The answer is master planning. This feature in Dynamics 365 Supply Chain Management automates purchase order creation from sales orders by performing net requirements calculations that factor in existing inventory, lead times, and order quantities, then generating planned purchase orders to cover the demand. On the MB-920 exam, this tests your understanding of how master planning bridges supply and demand across the procurement cycle, often appearing in scenario-based questions where a company needs to automate replenishment based on sales forecasts or actual orders. A common trap is confusing master planning with production control or procurement modules, but remember that master planning is the engine that calculates what to buy or make, while other features execute those plans. Memory tip: think of master planning as the “brain” that sees sales demand and tells purchasing “what to order and when.”
MB-920 Describe Dynamics 365 Supply Chain Management Practice Question
This MB-920 practice question tests your understanding of describe dynamics 365 supply chain management. 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 automate the creation of purchase orders based on demand from sales orders. Which feature should they use?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Master planning
Master planning in Dynamics 365 Supply Chain Management uses demand from sales orders to generate planned purchase orders, ensuring inventory levels meet requirements. It performs net requirements calculations, considering existing stock, lead times, and order quantities, to automate procurement suggestions. This directly addresses the need to create purchase orders based on sales order demand.
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.
✗
Purchase requisition
Why it's wrong here
Purchase requisitions are internal requests, not automatically generated from sales demand.
✓
Master planning
Why this is correct
Master planning calculates net requirements and can generate planned purchase orders automatically.
Related concept
Read the scenario before looking for a memorised answer.
✗
Consignment inventory
Why it's wrong here
Consignment inventory is a replenishment model, not a planning feature.
✗
Vendor collaboration
Why it's wrong here
Vendor collaboration is for sharing information with suppliers, not generating purchase orders.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse purchase requisitions (a manual approval workflow) with master planning (an automated demand-driven engine), assuming any procurement-related feature can automate purchase order creation from sales orders.
Detailed technical explanation
How to think about this question
Master planning uses coverage groups and item coverage settings to define replenishment rules, such as minimum/maximum stock levels or time fences. It runs a batch job that explodes the bill of materials (BOM) for sales orders, calculates net requirements, and suggests planned orders that can be firmed into purchase orders. In a real-world scenario, a company with high seasonal demand can use master planning to automatically adjust purchase order quantities based on forecasted sales, preventing stockouts.
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
A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
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 Dynamics 365 Supply Chain Management — This question tests Describe Dynamics 365 Supply Chain Management — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Master planning — Master planning in Dynamics 365 Supply Chain Management uses demand from sales orders to generate planned purchase orders, ensuring inventory levels meet requirements. It performs net requirements calculations, considering existing stock, lead times, and order quantities, to automate procurement suggestions. This directly addresses the need to create purchase orders based on sales order demand.
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.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company uses Dynamics 365 Supply Chain Management and wants to automate the generation of purchase orders when inventory falls below a certain level. Which feature should they use?
hard
A.Set up safety stock levels for the items.
✓ B.Configure replenishment rules with minimum and maximum inventory levels.
C.Create a recurring purchase order manually.
D.Use item coverage with a reorder point.
Why B: Replenishment rules with minimum/maximum inventory levels can trigger purchase orders. Safety stock is a parameter, not an automation. Reorder point is a concept, but replenishment rules provide the automation.
Variation 2. A company uses Dynamics 365 Supply Chain Management and wants to automate the replenishment of items from a central warehouse to regional distribution centers based on real-time sales data. Which concept should they use?
hard
✓ A.Replenishment strategies (e.g., min/max)
B.Transfer orders
C.Bill of materials
D.Kanban signals
Why A: Option D is correct because cross-docking transfers goods from inbound to outbound with minimal storage, but for replenishment based on demand, they should use demand-driven replenishment (e.g., min/max or reorder point). However, the best match is D: replenishment strategies like reorder point or min-max. Option A is wrong because transfer orders are manual. Option B is wrong because bill of materials is for product structure. Option C is wrong because Kanban is for pull signals in production, not warehouse replenishment.
Variation 3. A company uses Dynamics 365 Supply Chain Management and wants to automate the generation of purchase orders from sales orders through direct delivery. Which setup is required?
hard
A.Set up demand forecasting
✓ B.Set up the item with a default order type of 'Direct delivery'
C.Set up an intercompany order
D.Set up a purchase agreement
Why B: Option A is correct because direct delivery requires setting up a 'Direct delivery' default order type on the item or customer to automatically create purchase orders from sales orders. Option B is wrong because intercompany order setup is for transactions between legal entities. Option C is wrong because purchase agreements are for long-term contracts. Option D is wrong because demand forecasting is for prediction, not automation.
Variation 4. A company uses Dynamics 365 Supply Chain Management and wants to automate the replenishment of items based on historical demand and predefined minimum stock levels. Which feature should they configure?
medium
✓ A.Replenishment rules
B.Safety stock journal
C.Forecast scheduling
D.Cycle counting
Why A: Replenishment rules in warehouse management allow automatic replenishment based on demand and min/max levels. Option C is correct. Option A (Safety stock journal) is for manual adjustments. Option B (Cycle counting) is for inventory accuracy. Option D (Forecast scheduling) is part of master planning but not specifically warehouse replenishment.
Variation 5. A distribution company needs to automate the generation of purchase orders when inventory levels fall below a predefined threshold. Which feature in Dynamics 365 Supply Chain Management should be configured?
easy
A.Inventory visibility
B.Vendor collaboration
✓ C.Replenishment rules
D.Batch balancing
Why C: Option B is correct because replenishment rules automatically generate purchase orders based on inventory levels. Option A is wrong because vendor collaboration is for communication, not automation. Option C is wrong because inventory visibility is a monitoring tool. Option D is wrong because batch balancing is for production.
Variation 6. A company uses Dynamics 365 Supply Chain Management and wants to automatically reorder stock when inventory falls below a defined level. Which functionality should be configured?
medium
A.Cycle counting
B.Inventory aging
✓ C.Reorder point
D.Safety stock
Why C: Option B is correct because Reorder point functionality triggers purchase orders when stock falls below a set level. Option A is wrong because Safety stock is a minimum buffer but does not automatically create orders. Option C is wrong because Cycle counting is for inventory accuracy. Option D is wrong because Inventory aging is for valuation, not replenishment.
Variation 7. A company wants to automatically create purchase orders when inventory for a specific item drops below a predefined level. Which master planning concept should be used?
medium
✓ A.Safety stock
B.Coverage group
C.Forecast model
D.Reorder point
Why A: Option B is correct because safety stock is a minimum inventory level that triggers replenishment; master planning can generate purchase orders when inventory falls below this level. Option A is wrong because reorder point is used in distribution requirements planning but not directly in master planning for automatic PO creation. Option C is wrong because a coverage group can include settings for min/max, but the specific concept is safety stock. Option D is wrong because the forecast model is for demand forecasting, not replenishment.
Last reviewed: Jun 24, 2026
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