Which of the following is a prerequisite for external refurbishment?

Which of the following is a prerequisite for external refurbishment?
A . Define the order type for external refurbishment.
B . Select the material group for externally refurbished materials.
C . Assign an external work center to a maintenance order operation
D . Activate the subcontracting indicator in an external activity.

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Answer: D

Explanation:

External refurbishment is the process of sending defective or worn-out spare parts to an external vendor for repair or replacement. To carry out this process, you need to create a maintenance order with an external operation that has the subcontracting indicator activated. This indicator allows you to create a purchase requisition and a purchase order for the external service. The external operation also requires an external work center, a control key, and a material component with the valuation type of the defective part. The order type for external refurbishment is not a prerequisite, but a configuration option that can be used to differentiate the process from internal refurbishment. The material group for externally refurbished materials is not relevant for the process, as the material master data is not changed by the refurbishment. The assignment of an external work center to a maintenance order operation is necessary, but not sufficient, for external refurbishment. You also need to activate the subcontracting indicator in the external activity.

Reference: Explaining Refurbishment of Spare Parts, section “Refurbishing Spare Parts Externally” Refurbishment of Repairable Spares: Integration between SAP-PM and SAP-MM, section “4.2

External Refurbishment: Major Steps”