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 with process manufacturing. They need to manage byproducts and co-products in a production order. Which functionality should they use?
Bill of materials (BOM)
Why wrong: BOM is for discrete manufacturing, not formula-based co-products.
Location directives
Why wrong: Location directives guide putaway, not production output.
Transfer orders
Why wrong: Transfer orders move inventory, not manage co-products.
Formula with co-products and by-products
Formulas in process manufacturing handle multiple outputs.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Formula with co-products and by-products
In process manufacturing, co-products and by-products are managed using a formula, not a bill of materials (BOM). The formula defines the production recipe, including the main output, co-products (intended secondary outputs), and by-products (unavoidable secondary outputs). This allows the system to automatically credit or cost these outputs during production order processing.
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 (BOM)
Why it's wrong here
BOM is for discrete manufacturing, not formula-based co-products.
Location directives
Why it's wrong here
Location directives guide putaway, not production output.
Transfer orders
Why it's wrong here
Transfer orders move inventory, not manage co-products.
Formula with co-products and by-products
Why this is correct
Formulas in process manufacturing handle multiple outputs.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
The trap here is that candidates confuse the Bill of Materials (BOM) used in discrete manufacturing with the Formula used in process manufacturing, not realizing that only formulas support co-products and by-products.
Trap categories for this question
Command / output trap
Location directives guide putaway, not production output.
Detailed technical explanation
In Dynamics 365 Supply Chain Management, a formula version can include multiple formula lines with line types such as 'Co-product' or 'By-product'. Co-products are planned and have a cost allocation method (e.g., weighted average or net realizable value), while by-products are typically costed at zero or a scrap value. The system uses the formula to automatically generate output transactions for each co-product and by-product when the production order is reported as finished.
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 Dynamics 365 Supply Chain Management — This question tests Describe Dynamics 365 Supply Chain Management — Read the scenario before looking for a memorised answer..
The correct answer is: Formula with co-products and by-products — In process manufacturing, co-products and by-products are managed using a formula, not a bill of materials (BOM). The formula defines the production recipe, including the main output, co-products (intended secondary outputs), and by-products (unavoidable secondary outputs). This allows the system to automatically credit or cost these outputs during production order processing.
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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