Describe the core capabilities of the finance and operations apps →hardMultiple ChoiceObjective-mapped
MB-920 Practice Question: Describe the core capabilities of the finance and operations apps
A company uses Dynamics 365 Supply Chain Management and wants to implement a vendor-managed inventory (VMI) process where vendors monitor and replenish stock at the customer's warehouse. What is the recommended setup?
⚠ Common exam trap
A common mix-up: candidates confuse a standard purchase agreement with the consignment agreement required for VMI, assuming any contract with a vendor enables vendor-managed inventory, but only consignment inventory setup correctly reflects vendor ownership and replenishment control.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Set up consignment inventory for the vendor
Vendor-managed inventory (VMI) in Dynamics 365 Supply Chain Management is implemented using consignment inventory. In a consignment setup, the vendor owns the stock until it is consumed or transferred to the customer's inventory, which aligns with the VMI process where the vendor monitors and replenishes stock at the customer's warehouse. The system supports this through consignment replenishment orders and vendor-owned inventory tracking.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Configure warehouse management for the vendor
Why it's wrong here
Warehouse management is for internal operations, not VMI.
- ✗
Enable quality management for received items
Why it's wrong here
Quality management is not related to VMI.
- ✓
Set up consignment inventory for the vendor
Why this is correct
Consignment inventory allows vendors to own stock until it is consumed, enabling VMI.
- ✗
Create a purchase agreement with the vendor
Why it's wrong here
Purchase agreements are for standard procurement, not VMI.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This MB-920 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MB-920 exam.