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. They want to optimize inventory levels to reduce carrying costs while avoiding stockouts. They need a system that suggests replenishment quantities based on historical demand and lead times. Which feature should they use?
Bill of materials
Why wrong: Bill of materials is for product structure.
Inventory valuation
Why wrong: Inventory valuation tracks costs, not replenishment.
Master planning
Master planning uses historical demand and lead times to suggest replenishment quantities.
Procurement and sourcing
Why wrong: Procurement and sourcing handles purchasing but not planning.
Answer choices
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 historical demand data, lead times, and on-hand inventory to calculate replenishment suggestions. It generates planned orders that optimize inventory levels, reducing carrying costs while preventing stockouts through time-phased requirements planning.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Bill of materials
Why it's wrong here
Bill of materials is for product structure.
Inventory valuation
Why it's wrong here
Inventory valuation tracks costs, not replenishment.
Master planning
Why this is correct
Master planning uses historical demand and lead times to suggest replenishment quantities.
Related concept
Read the scenario before looking for a memorised answer.
Procurement and sourcing
Why it's wrong here
Procurement and sourcing handles purchasing but not planning.
Common exam traps
The trap here is that candidates confuse the operational function of procurement and sourcing with the planning function of master planning, assuming that purchasing activities inherently include demand-driven replenishment calculations.
Detailed technical explanation
Master planning uses a net requirements calculation that considers forecasted demand, existing inventory, safety stock, and lead times to generate planned purchase or production orders. It supports both MRP (Material Requirements Planning) for dependent demand and MPS (Master Production Scheduling) for independent demand, allowing planners to simulate scenarios and adjust parameters like coverage groups and time fences to fine-tune inventory optimization.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
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FAQ
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..
The correct answer is: Master planning — Master planning in Dynamics 365 Supply Chain Management uses historical demand data, lead times, and on-hand inventory to calculate replenishment suggestions. It generates planned orders that optimize inventory levels, reducing carrying costs while preventing stockouts through time-phased requirements planning.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
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