Hi,
You should know the basic difference between Material Type and Material Group where Material Group used as key to group together several materials or services with the same attributes. Each Material master or Service master is assigned to a specific material group. Material group is used for reporting purpose, restrict the scope of analyses and search material master details with a search helps. It does not have any other controlling features unlike material type which has a number of controlling features with other major controlling features too with regards to material management and financial accounting.
As material type play vital role on material numbering – either you can go for creating more number of material types for your material numbering for different categories or minimize creation of material types with material having same basic attributes and grouped together by assigning to a material type.
Regards,
Biju K