The materaial status is very useful if you want to block the material from being used
at a certain business process.

For example :-

You want to designate a material as a material to be discontinued. In the master record, 
you give the material a status whose parameters have the following settings:

Parameters in transaction OMS4 (Double click the status line items for IMG Settings) :

Purchasing                    "B" = error message

MRP                            "A" = warning

Inventory Management " "   = no message
 

If the material is used, this parameter assignment has the following effect:

Purchasing
You can perform no further purchasing function for the material; for example, you can 
enter no further purchase order for the material. 
In this instance, you are given a corresponding error message. 
 

MRP
If you plan requirements for the material, you are warned that the material is one to 
be discontinued. 
 

Inventory Management
You can continue to withdraw the material from stores; no message is given. 
 

Best regards,
SAP Basis, ABAP Programming and Other IMG Stuff
http://www.sap-img.com