MB-920 Describe Dynamics 365 Supply Chain Management Practice Test 28 — 15 Questions

Question 1

A company uses Dynamics 365 Supply Chain Management to manage procurement. They want to automate the creation of purchase orders for replenishing inventory when stock levels fall below a minimum threshold. They also want to consolidate multiple requisitions into a single purchase order. Which feature should they use?

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

Accepted Answer

Master planning. The scenario requires automatic creation of purchase orders when stock falls below a minimum, and consolidation of multiple requirements. Master planning is designed to generate planned orders based on coverage settings and can consolidate requirements into a single purchase order. Purchase requisitions and purchase orders do not provide this automation. Therefore, master planning is the correct answer.

Answer

Vendor collaboration

Answer

Purchase requisition

Answer

Purchase order

Question 2

A company uses Dynamics 365 Supply Chain Management to manage procurement. They want to automate the creation of purchase orders for replenishing inventory when stock levels fall below a minimum threshold. They also want to consolidate multiple requisitions into a single purchase order. Which feature should they use?

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

Accepted Answer

Work confirmation policies. Work confirmation policies are used to enforce validation during warehouse work execution, such as requiring workers to scan and confirm the item and location. This ensures that the correct item is picked from the correct location, reducing errors. The other options do not provide scan validation during picking.

Answer

Warehouse work policies

Answer

Inventory reservation hierarchy

Answer

Location directives

Question 3

A furniture manufacturer uses Dynamics 365 Supply Chain Management with warehouse management. They want outbound picking to use cluster picking so that a worker can pick items for multiple orders simultaneously into a single mobile device flow. Which workspace and process should the warehouse manager configure to enable cluster picking?

Accepted Answer

Warehouse management mobile device menu item with cluster picking mode. Cluster picking is a mobile device process, so the warehouse manager must create a mobile device menu item with the cluster picking mode and expose it on a menu. This allows a worker to pick for multiple orders in one flow. Work policies, location directives, and wave templates affect work creation and routing but do not themselves enable the cluster picking mobile experience.

Answer

Wave template with cluster picking step

Answer

Outbound picking work policy with cluster picking strategy

Answer

Location directive with cluster picking action

Question 4

A company uses Dynamics 365 Supply Chain Management to manage inventory. They want to use the Inventory turnover ratio to analyze how quickly inventory is sold and replenished. Which two factors are used to calculate this ratio? (Choose two.)

Accepted Answer

Cost of goods sold (COGS). The inventory turnover ratio is calculated as cost of goods sold divided by average inventory. COGS reflects the cost of products sold, while average inventory represents the average stock level over a period. These two factors together measure how efficiently inventory is managed. Other metrics like sales revenue or transaction counts are not used in this specific ratio.

Answer

Number of inventory transactions

Answer

Lead time for replenishment

Answer

Total sales revenue

Question 5

A manufacturer uses Dynamics 365 Supply Chain Management to plan production. Planners report that the system sometimes creates planned production orders for an item even though sufficient on-hand inventory exists at the same site. They want the master planning run to treat existing on-hand inventory as supply before generating new planned orders, while still allowing safety stock to be maintained. Which master planning setup should you configure?

Accepted Answer

Set the coverage code to Requirement and configure safety stock on the item coverage.. Requirement-based coverage is the standard master planning approach that nets existing on-hand inventory against gross requirements, so the planning engine only proposes new planned production orders for the net shortage. Adding safety stock to the item coverage keeps a minimum buffer. This combination prevents unnecessary planned orders while still honoring the manufacturer's inventory policy, which is exactly what the planners need.

Answer

Set the coverage code to Period and define a coverage period of one month.

Answer

Set the coverage code to Min/Max and define a maximum quantity for the item.

Answer

Set the coverage code to Manual and create planned orders only through the planning worksheet.

Question 6

A distribution company uses Dynamics 365 Supply Chain Management. They want to track the cost of goods sold for each sales order line and compare it with the revenue to analyze profitability. Which feature should they use?

Accepted Answer

Sales order > Line details > Cost and profit. Dynamics 365 Supply Chain Management provides order-line-level cost and profit analysis directly in the sales order line details. The 'Cost and profit' tab shows estimated and actual costs, revenue, and margin for each line, enabling profitability analysis without custom reports. Other features like inventory valuation or cost control workspace offer broader or different perspectives but not the specific per-line comparison needed here.

Answer

Inventory and warehouse management > Inventory transactions

Answer

Cost accounting > Cost control workspace

Answer

Inventory valuation report

Question 7

A company uses Dynamics 365 Supply Chain Management to manage procurement. They want to automate the creation of purchase orders for replenishing inventory when stock levels fall below a minimum threshold. They also want to consolidate multiple requisitions into a single purchase order. Which feature should they use?

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

Accepted Answer

Transportation management. The scenario requires load consolidation, route planning, and rating for outbound shipments. Transportation management provides these capabilities, including the ability to combine multiple sales orders into a single load and rate shipments using rate engines. Other modules like warehouse management, procurement, and inventory management do not offer these features. Therefore, transportation management is the correct answer.

Answer

Procurement and sourcing

Answer

Warehouse management only

Answer

Inventory management

Question 8

A company uses Dynamics 365 Supply Chain Management. They want to calculate the cost of goods sold for a produced item using a method that averages costs over a period. Which costing method should they use?

Accepted Answer

Weighted average. Weighted average costing averages the cost of inventory over a period, which aligns with the requirement to calculate cost of goods sold by averaging costs. It is a common method for produced items when cost fluctuations need to be smoothed. The other methods do not provide period averaging.

