A company uses Dynamics 365 Supply Chain Management and the FIFO valuation method for inventory.
The company’s warehouse experienced a roof leak. The leak caused damage to items in the warehouse. Accounting must know the total cost of inventory that is damaged but does not want the damaged items removed from inventory until they have been inspected.
You need to meet the requirements of the accounting department.
Which two features should you use? Each correct answer presents part of the solution.
NOTE: Each correct selection is worth one point.
A. Stop item for inventory transactions
B. Movement journal
C. Order holds
D. Location profile
E. Inventory status
Show Answer
Correct Answer: B, E
Explanation: Inventory status allows the company to mark items as Damaged, isolating them for valuation and reporting while keeping them in inventory and preventing normal issue/use. A movement journal is then used to update the inventory status of the affected on-hand quantity, recording the change and preserving FIFO cost information without physically removing the items.
Question 93
DRAG DROP
-
Case study
-
This is a case study. Case studies are not timed separately. You can use as much exam time as you would like to complete each case. However, there may be additional case studies and sections on this exam. You must manage your time to ensure that you are able to complete all questions included on this exam in the time provided.
To answer the questions included in a case study, you will need to reference information that is provided in the case study. Case studies might contain exhibits and other resources that provide more information about the scenario that is described in the case study. Each question is independent of the other questions in this case study.
At the end of this case study, a review screen will appear. This screen allows you to review your answers and to make changes before you move to the next section of the exam. After you begin a new section, you cannot return to this section.
To start the case study
-
To display the first question in this case study, click the Next button. Use the buttons in the left pane to explore the content of the case study before you answer the questions. Clicking these buttons displays information such as business requirements, existing environment, and problem statements. If the case study has an All Information tab, note that the information displayed is identical to the information displayed on the subsequent tabs. When you are ready to answer a question, click the Question button to return to the question.
Background
-
Trey Research is a multinational manufacturer of health and dietary supplements based in Seattle, Washington. The company is experiencing a rapid expansion not only in its supplements but as a lifestyle brand that also sells apparel. The supplements and apparel businesses operate independently but manufacture and operate in the same legal entity.
Current environment
-
Current environment. Technology
Trey Research is migrating from an outdated, on-premises version of Dynamics AX to Dynamics 365 Supply Chain Management. The company wants to retain a lot of its current data structures and processes but adopt new efficiencies when the benefit is obvious. The company uses a third-party e-commerce site that is custom developed by an internal developer.
Current environment. Items
-
Product numbering
-
All items are numbered by using a smart numbering format: [Product SKU+Size+Color+Style]. For reporting, items are queried for sales and inventory reports by using the first six digits of the item number or until the first dash is encountered.
• A t-shirt could be 01001-S-Red for item 1001 in a size small with the color red.
• A single energy drink could be 02001-12oz or 02001-20oz for the different sizes that product 02001 is sold in.
Product attributes
-
• All clothing shares the same set of product attributes.
• Supplements may share the same Product SKU but can have different attributes for the different size, color, or style variations of the product.
• Product attributes that are unnecessary for an item should be excluded from the item.
Pricing
-
• All items always have a default price. This price will not expire.
• An item will have four different prices created for it every month, one for each customer tier, as detailed later in this section. The pricing expires at the end of the month. If no special pricing is created, the default item price will be used.
• The monthly sales price in which the additional price breaks are determined is based on the estimated cost of the manufactured items.
• Customers are categorized into four pricing tiers (A, B, C, and D) based on sales volume over the past 12 months.
• Customers can negotiate special pricing for items in 30-day, 60-day, and 90-day increments. Quantity restrictions may be placed, depending on the item discount and promotion.
• Promotional pricing is not used today. Pricing is restricted to monthly prices and customer-specific contract pricing.
Cost
-
Items use a FIFO costing model today in their current Dynamics AX 2009 environment; however, using the FIFO costing method has created problems.
