Hi Krishna,
It's almost a year, I wonder if your problem was solved or not.
I haven't used this FM yet (but I am gonna try it soon)
I think, to use this fm (MB_PHYSICAL_INVENTORY), we have to call it twice.
First call with INV_ACTION = '1'
If no error, then call it again with INV_ACTION = '2'
As I see in some BAPI_MATPHYSINV_*, they do so.
Thanks,
Phu Nguyen