials from one bin to another (Correct answer)
- A legal document transferring inventory ownership to a customer
- An inter-company purchase order
Correct answer: A warehouse-level instruction to physically move materials from one bin to another
A transfer order is a warehouse management instruction that directs workers to pick materials from a source bin and place them in a destination bin.
ERP Materials 4
Which ERP process is used when a vendor delivers the wrong quantity and the company needs to formally send back excess items?