Current environment. Warehouse and inventory
• Warehouse requirements are simplistic. There is only one site. The site has two warehouses.
• Trey Research needs to make sure that any energy drinks and nutritional supplements are manufactured and packaged with the highest standards. Trey Research automatically inspects products when all products are reported as finished. All products are inspected again when the items are picked.
• Energy drinks require independent tests to check for dents in packaging, carbonation levels, and fill level.
• Nutritional supplements require separate tests for packaging, expiration date, product seal, and product labeling.
• Government compliancy and consistency testing are handled outside of the Enterprise Resource Planning (ERP) system.
• Resalable products are placed on one of two racks in the warehouse.
Requirements
-
Requirements. Technology
-
• Trey Research will integrate all pricing and discount capabilities to its e-commerce website.
Requirements. Items
-
• Reporting on products should be streamlined as much as possible.
• The item numbering does not have to equate to the actual item number.
• The future costing methods adopted must be commonly accepted for manufacturers.
• Inventory costing should be done after a full inventory valuation is complete. It should take into consideration the direct materials, direct labor, and overhead that goes into an item.
• Any costing method used needs the ability to track cost records about an item, cost categories, and calculation formulas for indirect costs.
• The profitability for nutritional supplements manufacturing processes needs to be expressed in terms of the cost categories for routing operations and the calculation formulas for manufacturing overheads.
• If a vendor can no longer deliver the raw materials for the energy drinks due to supply chain issues, the costs for using an alternative vendor to source the raw materials should be used to determine the impact on profits.
• Apparel items will not be upgraded to the new costing method until after the go-live date due to resourcing and implementation limitations from the apparel team.
Requirements. Pricing
-
• Trey Research plans to do promotional pricing. Certain products will receive special pricing during the hours of extreme sporting events that Trey Research sponsors. Before or after the event, normal pricing will resume.
Requirements. White labeling
-
• Trey Research wants to start white labeling its products under the brands of major nutritional retail store brands. These products would only be sold to specific customers.
• Trey Research will provide and maintain a 'Compare to' price for customers to use to compare the white-labeled products. This Compare to price will also be the default item price for the customer if the customer accidentally lets a contract price expire.
• The configuration of these restrictions must be applied automatically when creating new products for those customers.
Requirements. Warehouse and inventory
• If products in the warehouse must be blocked from transactions for a specific reason, such as a health and safety review, warehouse users should be able to block the products quickly from the ERP system.
• All product quality tests should be processed in a uniform and consistent manner.
• Creation of any quality processes for products inbound to the warehouse, from the production line, or outbound from the warehouse to consumers should be automatically created to facilitate execution.
• Testing requirements:
◦ Requirement 1: 100 percent of all nutritional supplements and 50 percent of all energy drinks must be tested when production orders are completed. After a product is in testing, 100 percent of all tests must be completed.
◦ Requirement 2: 75 percent of all nutritional supplements and energy drinks should be tested against their required tests during an outbound process.
◦ Damaged products must be placed in one of four bins (based on product type) during the inspection process.
◦ You must define quarantine zones to optimize product visibility throughout the testing process.
You need to configure quality controls.
Which solution objects should you configure? To answer, drag the appropriate solution objects to the correct configurations. Each solution object may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content.
NOTE: Each correct selection is worth one point.
Show Answer
Correct Answer: Configure the system for testing requirement 1:
Test groups
Specify the items for testing requirement 2:
Quality groups
Explanation: Test groups define the specific quality tests and sampling rules needed to meet testing requirement 1. Quality groups are used to group and assign items that must undergo testing, which fulfills the need to specify which items are included in testing requirement 2.
Question 94
Case study -
This is a case study. Case studies are not timed separately. You can use as much exam time as you would like to complete each case. However, there may be additional case studies and sections on this exam. You must manage your time to ensure that you are able to complete all questions included on this exam in the time provided.