Answer

FIFO (First In, First Out)

Answer

LIFO (Last In, First Out)

Answer

Standard costing

Question 9

A specialty chemical producer uses Dynamics 365 Supply Chain Management. They need to plan production for a product that is measured in liters and has a formula with multiple ingredients that can vary slightly in concentration. Which production type should they use?

Accepted Answer

Process manufacturing. Process manufacturing is designed for formula-based production with units like liters and for handling variable concentrations through batch attributes. It supports co-products and by-products common in chemical manufacturing. Discrete, lean, and project approaches lack the formula and batch-attribute model needed for this scenario, so process manufacturing is the correct production type.

Answer

Lean manufacturing

Answer

Discrete manufacturing

Answer

Project manufacturing

Question 10

A distribution company uses Dynamics 365 Supply Chain Management to manage inventory across multiple warehouses. They want to track the cost of items using a method that recalculates the average cost each time a receipt is posted, so that inventory value reflects the most current purchase prices. Which inventory costing method should they use?

Accepted Answer

Moving average. Moving average is the inventory costing method that recalculates the item's average cost each time a receipt is posted, ensuring that inventory value reflects the latest purchase prices. This method is commonly used by distributors that want up-to-date cost information without the overhead of standard cost revaluation. It directly fulfills the requirement to track cost based on current receipts.

Answer

FIFO (First In, First Out)

Answer

Standard cost

Answer

LIFO (Last In, First Out)

Question 11

A company uses Dynamics 365 Supply Chain Management to manage procurement. They want to automate the creation of purchase orders for replenishing inventory when stock levels fall below a minimum threshold. They also want to consolidate multiple requisitions into a single purchase order. Which feature should they use?

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

Accepted Answer

Vendor-managed inventory (VMI). Vendor-managed inventory (VMI) in Dynamics 365 Supply Chain Management is designed for supplier-driven replenishment. Suppliers can monitor inventory levels and automatically create replenishment orders when stock hits minimum thresholds, up to maximum levels. This matches the scenario's requirement. Other features like vendor collaboration or consignment inventory do not provide this automated min/max replenishment capability.

Answer

Vendor collaboration

Answer

Purchase requisition

Answer

Consignment inventory

Question 12

A company uses Dynamics 365 Supply Chain Management to manage procurement. They want to automate the creation of purchase orders for replenishing inventory when stock levels fall below a minimum threshold. They also want to consolidate multiple requisitions into a single purchase order. Which feature should they use?

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

Accepted Answer

Set up reservation hierarchy and enable automatic reservation on the item model group.. Automatic reservation on the item model group ensures that inventory is reserved for sales orders as soon as they are created, preventing the same stock from being promised to multiple customers. The reservation hierarchy is also crucial because it defines the order in which inventory dimensions are reserved, such as site, warehouse, and location. This configuration is a standard practice in Dynamics 365 Supply Chain Management to manage inventory commitments effectively.

Answer

Enable available to promise (ATP) and set up ATP rules for the item.

Answer

Set up a picking policy that requires manual confirmation before releasing orders to the warehouse.

Answer

Configure a minimum inventory quantity for the item and enable safety stock.

Question 13

A company uses Dynamics 365 Supply Chain Management to manage procurement. They want to automate the creation of purchase orders for replenishing inventory when stock levels fall below a minimum threshold. They also want to consolidate multiple requisitions into a single purchase order. Which feature should they use?

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

Accepted Answer

Set the item's default order type to 'Purchase' and enable direct delivery on the sales order line.. For drop-shipment, the item must have a default order type of 'Purchase' so that demand generates a purchase order. Additionally, direct delivery must be enabled on the sales order line to instruct the system to create the purchase order directly from the vendor to the customer. This combination ensures the vendor ships directly to the customer without the company handling inventory.

Answer

Set the item's default order type to 'Production' and enable direct delivery.

Answer

Set the item's default order type to 'Transfer' and enable direct delivery.

Answer

Set the item's default order type to 'Kanban' and enable direct delivery.

Question 14

A company uses Dynamics 365 Supply Chain Management to manage procurement. They want to automate the creation of purchase orders for replenishing inventory when stock levels fall below a minimum threshold. They also want to consolidate multiple requisitions into a single purchase order. Which feature should they use?

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

Accepted Answer

Vendor evaluation. Vendor evaluation is the dedicated capability in Dynamics 365 Supply Chain Management for measuring vendor performance against criteria like on-time delivery and quality. It provides a structured scorecard and allows vendors to be categorized based on thresholds. This enables the company to systematically assess and manage vendor relationships using objective data.

Answer

Procurement and sourcing

Answer

Vendor groups

Answer

Vendor collaboration

Question 15

A global tool manufacturer uses Dynamics 365 Supply Chain Management with multiple legal entities for its North American and European operations. The company wants to transfer finished goods between the two legal entities using a single document that creates both the outbound shipment and the inbound receipt, while keeping intercompany pricing and settlement automatic. What should the company implement?

Accepted Answer

An intercompany sales order and the corresponding intercompany purchase order, generated through intercompany setup.. Intercompany functionality is designed for transactions between legal entities in the same organization. A sales order in the selling entity automatically creates a purchase order in the buying entity, with intercompany pricing, shipment, receipt, and settlement handled by the system, giving a single originating document for the transfer.

Answer

A consignment replenishment order with vendor-managed inventory at the European warehouse.

Answer

A purchase agreement with the European legal entity and a release order for each shipment.

Answer

A transfer order between warehouses in the two legal entities with automatic shipment and receipt posting.