MB-920 Describe Dynamics 365 Supply Chain Management Practice Test 6 — 15 Questions

Question 1

A warehouse manager configures a location profile as shown. A mobile device user attempts to put away a pallet of item A into location BULK-001. The system rejects the putaway. What is the most likely reason?

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

Accepted Answer

The reservation hierarchy does not allow putaway to a bulk location.. The reservation hierarchy configured on the item or warehouse determines which dimensions (e.g., location, license plate) are reserved and in what order. If the hierarchy does not include the location dimension at the appropriate level, the system cannot reserve inventory in a bulk location, causing the putaway to be rejected. This is the most likely configuration cause given the scenario.

Answer

The location type 'Bulk' is not valid for putaway.

Answer

The default location is not set to BULK-001.

Answer

The warehouse management process is disabled.

Question 2

A company creates a product with the configuration shown. They produce 10 units of this item. How many units of raw material RM-001 are required?

Accepted Answer

20 units. The correct answer is B. 20 units, because the product configuration requires 2 units of raw material RM-001 per finished item, so producing 10 units requires 10 × 2 = 20 units of RM-001. Option A (40 units) would correspond to 4 units of RM-001 per item, which is not supported by the configuration. Option C (10 units) assumes a 1:1 ratio, which is incorrect for this bill of materials. Option D is wrong because it confuses the requirement with a one-to-one usage or mixes RM-001 and RM-002 rather than calculating RM-001 demand.

Answer

40 units

Answer

10 units

Answer

10 units for RM-001 and 10 for RM-002

Question 3

A distribution company uses Dynamics 365 Supply Chain Management and needs to optimize warehouse operations by grouping items that are frequently shipped together. Which warehouse concept should they apply?

Accepted Answer

Wave processing. Wave processing in Dynamics 365 Supply Chain Management is designed to group work orders (such as sales orders or transfer orders) into waves based on criteria like item, carrier, or destination. This allows warehouse managers to optimize picking by consolidating items that are frequently shipped together into a single wave, reducing travel time and improving efficiency. The key is that wave processing batches work at the wave level, enabling coordinated picking and staging. Thus, it directly addresses the need to group frequently co-shipped items.

Answer

Cross-docking

Answer

Cluster picking

Answer

Kanban

Question 4

Refer to the exhibit. A company uses demand forecasting with ARIMA method and a historical horizon of 12 months. What is the primary advantage of using ARIMA for forecasting?

Accepted Answer

It models trends and seasonality in time series data. ARIMA (AutoRegressive Integrated Moving Average) is a statistical time series forecasting method that models trends and seasonality in historical data. Option A is wrong because machine learning pattern recognition is not inherent to ARIMA; ARIMA is a statistical method, not a machine learning algorithm. Option B is wrong because ARIMA does not inherently allow real-time forecast updates; it relies on historical data and requires model refitting. Option D is wrong because ARIMA does not incorporate external factors like weather; it only uses the past values of the time series itself.

Answer

It uses machine learning for pattern recognition

Answer

It allows real-time forecast updates

Answer

It incorporates external factors like weather

Question 5

A manufacturing company uses Dynamics 365 Supply Chain Management. They want to optimize inventory levels by using a replenishment strategy that maintains a constant stock level based on forecast demand. Which replenishment method should they use?

Accepted Answer

Min/Max replenishment. Min/Max replenishment is a method that maintains inventory between a minimum and maximum level, where replenishment is triggered when stock falls to the minimum and orders are placed to bring it back to the maximum. This aligns with maintaining a constant stock level based on forecast demand. It is a standard replenishment strategy in Dynamics 365 Supply Chain Management.

Answer

Vendor-managed inventory

Answer

Economic Order Quantity (EOQ)

Answer

Kanban

Question 6

A manufacturer uses Dynamics 365 Supply Chain Management. They want to implement a production flow that supports lean manufacturing. Which THREE features should they consider?

Accepted Answer

Production flows. Production flows (A) are the core lean manufacturing model in Dynamics 365 Supply Chain Management, defining the sequence of activities, work cells, and process activities needed to produce a product in a lean environment. Activity-based costing (B) is relevant because lean production flows rely on cost accounting that traces costs to activities and value streams rather than traditional work orders, supporting accurate lean cost tracking. Kanban boards (D) are essential for lean execution, as they visualize and control material replenishment and production signals using kanban rules tied to production flows. Batch orders (C) are used for process manufacturing with formulas and batch-controlled items, not specifically for lean production flows. Discrete manufacturing (E) is a traditional production order-based method for discrete products, which is distinct from the lean, flow-based approach the manufacturer wants to implement.

Answer

Batch orders

Answer

Discrete manufacturing

Question 7

Refer to the exhibit. A production planner sees that a work center has a capacity of 480 minutes per day, but jobs are consistently late. They suspect the calendar is not accounting for breaks. What should they verify?

Accepted Answer

Verify that the calendar includes break times. If breaks are not in the calendar, effective capacity is lower; the planner should check if the calendar includes break hours. Option A is incorrect because efficiency is 100% but doesn't account for breaks. Option B is incorrect because scheduling direction affects sequencing, not capacity. Option D is incorrect because capacity minutes is set.

Answer

Reduce capacity to 420 minutes

Answer

Increase efficiency percentage

Answer

Change scheduling direction to backward

Question 8

A company uses Dynamics 365 Supply Chain Management and wants to track production costs in real time. Which feature should they use?

Accepted Answer

Production control. Production control in Dynamics 365 Supply Chain Management is the module that manages production orders, routes, bills of materials, and shop-floor execution, and it provides real-time visibility into production costs via job costing and cost estimates tied to active production orders. Cost accounting aggregates and analyzes costs after the fact but is not the real-time production tracking mechanism.