To answer the questions included in a case study, you will need to reference information that is provided in the case study. Case studies might contain exhibits and other resources that provide more information about the scenario that is described in the case study. Each question is independent of the other questions in this case study.
At the end of this case study, a review screen will appear. This screen allows you to review your answers and to make changes before you move to the next section of the exam. After you begin a new section, you cannot return to this section.
To start the case study -
To display the first question in this case study, click the Next button. Use the buttons in the left pane to explore the content of the case study before you answer the questions. Clicking these buttons displays information such as business requirements, existing environment, and problem statements. If the case study has an All Information tab, note that the information displayed is identical to the information displayed on the subsequent tabs. When you are ready to answer a question, click the Question button to return to the question.
Background -
Trey Research is a multinational manufacturer of health and dietary supplements based in Seattle, Washington. The company is experiencing a rapid expansion not only in its supplements but as a lifestyle brand that also sells apparel. The supplements and apparel businesses operate independently but manufacture and operate in the same legal entity.
Current environment -
Current environment. Technology -
Trey Research is migrating from an outdated, on-premises version of Dynamics AX to Dynamics 365 Supply Chain Management. The company wants to retain a lot of its current data structures and processes but adopt new efficiencies when the benefit is obvious. The company uses a third-party e-commerce site that is custom developed by an internal developer.
Current environment. Items -
Product numbering -
All items are numbered by using a smart numbering format: [Product SKU+Size+Color+Style]. For reporting, items are queried for sales and inventory reports by using the first six digits of the item number or until the first dash is encountered.
• A t-shirt could be 01001-S-Red for item 1001 in a size small with the color red.
• A single energy drink could be 02001-12oz or 02001-20oz for the different sizes that product 02001 is sold in.
Product attributes -
• All clothing shares the same set of product attributes.
• Supplements may share the same Product SKU but can have different attributes for the different size, color, or style variations of the product.
• Product attributes that are unnecessary for an item should be excluded from the item.
Pricing -
• All items always have a default price. This price will not expire.
• An item will have four different prices created for it every month, one for each customer tier, as detailed later in this section. The pricing expires at the end of the month. If no special pricing is created, the default item price will be used.
• The monthly sales price in which the additional price breaks are determined is based on the estimated cost of the manufactured items.
• Customers are categorized into four pricing tiers (A, B, C, and D) based on sales volume over the past 12 months.
• Customers can negotiate special pricing for items in 30-day, 60-day, and 90-day increments. Quantity restrictions may be placed, depending on the item discount and promotion.
• Promotional pricing is not used today. Pricing is restricted to monthly prices and customer-specific contract pricing.
Cost -
Items use a FIFO costing model today in their current Dynamics AX 2009 environment; however, using the FIFO costing method has created problems.
Current environment. Warehouse and inventory
• Warehouse requirements are simplistic. There is only one site. The site has two warehouses.
• Trey Research needs to make sure that any energy drinks and nutritional supplements are manufactured and packaged with the highest standards. Trey Research automatically inspects products when all products are reported as finished. All products are inspected again when the items are picked.
• Energy drinks require independent tests to check for dents in packaging, carbonation levels, and fill level.
• Nutritional supplements require separate tests for packaging, expiration date, product seal, and product labeling.
• Government compliancy and consistency testing are handled outside of the Enterprise Resource Planning (ERP) system.
• Resalable products are placed on one of two racks in the warehouse.
Requirements -
Requirements. Technology -
• Trey Research will integrate all pricing and discount capabilities to its e-commerce website.
Requirements. Items -
• Reporting on products should be streamlined as much as possible.
• The item numbering does not have to equate to the actual item number.
• The future costing methods adopted must be commonly accepted for manufacturers.
• Inventory costing should be done after a full inventory valuation is complete. It should take into consideration the direct materials, direct labor, and overhead that goes into an item.
• Any costing method used needs the ability to track cost records about an item, cost categories, and calculation formulas for indirect costs.
