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 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 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 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:
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
Page Reference: 4 Practice:
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