What is item category and how is it determined?

Item category controls what the item does in the sales document and in any subsequent processing for business transaction. Item category is defined with four digit key.

The Item Category is determined by 4 parameters:

•Item categories are assigned to sales document types.
•Item Category group from Material Master Record.
•Item Usage: The usage for the item is set internally in the program.
•Item Category of higher level item.