• The profitability for nutritional supplements manufacturing processes needs to be expressed in terms of the cost categories for routing operations and the calculation formulas for manufacturing overheads.
• If a vendor can no longer deliver the raw materials for the energy drinks due to supply chain issues, the costs for using an alternative vendor to source the raw materials should be used to determine the impact on profits.
• Apparel items will not be upgraded to the new costing method until after the go-live date due to resourcing and implementation limitations from the apparel team.
Requirements. Pricing -
• Trey Research plans to do promotional pricing. Certain products will receive special pricing during the hours of extreme sporting events that Trey Research sponsors. Before or after the event, normal pricing will resume.
Requirements. White labeling -
• Trey Research wants to start white labeling its products under the brands of major nutritional retail store brands. These products would only be sold to specific customers.
• Trey Research will provide and maintain a 'Compare to' price for customers to use to compare the white-labeled products. This Compare to price will also be the default item price for the customer if the customer accidentally lets a contract price expire.
• The configuration of these restrictions must be applied automatically when creating new products for those customers.
Requirements. Warehouse and inventory
• If products in the warehouse must be blocked from transactions for a specific reason, such as a health and safety review, warehouse users should be able to block the products quickly from the ERP system.
• All product quality tests should be processed in a uniform and consistent manner.
• Creation of any quality processes for products inbound to the warehouse, from the production line, or outbound from the warehouse to consumers should be automatically created to facilitate execution.
• Testing requirements:
◦ Requirement 1: 100 percent of all nutritional supplements and 50 percent of all energy drinks must be tested when production orders are completed. After a product is in testing, 100 percent of all tests must be completed.
◦ Requirement 2: 75 percent of all nutritional supplements and energy drinks should be tested against their required tests during an outbound process.
◦ Damaged products must be placed in one of four bins (based on product type) during the inspection process.
◦ You must define quarantine zones to optimize product visibility throughout the testing process.
You need to define the number of quarantine zones.
How many should you define?
A. 1
B. 2
C. 4
D. 6
E. 8
Show Answer
Correct Answer: C
Explanation: Quarantine zones are needed to manage visibility and processing during quality inspections. The requirements distinguish by product type (nutritional supplements vs. energy drinks) and by process stage (production completion/inbound testing vs. outbound testing). That results in 2 product types × 2 processes = 4 quarantine zones. The four damaged bins are storage/bin locations within the process and do not require additional quarantine zones.
Question 95
A company with two legal entities uses Dynamics 365 Supply Chain Management. You are creating new products and learn that CompanyA plans to use Warehouse management (WMS) but CompanyB will not.
Each storage, tracking, and production dimension name and configuration must be identical in each company.
You need to set up the dimensions that affect the WMS for the new products.
Which two actions should you perform? Each correct answer presents a complete solution.
NOTE: Each correct selection is worth one point.
A. Assign a tracking group to the product and release it to both companies, changing one tracking group after release.
B. Leave storage group blank on the product and assign after release to both companies.
C. Assign storage group to the product and release to both companies, changing one after release.
D. Create a product master and assign configuration technology.
Show Answer
Correct Answer: B, D
Explanation: In Dynamics 365 SCM, storage, tracking, and production dimension groups are shared metadata and must have identical names and configurations across legal entities. Only CompanyA will use WMS, so WMS‑relevant dimensions (especially storage dimensions like location) must be assigned carefully.
Leaving the storage dimension group blank on the product before release allows you to assign the appropriate storage dimension group per legal entity during release, ensuring CompanyA gets a WMS‑enabled group while CompanyB does not (B).
Creating a product master with a configuration technology is required to properly manage production dimensions and ensure consistency of dimension definitions across companies (D).
Options A and C are incorrect because changing dimension groups after product release is either restricted or leads to inconsistencies across legal entities.
Question 96
DRAG DROP
-
This is a case study. Case studies are not timed separately. You can use as much exam time as you would like to complete each case. However, there may be additional case studies and sections on this exam. You must manage your time to ensure that you are able to complete all questions included on this exam in the time provided.
