In SAP S/4HANA, physical inventory methods are used to verify the accuracy of stock quantities recorded in the system by comparing them with actual physical counts. These methods help organizations maintain accurate inventory records and comply with financial and operational requirements. Let’s analyze each option to determine the correct answers.

Explanation of Each Option:

B. Continuous inventory method

Correct : The continuous inventory method allows organizations to perform physical inventory counts on an ongoing basis without interrupting daily operations. This method is particularly useful for high-value or critical items that require frequent verification. Inventory can be counted at any time, and discrepancies are resolved immediately.

Reference : According to SAP documentation, the continuous inventory method supports regular and ad-hoc inventory checks, ensuring up-to-date stock accuracy.

C. Periodic inventory method

Correct : The periodic inventory method involves performing a physical count of all inventory items at specific intervals (e.g., monthly, quarterly, or annually). This method is typically used for compliance with legal or financial reporting requirements. It ensures a comprehensive review of inventory balances at defined points in time.

Reference : SAP documentation highlights that the periodic inventory method is widely used for year-end closing or regulatory audits.

E. Cycle counting method

Correct : The cycle counting method divides inventory into categories (e.g., based on value or turnover rate) and schedules counts for different categories throughout the year. This method minimizes disruption to operations and ensures that all items are counted at least once annually. It is commonly used in warehouses with large inventories.

Reference : SAP supports cycle counting as an efficient way to maintain inventory accuracy without requiring a full shutdown for physical counts.

A. Standard inventory method

Incorrect : The term "standard inventory method" is not a recognized physical inventory method in SAP S/4HANA. Instead, SAP provides specific methods such as continuous, periodic, and cycle counting. This option is not valid.

Reference : SAP does not define a "standard inventory method" as part of its inventory management processes.

D. Actual inventory method

Incorrect : The term "actual inventory method" is not a recognized physical inventory method in SAP S/4HANA. While "actual inventory" refers to the physical stock on hand, it does not describe a specific method for conducting physical counts. This option is not valid.

Reference : SAP focuses on specific inventory methods like continuous, periodic, and cycle counting rather than generic terms like "actual inventory method."

Key References to SAP S/4HANA Documentation:

SAP S/4HANA Inventory Management : Explains the available physical inventory methods, including continuous, periodic, and cycle counting.

SAP Help Portal - Physical Inventory Process : Provides detailed guidance on configuring and executing physical inventory methods in SAP S/4HANA.

Cycle Counting in SAP S/4HANA : Describes how cycle counting is used to maintain inventory accuracy without disrupting operations.

Periodic Inventory Process : Highlights the use of periodic inventory for comprehensive stock verification at specific intervals.