SAP PM Question:

Basically work center category decides the capacity (means
ability to do work). The category defines the activity type
for costing and scheduling the categories mainly we come
accross in the production are labour and machine. Hence to
define labour cost, machine cost and setup cost we define
work center category to create work center and we enter
defaults therein. For a period of time if there are no much
changes we generally prefer production line, and if there
are much changes in the production we prefer activity type
for individual order which we call production order. By
this you can understand cat type 001 for machine and cat
type for labour.

Work center category used to define which screen selection
& field selection for a particular work center.