To answer the questions included in a case study, you will need to reference information that is provided in the case study. Case studies might contain exhibits and other resources that provide more information about the scenario that is described in the case study. Each question is independent of the other questions in this case study.
At the end of this case study, a review screen will appear. This screen allows you to review your answers and to make changes before you move to the next section of the exam. After you begin a new section, you cannot return to this section.
To start the case study
-
To display the first question in this case study, click the Next button. Use the buttons in the left pane to explore the content of the case study before you answer the questions. Clicking these buttons displays information such as business requirements, existing environment, and problem statements. If the case study has an All Information tab, note that the information displayed is identical to the information displayed on the subsequent tabs. When you are ready to answer a question, click the Question button to return to the question.
Background
-
Coho Vineyard & Winery is a parent company that has two subsidiaries: Coho Vineyard and Coho Winery. Coho Vineyard is based in Medford, Oregon. The vineyard grows the grapes and then produces and bottles the wine. Coho Winery, based in Grants Pass, Oregon, distributes packaged wine to businesses and consumers. The winery sells imported cheese and olive oil in addition to the wines.
Current environment. Technology landscape
• Coho Vineyard & Winery requires financial reporting from both Coho Vineyard and Coho Winery. The parent company consolidates financials in a third-party tool.
• Coho Winery currently manages inventory and financials on spreadsheets separately from the parent company.
Current environment. Inventory and warehousing
• The entire warehouse is temperature controlled. A refrigerated section of the warehouse is used for items that require colder storage.
• The items do not have fixed locations in the warehouse.
• Coho uses smart numbering for cheese items today. The items start with F for France and U for United States such as the following:
• F11234 = French cheese
• U14567 = US cheese
• Currently, wine does not use smart numbering.
• Inventory is valued at First In, First-Out (FIFO).
• Olive oil has a 12-month shelf life.
• WineA is expensive and not regularly stocked in the warehouse.
• WineB must be in the refrigerated section of the warehouse.
• WineC is non-refrigerated wine and is the majority of inventory in the warehouse.
Current environment. Vendors and procurement
• Cheese is purchased from vendors in two countries: France and United States.
• Non-cheese items can be purchased from vendors in other countries or regions.
• Olive oil is bought and sold in full cases of six each.
• When Coho Vineyard produces more wine than expected in a season, rebate programs are offered to any company whose monthly purchases exceed $5,000.
Requirements. General
-
• The Coho Vineyard & Winery parent company, as well as Coho Vineyard, will not be considered in the implementation of Dynamics 365 Finance and Dynamics 365 Supply Chain Management for Coho Winery. They plan to implement them as separate legal entities in the next five years.
Requirements. Inventory and warehousing
• Items must be renumbered in the new system.
• Separate item numbers must be used for each imported item for use in simplified reporting by source country or region.
• Advanced Warehouse Management capabilities must be enabled in the new system.
• Each bottle of wine has a single item number.
• The vintage of each bottle will change annually and may affect the cost of the bottle. This cost must be tracked by year.
• Some bottles of wine require refrigeration. The system must automatically define where items must be stored in the warehouse.
• Wine must be grouped in a hierarchy such as the following:
• Red
• Cabernet
• Merlot
• White
• Chardonnay
• Pinot
• Inventory value must be stored at each month end.
• Each month, the olive oil on-hand inventory is evaluated. Anything with less than six months left on the shelf life is sold to a discount retail store. If less than 90 days remains for the shelf life, then the olive oil is donated or destroyed.
• At least 20 cases of olive oil and no more than 50 cases are on hand and not reserved for upcoming customer orders.
• WineB must be refrigerated.
Requirements. Vendors and procurement
• The cheese smart numbering system will not be used in the future. Instead, the system must use standard configurations to ensure the correct cheese items are used for the correct country or region when ordering.
