MB-920 Describe Dynamics 365 Supply Chain Management Practice Test 23 — 15 Questions

Question 1

A company uses Dynamics 365 Supply Chain Management and wants to manage the procurement of raw materials from multiple suppliers. They need to compare supplier prices, lead times, and quality ratings before selecting a vendor. Which module should they use?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

Procurement and sourcing. Procurement and sourcing in Dynamics 365 Supply Chain Management covers the entire purchase-to-pay cycle: purchase requisitions, RFQs, purchase orders, vendor comparison, and vendor master data including price, lead time, and quality ratings. Comparing suppliers before selecting a vendor is exactly the RFQ/vendor-evaluation workflow handled by this module.

Answer

Production control

Answer

Sales and marketing

Answer

Inventory management

Question 2

A company uses Dynamics 365 Supply Chain Management and wants to manage the procurement of raw materials from multiple suppliers. They need to compare supplier prices, lead times, and quality ratings before selecting a vendor. Which module should they use?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

LIFO (Last In, First Out). LIFO (Last In, First Out) is the inventory costing method that assumes the most recently produced or purchased items are sold first. In Dynamics 365 Supply Chain Management, LIFO is one of the supported inventory valuation methods and directly matches the requirement described. This method results in cost of goods sold being based on the latest costs, which can be advantageous during inflationary periods.

Answer

Standard cost

Answer

Weighted average

Answer

FIFO (First In, First Out)

Question 3

Which THREE components are part of the Dynamics 365 Supply Chain Management warehouse management system?

Accepted Answer

Mobile device menu items. Mobile device menu items (B) are a core WMS configuration component because they define the buttons and commands warehouse workers use on the Warehouse Management mobile app to perform tasks such as receiving, picking, and counting. Location directives (D) are part of WMS because they determine the put-away and picking locations for inventory movements based on query rules and strategies. Work templates (E) are also a WMS component because they define how work orders are broken into work lines and specify the work type, such as picking or put-away, that drives warehouse execution. Production orders (A) and transfer orders (C) are supply chain documents that can generate warehouse work, but they are not themselves WMS configuration components.

Answer

Production orders

Answer

Transfer orders

Question 4

You are a Dynamics 365 Supply Chain Management functional consultant for a food and beverage company. The company receives raw materials from multiple suppliers and needs to enforce quality inspections on all inbound shipments of dairy products. If a dairy shipment fails inspection, the entire lot must be quarantined and cannot be used in production. Additionally, the company wants to automatically generate purchase orders when the inventory level of a key ingredient falls below a reorder point. The inventory planner will review and approve the suggested orders before they are sent to suppliers. You need to configure the system to: (1) enforce quality inspections on inbound dairy products; (2) automatically quarantine failed lots; (3) generate purchase order suggestions based on reorder points. What should you do?

Accepted Answer

Use quality orders with a sampling plan for dairy products and set inventory status to 'Quarantine' on failure. Set up item coverage with a reorder point and run master planning to generate planned purchase orders.. Quality orders with a sampling plan enforce inspection on inbound dairy receipts, and setting the inventory status to 'Quarantine' on failure prevents the lot from being consumed in production. Item coverage configured with a reorder point (minimum) plus master planning generates planned purchase orders that the planner can review and firm before sending to suppliers, satisfying the 'review and approve' requirement.

Answer

Create a quality order for each inbound dairy shipment and configure a workflow to approve or reject. Use safety stock journal to create purchase orders when stock is low.

Answer

Set up vendor evaluation to inspect dairy suppliers and use inventory blocking to quarantine. Configure master planning with safety stock for automatic purchase orders.

Answer

Create a cycle counting plan for dairy products and set up a quarantine zone in the warehouse. Configure item coverage with a min-max system for automatic purchase orders.

Question 5

A manufacturing company uses Dynamics 365 Supply Chain Management to manage its production. The production manager notices that the planned production orders are not generating the expected material requirements. What should the administrator check first?

Accepted Answer

Ensure the bill of materials (BOM) is approved and active.. The bill of materials (BOM) defines the components required for production. If the BOM is missing or incorrect, material requirements will not be generated. The route is for operations sequencing, not material requirements. Inventory status and capacity constraints affect execution, not planning explosion.

Answer

Verify that the route is correctly defined for the item.

Answer

Check if the item's inventory status is set to 'Open'.

Answer

Review the capacity constraints on the work center.

Question 6

A company wants to use Dynamics 365 Supply Chain Management to automate replenishment of raw materials from suppliers based on current inventory levels. Which feature should they configure?

Accepted Answer

Vendor-managed inventory (VMI). Vendor-managed inventory (VMI) in Dynamics 365 Supply Chain Management is specifically designed to let a vendor monitor a customer's inventory levels and automatically replenish stock based on agreed thresholds and demand signals. It enables collaborative replenishment where the supplier takes responsibility for maintaining agreed inventory levels, which directly matches the requirement to automate replenishment of raw materials from suppliers based on current inventory. The feature includes vendor collaboration workspaces, replenishment rules, and integration with purchase order creation to trigger orders when inventory falls below defined minimums.

Answer

Intercompany orders

Answer

Consignment inventory

Answer

Purchase agreements

Question 7

A company needs to track the cost of raw materials from the moment they are received until the finished goods are sold. Which costing method should they use to ensure that each unit's cost is individually tracked?

Accepted Answer

Specific identification. Specific identification tracks each unit individually. FIFO assumes first-in-first-out. Weighted average uses average cost. Standard cost uses predetermined cost.

