MB-920 Practice Question: Describe the core capabilities of the finance and operations apps
This MB-920 practice question tests your understanding of describe the core capabilities of the finance and operations apps. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
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?
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
Option C is correct because 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.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
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.
Related concept
Read the scenario before looking for a memorised answer.
✗
Create a purchase agreement with the vendor
Why it's wrong here
Purchase agreements are for standard procurement, not VMI.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often 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.
Detailed technical explanation
How to think about this question
In Dynamics 365 Supply Chain Management, consignment inventory is managed through the 'Consignment' inventory model, where the vendor's stock is tracked in a separate 'Vendor-owned' inventory status until it is received into the customer's inventory via a consignment replenishment order. The system uses the 'Consignment replenishment' process to generate purchase orders that are owned by the vendor, and ownership transfer occurs only when the customer picks or consumes the stock. A real-world scenario is a hospital using VMI for surgical supplies, where the vendor monitors stock levels via the customer's system and automatically replenishes consignment stock without the hospital owning it until use.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
An e-commerce site experiences heavy traffic on Black Friday and near-zero traffic during off-peak weeks. Rather than provisioning permanent large VMs, the team uses auto-scaling groups that add capacity automatically under load and reduce it overnight. Questions like this test whether you understand elasticity, availability zones, and cloud compute scaling patterns.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Describe the core capabilities of the finance and operations apps — This question tests Describe the core capabilities of the finance and operations apps — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Set up consignment inventory for the vendor — Option C is correct because 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.
What should I do if I get this MB-920 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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