• Olive oil must be managed in full cases only, although the inventory cost must be calculated as cages.
• Should any bottle of olive oil be broken within a case, the cases will be sold at a discounted price.
• Vendor rebates must be calculated and submitted for a claim.
• Rebate programs are passed on to the retailers selling Coho Winery wines. The rebates must be claimed from Coho Vineyard.
• Purchase orders (POs) must be maintained online with tracked changes between the vendors and the buyers.
• The controller decides WineA must not be held in financial inventory on the Coho Winery books. The winery makes an agreement with the vendor that WineA will be owned by the vendor until a later date.
• Vendor1 sends bulk shipments. Coho Winery does not always have enough warehouse staff to receive inventory. The company requires Vendor1 to send advanced shipping notices (ASNs).
• The operations coordinator must schedule inbound loads. The company requires automation of inbound load creation where possible.
Issues
-
• The warehouse is at maximum capacity. Empty bin locations are not always available.
• The warehouse manager wants to establish fast moving locations for WineB on the floor and refill locations from higher rack storage.
• Coho Winery recently conducted an internal audit risk assessment. The risk assessment found that inventory value reports were stored in spreadsheets. The spreadsheets can easily be edited and lack controls.
• After olive oil is counted, multiple cases are destroyed due to shelf life. The inventory planner must determine if a new PO should be placed for olive oil.
• The vendor rebates claims are often rejected because the claims were miscalculated by not including discounts.
• The purchasing manager receives multiple complaints regarding POs:
• Issue 1: PO changes are not accepted and confirmed, resulting in out-of-stock issues.
• Issue 2: Vendors do not have control on responses to POs. Instead, the vendors rely on emails.
You need to enable the system to correctly calculate vendor claims.
Which configurations should you use for the rebates? To answer, move the appropriate configurations to the correct requirements. You may use each configuration once, more than once, or not at all. You may need to move the split bar between panes or scroll to view content.
NOTE: Each correct selection is worth one point.
Show Answer
Correct Answer: Rebate line break type: Amount
Taken from: Net
Explanation: Rebates are triggered when monthly purchases exceed a monetary threshold, so the break type is Amount. Claims were rejected because discounts weren’t included, so the rebate must be calculated from the Net price (after discounts), not Gross.
Question 97
DRAG DROP
-
A company is implementing Dynamics 365 Supply Chain Management. The company has vendor agreements with domestic and international companies.
A production controller requires the ability to process the goods in transit to the company from international vendors. Charges and costs require the following setup:
• applied to domestic and international inbound shipments
• separate purchase orders
The company will not create inbound loads automatically.
You need to determine which module to configure to meet the requirement for inbound shipments.
Which module should you use? To answer, drag the appropriate modules to the correct requirements. Each module may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content.
NOTE: Each correct selection is worth one point.
Show Answer
Correct Answer: Process international goods in transit:
Landed cost only
Apply charges and costs to inbound shipments:
Both
Explanation: Landed cost is designed to manage goods in transit, which is typically required for international inbound shipments. Charges and costs on inbound shipments can be applied using Landed cost (for inbound and international scenarios) and Transportation management (for inbound freight and charges), so both modules can be used.
Question 98
DRAG DROP
-
Accompany uses Dynamics 365 Supply Chain Management to manage procurement operations.
The company plans to source some product lines from offshore vendors. The company wants to use the landed cost module feature for the shipment tracking and item costing.
You need to configure the landed cost functionality.
What should you configure for each requirement? To answer, drag the appropriate components to the correct requirements. Each component may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content.
NOTE: Each correct selection is worth one point.
Show Answer
Correct Answer: Folio
Purchase order
Explanation: A folio represents a consolidated shipment used to calculate and optimize carrier capacity (weight and volume) for unit shipping costs. The purchase order defines commercial terms such as freight responsibility, identifying who pays freight differences.
Question 99
A company uses Dynamics 365 Supply Chain Management. The company acquired a multinational food packaging business that has 30 facilities operating in multiple countries/regions.
