Note: There are 3 correct answers to this question.
A. Several purchasing organizations to one company code
B. One purchasing organization to several plants across
company codes
C. One purchasing organization to one company code
D. One purchasing organization to several company codes
E. Several purchasing organizations to one purchasing
group
Correct Answers
- A. Several purchasing organizations to one company code
- B. One purchasing organization to several plants across company codes
- C. One purchasing organization to one company code
Detailed Explanation of Each Answer
A. Several Purchasing Organizations to One Company Code – Correct
In SAP S/4HANA, assigning multiple purchasing organizations to a single company code is entirely valid. This setup supports decentralized purchasing models while maintaining financial consistency at the company code level. For instance:- Region-based or product category-based purchasing structures.
- Better control over specific procurement responsibilities.
- Streamlined reporting within a unified company code.
B. One Purchasing Organization to Several Plants Across Company Codes – Correct
This configuration supports centralized purchasing across the enterprise. In this case, a single purchasing organization manages procurement activities for plants that belong to different company codes.- This model is ideal for cross-company procurement.
- Encourages economies of scale in purchasing.
- Also known as a cross-company code purchasing organization.
C. One Purchasing Organization to One Company Code – Correct
This is the standard assignment used in many organizations. Here’s why it works well:- It ensures clarity and control within a specific legal entity.
- The purchasing organization exclusively handles procurement for all plants within one company code.
- Supports localized purchasing operations under strict corporate governance.
D. One Purchasing Organization to Several Company Codes – Incorrect
SAP does not allow a formal assignment of one purchasing organization to multiple company codes. Instead:- A purchasing organization can procure for plants across different company codes (as in Option B).
- But it is not officially assigned to more than one company code in Customizing settings.
E. Several Purchasing Organizations to One Purchasing Group – Incorrect
This statement reflects a misunderstanding of SAP organizational structure. Key points:- Purchasing groups represent individual buyers or buyer teams.
- They are not hierarchical and are not assigned to purchasing organizations.
- Instead, purchasing groups exist independently within a purchasing organization.
Key Takeaways
| Option | Assignment Validity | Reason |
|---|---|---|
| A | Valid | Supports multiple orgs under one code |
| B | Valid | Ideal for centralized, cross-code purchasing |
| C | Valid | Common setup for clear accountability |
| D | Invalid | No formal multi-code assignment allowed |
| E | Invalid | No direct relation between purchasing orgs and groups |
Frequently Asked Questions (FAQs)
1. What is a purchasing organization in SAP?
A purchasing organization is an entity in SAP responsible for procurement activities, including negotiating prices and contracts.2. Can one purchasing organization serve multiple company codes?
Not formally. However, it can handle procurement for plants across different company codes without being directly assigned to them.3. What’s the difference between a purchasing group and a purchasing organization?
A purchasing group is an individual or team of buyers, while a purchasing organization is the overarching unit responsible for procurement strategies.4. Why assign multiple purchasing organizations to one company code?
This setup allows for specialized procurement handling, such as regional or material-specific responsibilities.5. Can a plant belong to multiple purchasing organizations?
Yes. A plant can be linked to different purchasing organizations for different procurement needs, such as local vs. global sourcing.6. Is centralized purchasing better than decentralized?
It depends on your business model. Centralized purchasing offers consistency and volume discounts, while decentralized purchasing supports agility and local control.