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MB-330 Implement Inventory and Asset Management Practice Question

A distribution company uses Dynamics 365 Supply Chain Management. They need to ensure that inventory is reserved for sales orders based on the nearest expiration date, but they also want to allow manual reservation override for specific customers. Which reservation strategy should they configure?

⚠ Common exam trap

Many candidates confuse FIFO with FEFO, assuming that first-in-first-out also considers expiration dates.

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

✓

FEFO (First Expired, First Out)

FEFO (First Expired, First Out) is the only strategy that automatically reserves inventory based on the nearest expiration date. It ensures that perishable items are shipped before they expire, reducing waste. Additionally, manual reservation override can be enabled, allowing specific customers to receive priority if needed, thus meeting both requirements.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✗

    Manual reservation only

    Why it's wrong here

    Manual reservation requires users to select inventory for each order, which is time-consuming and error-prone. It does not automatically prioritize by expiration date, so the system would not ensure that items closest to expiration are reserved. This fails to meet the need for an automated expiration-based strategy with override capability.

  • ✗

    FIFO (First In, First Out)

    Why it's wrong here

    FIFO reserves based on receipt date, not expiration date. This does not guarantee that items closest to expiration are reserved first, which could lead to expired stock. While manual override is possible, the core requirement for expiration-based reservation is not met, so FIFO is incorrect for this scenario.

  • ✓

    FEFO (First Expired, First Out)

    Why this is correct

    FEFO reserves inventory by earliest expiration date, which matches the requirement. It also allows manual reservation override if users have the appropriate permissions, so specific customers can be prioritized. This strategy ensures that perishable goods are shipped before they expire, reducing waste and complying with quality standards.

  • ✗

    LIFO (Last In, First Out)

    Why it's wrong here

    LIFO reserves the most recently received inventory first, which is the opposite of expiration-based reservation. This would cause older, potentially expired stock to remain in inventory. It does not satisfy the requirement to reserve based on nearest expiration date, making it unsuitable despite allowing manual overrides.

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JA

Written and reviewed by Johnson Ajibi, MSc IT Security

Senior Network & Security Engineer · founder of Courseiva

Last reviewed September 2026 · checked against the official Microsoft exam blueprint

This MB-330 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-330 exam.