Packaging machines must be systematically registered and tracked across all facilities.
You need to create the packing machine assets to meet the tracking requirements.
What should you create?
A. functional location type
B. functional location lifecycle state
C. functional location
D. functional location lifecycle model
Show Answer
Correct Answer: C
Explanation: In Dynamics 365 Supply Chain Management Asset Management, individual physical assets such as packaging machines are registered and tracked by creating functional locations. A functional location represents a physical place or asset structure where equipment is installed and tracked across facilities. The other options define metadata (types, lifecycle states, or lifecycle models) rather than creating the actual assets to be tracked.
Question 100
A warehouse picks and ships product.
The warehouse completes work immediately upon automatic release to the warehouse.
You need to configure waves to allow for automatic work creation.
What should you do?
A. Select the wave template and attribute to automatically process.
B. Select the wave template and assign it to recurring batch job.
C. Automate wave creation and process the wave at release to warehouse.
D. Select the wave template and process the wave at release to warehouse.
Show Answer
Correct Answer: C
Explanation: To have work created immediately when orders are released to the warehouse, wave creation and wave processing must both be automated at release. This ensures that as soon as the release occurs, a wave is automatically created and processed, which generates the picking and shipping work without manual intervention.
Question 101
DRAG DROP
-
Case study
-
This is a case study. Case studies are not timed separately. You can use as much exam time as you would like to complete each case. However, there may be additional case studies and sections on this exam. You must manage your time to ensure that you are able to complete all questions included on this exam in the time provided.
To answer the questions included in a case study, you will need to reference information that is provided in the case study. Case studies might contain exhibits and other resources that provide more information about the scenario that is described in the case study. Each question is independent of the other questions in this case study.
At the end of this case study, a review screen will appear. This screen allows you to review your answers and to make changes before you move to the next section of the exam. After you begin a new section, you cannot return to this section.
To start the case study
-
To display the first question in this case study, click the Next button. Use the buttons in the left pane to explore the content of the case study before you answer the questions. Clicking these buttons displays information such as business requirements, existing environment, and problem statements. If the case study has an All Information tab, note that the information displayed is identical to the information displayed on the subsequent tabs. When you are ready to answer a question, click the Question button to return to the question.
Background
-
Trey Research is a multinational manufacturer of health and dietary supplements based in Seattle, Washington. The company is experiencing a rapid expansion not only in its supplements but as a lifestyle brand that also sells apparel. The supplements and apparel businesses operate independently but manufacture and operate in the same legal entity.
Current environment
-
Current environment. Technology
Trey Research is migrating from an outdated, on-premises version of Dynamics AX to Dynamics 365 Supply Chain Management. The company wants to retain a lot of its current data structures and processes but adopt new efficiencies when the benefit is obvious. The company uses a third-party e-commerce site that is custom developed by an internal developer.
Current environment. Items
-
Product numbering
-
All items are numbered by using a smart numbering format: [Product SKU+Size+Color+Style]. For reporting, items are queried for sales and inventory reports by using the first six digits of the item number or until the first dash is encountered.
• A t-shirt could be 01001-S-Red for item 1001 in a size small with the color red.
• A single energy drink could be 02001-12oz or 02001-20oz for the different sizes that product 02001 is sold in.
Product attributes
-
• All clothing shares the same set of product attributes.
• Supplements may share the same Product SKU but can have different attributes for the different size, color, or style variations of the product.
• Product attributes that are unnecessary for an item should be excluded from the item.
Pricing
-
• All items always have a default price. This price will not expire.
• An item will have four different prices created for it every month, one for each customer tier, as detailed later in this section. The pricing expires at the end of the month. If no special pricing is created, the default item price will be used.
• The monthly sales price in which the additional price breaks are determined is based on the estimated cost of the manufactured items.
• Customers are categorized into four pricing tiers (A, B, C, and D) based on sales volume over the past 12 months.