Answer

Cost accounting

Answer

Inventory management

Answer

Project management

Question 9

A company uses Dynamics 365 Supply Chain Management to manage inventory. They want to automatically reduce the quantity of a component when a finished product is reported as finished. Which feature should they use?

Accepted Answer

Production BOM explosion. Production BOM explosion is the feature that automatically calculates and reduces the quantity of component materials when a finished product is reported as finished. During production order estimation and reporting, the system explodes the production BOM to determine required components and then posts inventory transactions that consume those components from stock, reducing their on-hand quantity. This is the correct mechanism for automatic component reduction.

Answer

Purchase order approval

Answer

Production routes

Answer

Warehouse locations

Question 10

A company uses Dynamics 365 Supply Chain Management. They need to ensure that a specific item is always sourced from a preferred vendor, even if another vendor has a lower price. Which configuration should be used?

Accepted Answer

Purchase trade agreements. Purchase trade agreements allow you to define specific sourcing rules for items, including a preferred vendor relationship. This ensures that a particular item is always sourced from the designated vendor regardless of price. Option A (Vendor allocation rules) is used to distribute purchase quantities among multiple vendors, not to force a single preferred vendor. Option B (Product dimension groups) define product variants, not sourcing preferences. Option C (Inventory status codes) control inventory availability and transaction types, not vendor selection.

Answer

Vendor allocation rules

Answer

Product dimension groups

Answer

Inventory status codes

Question 11

Which THREE are valid item model groups used in Dynamics 365 Supply Chain Management?

Accepted Answer

LIFO. In Dynamics 365 Supply Chain Management, the valid inventory item model groups are FIFO (First In, First Out), LIFO (Last In, First Out), and Moving average, so options A, B, and C are correct because these are the actual costing methods supported for item model groups in the product information management module. FIFO (C) values inventory based on the assumption that the oldest items are issued first, LIFO (A) assumes the newest items are issued first, and Moving average (B) recalculates the average cost of an item each time inventory is received. Standard cost (D) is not an item model group; it is a separate costing method configured through a standard cost version and costing sheet, and Weighted average (E) is not a supported item model group in Dynamics 365 Supply Chain Management, as the closest supported average-based method is moving average.

Answer

Standard cost

Answer

Weighted average

Question 12

Which of the following are valid cost accounting methods in Dynamics 365 Supply Chain Management? (Select all that apply.)

Accepted Answer

Standard cost. In Dynamics 365 Supply Chain Management, the inventory costing methods supported for cost accounting include Standard cost (A), which uses predetermined costs for materials and labor and is suited for manufacturing environments with stable costs; LIFO (B), which values inventory based on the last items purchased being sold first; Moving average (C), which recalculates the item's average cost with each new receipt; Weighted average (D), which calculates a weighted average cost across inventory transactions; and FIFO (E), which values inventory based on the first items purchased being sold first. These five methods are all configurable through the item model group's costing method in the Inventory and warehouse management module. No other options were provided, so all listed options are valid cost accounting methods in the system.

Question 13

A company uses Dynamics 365 Supply Chain Management to manage its warehouse operations. They want to implement a strategy where workers are directed to pick items from specific locations based on the shortest travel distance. Which warehouse management feature should they use?

Accepted Answer

Wave execution. Wave execution optimizes the picking process by grouping multiple orders and directing workers to pick items from locations that minimize travel distance, often using shortest-path algorithms. Option A is incorrect because Mobile device menu items define what tasks workers see on their devices but do not inherently optimize travel distance. Option B is incorrect because Location directives determine the specific locations from which items should be picked, but they do not optimize travel distance across orders. Option C is incorrect because Work templates define the structure and steps of work, not the optimization of travel distance.

Answer

Mobile device menu items

Answer

Location directives

Answer

Work templates

Question 14

Which TWO actions should a supply chain manager take to set up vendor collaboration in Dynamics 365 Supply Chain Management?

Accepted Answer

Enable the vendor for collaboration in the vendor master record. Option C is correct because vendor collaboration requires enabling the vendor for collaboration on the vendor master record (the 'Collaboration activation' / 'Active for vendor collaboration' setting on the Vendor details page), which activates the vendor's access to the collaboration workspace and its purchase order, RFQ, and invoice capabilities. Option E is correct because vendor users must be provisioned as external contacts (contact person records of type 'External' linked to the vendor) so they can be invited and authenticated into the vendor collaboration workspace with the appropriate security role. Option A is not required because the vendor collaboration workspace is a standard feature of the Dynamics 365 Finance and Operations app and does not need a separate portal to be configured. Option B is not required because vendor users are created as external Microsoft Entra ID (Azure AD) B2B guest users in the same tenant, not in a separate tenant. Option D is not required because publishing a procurement catalog is a separate purchasing/catalog configuration task and is not a prerequisite for vendor collaboration.

Answer

Configure the vendor collaboration portal in the Dynamics 365 Finance and Operations app

Answer

Set up a separate Microsoft Entra ID tenant for vendors

Answer

Publish the procurement catalog to the vendor portal

Question 15

A company uses Dynamics 365 Supply Chain Management and wants to implement a strategy where products are stored at multiple warehouse locations, but picking is optimized by consolidating orders from the nearest location to the customer. Which configuration supports this?

Accepted Answer

Set up multi-site warehouse management and use location directives. Setting up multi-site warehouse management and using location directives allows products to be stored at multiple warehouse locations and optimizes picking by consolidating orders from the nearest location to the customer. Location directives define the strategies for picking and putaway, enabling efficient order fulfillment based on proximity.

Answer

Implement vendor-managed inventory for all products

Answer

Use transfer orders to move stock between warehouses

Answer

Configure a single warehouse with multiple zones