Materials Group Hierarchy

Hi SAP Experts,

We are using SAP ECC6.0. I want to create a hierarchy in Material Groups.  I am reading other forums on material groups but all are for SD or IS-Retail.  Is it possible to create material group hierarchy in MM?  For instance our hierarchy is:

1. 0    Pipes
   1. 1   Water pipes
   2. 2   Electrical pipes

Is it possible to have water and electrical pipes be under the 1.0 Pipes material group?  If we want to make analysis on Purchase Orders for a material group in ME2N, such as:

1. When we choose material group 1.0 for pipes, it will show purchase orders for 1.1 water pipes and 1.2 electrical pipes.  
2. If we want to show Purchase Orders for material group 1.1 water pipes it will only show all purchase orders for 1.1 water pipes only.

Is this possible in SAP?

Thanks,

Matt