• Customers can negotiate special pricing for items in 30-day, 60-day, and 90-day increments. Quantity restrictions may be placed, depending on the item discount and promotion.
• Promotional pricing is not used today. Pricing is restricted to monthly prices and customer-specific contract pricing.
Cost
-
Items use a FIFO costing model today in their current Dynamics AX 2009 environment; however, using the FIFO costing method has created problems.
Current environment. Warehouse and inventory
• Warehouse requirements are simplistic. There is only one site. The site has two warehouses.
• Trey Research needs to make sure that any energy drinks and nutritional supplements are manufactured and packaged with the highest standards. Trey Research automatically inspects products when all products are reported as finished. All products are inspected again when the items are picked.
• Energy drinks require independent tests to check for dents in packaging, carbonation levels, and fill level.
• Nutritional supplements require separate tests for packaging, expiration date, product seal, and product labeling.
• Government compliancy and consistency testing are handled outside of the Enterprise Resource Planning (ERP) system.
• Resalable products are placed on one of two racks in the warehouse.
Requirements
-
Requirements. Technology
-
• Trey Research will integrate all pricing and discount capabilities to its e-commerce website.
Requirements. Items
-
• Reporting on products should be streamlined as much as possible.
• The item numbering does not have to equate to the actual item number.
• The future costing methods adopted must be commonly accepted for manufacturers.
• Inventory costing should be done after a full inventory valuation is complete. It should take into consideration the direct materials, direct labor, and overhead that goes into an item.
• Any costing method used needs the ability to track cost records about an item, cost categories, and calculation formulas for indirect costs.
• The profitability for nutritional supplements manufacturing processes needs to be expressed in terms of the cost categories for routing operations and the calculation formulas for manufacturing overheads.
• If a vendor can no longer deliver the raw materials for the energy drinks due to supply chain issues, the costs for using an alternative vendor to source the raw materials should be used to determine the impact on profits.
• Apparel items will not be upgraded to the new costing method until after the go-live date due to resourcing and implementation limitations from the apparel team.
Requirements. Pricing
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• Trey Research plans to do promotional pricing. Certain products will receive special pricing during the hours of extreme sporting events that Trey Research sponsors. Before or after the event, normal pricing will resume.
Requirements. White labeling
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• Trey Research wants to start white labeling its products under the brands of major nutritional retail store brands. These products would only be sold to specific customers.
• Trey Research will provide and maintain a 'Compare to' price for customers to use to compare the white-labeled products. This Compare to price will also be the default item price for the customer if the customer accidentally lets a contract price expire.
• The configuration of these restrictions must be applied automatically when creating new products for those customers.
Requirements. Warehouse and inventory
• If products in the warehouse must be blocked from transactions for a specific reason, such as a health and safety review, warehouse users should be able to block the products quickly from the ERP system.
• All product quality tests should be processed in a uniform and consistent manner.
• Creation of any quality processes for products inbound to the warehouse, from the production line, or outbound from the warehouse to consumers should be automatically created to facilitate execution.
• Testing requirements:
◦ Requirement 1: 100 percent of all nutritional supplements and 50 percent of all energy drinks must be tested when production orders are completed. After a product is in testing, 100 percent of all tests must be completed.
◦ Requirement 2: 75 percent of all nutritional supplements and energy drinks should be tested against their required tests during an outbound process.
◦ Damaged products must be placed in one of four bins (based on product type) during the inspection process.
◦ You must define quarantine zones to optimize product visibility throughout the testing process.
You need to configure the system for the new products that the company produces.
Which product type should you use? To answer, drag the appropriate product types to the correct products. Each product type may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content.
NOTE: Each correct selection is worth one point.
Explanation: Clothing uses a shared set of attributes and does not require size/color-driven variants at the system level, so it can be created as a Product. Energy drinks share a common SKU with size-based differences (e.g., 12oz, 20oz), which fits a product master with Product variants for each size.
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