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Inventory Management 223

fi gure) in the context of the procurement and production processes. Similarly,
we discussed goods issue (“2” in the fi gure) in the context of the fulfi llment
and production processes. We also addressed stock transfers (“3”) and transfer
postings (“4”) in prior chapters. In this section, we will review and extend the
discussions of these goods movements. Recall that companies perform goods
movements using specifi c movement types that determine what information is
needed to execute the movements and which general ledger accounts will be
affected by the movements.

Figure 7-1: Goods movements

The key organizational level associated with inventory management
is the storage location. We initially discussed storage locations in Chapter 4, in
the context of the procurement process. Recall that storage locations are asso-
ciated with plants, which in turn are associated with company codes. Further,
because inventory management is concerned with material movements, the
material master—and, more specifi cally, the plant/data storage view of
the material master—is the most relevant master data in IM. We also discussed
the plant/data storage view of the material master in Chapter 4.

GOODS RECEIPT

A goods receipt is a movement of materials into inventory; it therefore results
in an increase in inventory. Recall from Chapter 4 that a goods receipt occurs
during the procurement process when a business receives raw materials and
trading goods into inventory from a vendor. In addition, as we discussed
in Chapter 6, a goods receipt takes place in the production process when a

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