Answer

FIFO (first in, first out)

Answer

Standard cost

Answer

Weighted average

Question 8

A distribution company uses Dynamics 365 Supply Chain Management. They want to automatically calculate transportation charges for outbound shipments based on weight and distance. Which module should they use?

Accepted Answer

Transportation management. Transportation management in Dynamics 365 Supply Chain Management is the module that handles carrier rate configuration, freight charge calculation, load planning, and route scheduling. It supports rate engines that compute charges based on weight, distance, zone, and other factors defined in rate masters and transit time engines.

Answer

Inventory management

Answer

Procurement and sourcing

Answer

Warehouse management

Question 9

A company wants to use Dynamics 365 Supply Chain Management to manage quality inspections for incoming raw materials. Which module should they configure?

Accepted Answer

Quality management. The Quality management module in Dynamics 365 Supply Chain Management is specifically designed to handle quality inspections, including those for incoming raw materials. It allows you to define quality orders, attach item sampling rules, and specify test instruments and failure actions, ensuring that raw materials meet required standards before they are accepted into inventory.

Answer

Production control

Answer

Warehouse management

Answer

Inventory management

Question 10

Which TWO actions should you take to configure Dynamics 365 Supply Chain Management to support a lean manufacturing environment?

Accepted Answer

Configure production flows and activities.. In Dynamics 365 Supply Chain Management, a lean manufacturing environment is modeled through production flows, which define the sequence of activities and the products or services produced, so option B (Configure production flows and activities) is correct because production flows are the foundational lean artifact that replaces traditional production orders. Option D (Set up kanban rules for material replenishment) is also correct because kanban rules drive the pull-based replenishment signals (for example, fixed-quantity, scheduled, or event kanbans) that keep lean work cells supplied without overproduction. Option A is incorrect because batch order creation is a process manufacturing capability, not a lean-specific configuration. Option C is incorrect because creating a production order for each manufacturing step is a push-based, discrete execution approach that contradicts lean principles and is not how lean is configured. Option E is incorrect because, although work cells are a lean concept, in Dynamics 365 they are represented through production flow activities and resources rather than a separate 'define work cells' configuration step.

Answer

Enable batch order creation for process manufacturing.

Answer

Create production orders for each manufacturing step.

Answer

Define work cells for lean production.

Question 11

Which THREE features are available in Dynamics 365 Supply Chain Management to improve warehouse efficiency?

Accepted Answer

Cluster picking. Cluster picking (B) is correct because it lets a single warehouse worker pick multiple orders simultaneously into separate containers, reducing travel time and increasing picking throughput in Dynamics 365 Supply Chain Management. Location directives (D) are correct because they define the rules that determine where items are put away, picked, or replenished, ensuring optimal and consistent warehouse movement strategies. Wave management (E) is correct because waves group picking and shipping work into coordinated units, enabling prioritized, batched, and staged outbound processing that improves labor and dock efficiency. Budget control (A) is a financial module feature for controlling expenditures against budgets, and supplier collaboration (C) supports procurement and vendor interaction; neither directly improves warehouse operational efficiency, so they are not among the three correct answers.

Answer

Budget control

Answer

Supplier collaboration

Question 12

Which TWO modules are part of Dynamics 365 Supply Chain Management?

Accepted Answer

Warehouse Management. Warehouse Management (A) is a core module within Dynamics 365 Supply Chain Management, handling inbound/outbound operations, work creation, wave and load planning, and mobile device-driven picking and put-away. Inventory Management (D) is also a native Supply Chain Management module, covering on-hand inventory tracking, item and warehouse dimensions, inventory transactions, reservations, and costing. Sales and Marketing (B) is not a Supply Chain Management module; it belongs to Dynamics 365 Sales (customer engagement). Human Resources (C) is a separate Dynamics 365 Human Resources application, not part of Supply Chain Management. Project Management and Accounting (E) is a module in Dynamics 365 Finance, not Supply Chain Management.

Answer

Sales and Marketing

Answer

Human Resources

Answer

Project Management and Accounting

Question 13

A manufacturing company uses Dynamics 365 Supply Chain Management. The production manager notices that raw material inventory levels frequently drop below the reorder point, causing production delays. Which feature should be configured to automatically suggest purchase orders based on demand and current inventory levels?

Accepted Answer

Master planning. Master planning in Dynamics 365 Supply Chain Management automatically calculates net requirements and suggests purchase orders based on demand, current inventory levels, and lead times. It considers reorder points, safety stock, and forecasted demand to generate planned orders. This directly addresses the issue of raw material inventory dropping below reorder points and causing production delays.

Answer

Landed cost

Answer

Warehouse management

Answer

Inventory Visibility

Question 14

A company uses Dynamics 365 Supply Chain Management and wants to track the environmental impact of their products, such as carbon footprint, across the supply chain. Which capability should they use?

Accepted Answer

Sustainability. The Sustainability capability in Dynamics 365 Supply Chain Management is specifically designed to track and manage environmental impact metrics such as carbon footprint across the supply chain. It provides tools to calculate, monitor, and report on emissions and other sustainability data tied to products and processes.

Answer

Demand planning

Answer

Product feedback

Answer

Asset management

Question 15

A distribution company uses Dynamics 365 Supply Chain Management and needs to set up a consignment inventory process where the supplier owns the inventory until it is consumed. Which inventory model should be used?

Accepted Answer

Consignment inventory. Consignment inventory is the specific inventory model in Dynamics 365 Supply Chain Management where the supplier retains ownership of goods stored at the customer's location until the customer actually consumes or draws them. Ownership transfers only at consumption, and the customer pays for what is used. This matches the described business requirement exactly.

Answer

Purchase order

Answer

Return order

Answer

Non-stocked product