Materials with the same basic attributes are grouped together and assigned to a material type. This allows you to manage different materials in a uniform manner in accordance with your company's requirements. Examples of material types are given in the graphic below.

When you create a material master record, the material type you choose determines:

• Whether the material is intended for a specific purpose, for example, as a configurable material or process material

• Whether the material number can be assigned internally or externally

• The number range from which the material number is taken

• Which screens appear and in what sequence

• Which departmental data you may enter

• What procurement type the material has; that is, whether it is manufactured in-house or procured externally, or both

Together with the plant, the material type determines the material's inventory management requirement; that is:

• Whether changes in quantity are updated in the material master record

• Whether changes in value are also updated in the stock accounts in financial accounting

In addition, the accounts affected by a material entering or leaving the warehouse depend on the material type.