What is Item category, Item category group, Item usage, Higher level item category? Kindly explain one by one.
What is material type?
all of these are used by SAP to determine how the system processes your material. when you create a material (t-code MM01), the item category group could be proposed based on the material type you used, or you may manually specify in the material master data.
you specify in IMG what specific item category the system will propose when SAP sees the material with the item category group. for example, when you create a sales order for a material with item category group NORM, the system will propose item category TAN. it is in the item category (i.e. TAN) that most settings are made (how prices, deliveries, credit management, etc. should be processed).
item usage includes functionalities such as free goods, free-of-charge, material determination, etc. condition records have indicators that specify usage. again, when SAP sees these indicators it will propose other item categories that will enable the desired functionality.
higher level item categories are used in material BOMs. for example, a material A may have components B, C & D. you may have configured that the BOM will explode if material A is entered in the order so that B, C & D are automatically shown.
if material A has item category group ERLA, and you create a sales order for this material, the system will propose item categories for materials A, B, C & D. material A will be the higher level item, with item category TAQ (pricing and inventory relevance at this level).
SAP will propose item category TAE for materials B, C & D which all have item category group NORM, after looking at higher level item A with item category TAQ (pricing and inventory not relevant at this level).
hope this helped.
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