what is work order?
And why we create it?

The Work Order collects:
* Costs
* Effort (Hours)
* Materials Consumed

Considering this question is related to SAP I will answer as such. SAP uses a work order to collect the costs of the job as when work is performed on a site it is issued to the work team to complete the scope of work that is listed upon it. It collects the materials used, labour, equipment, purchase orders and any other costs element so that they can be accumulated against the business area and also functional location and equipment. Drill down cost reports down to the work order can be initiated from transaction CJR3 which is a powerful cost management tool for the area engineer or manager.

The work order is often linked to a Notification which is used to initiate work (like a work request) and to also store maintenance history. The notification has the ability to store failure codes for MTBF analysis and also capture downtime as well depending on how SAP has been configured.