Microsoft

MB-700 Free Practice Questions — Page 12

Question 110

A third-party logistics company is implementing Dynamics 365 Finance and Dynamics 365 Supply Chain Management. The company values inventory using the first in, first out (FIFO) costing method. Customer consignment inventory is held in the warehouse. The same inventory item number may also be owned by the company. You need to define a solution for segregating customer-consigned inventory.

A. Implement service type items.
B. Implement inventory status.
C. Implement vendor consignment inventory.
D. Create a separate warehouse location.
E. Create a virtual site and warehouse.
Show Answer
Correct Answer: E
Explanation:
Customer‑consigned inventory must be segregated by ownership while allowing the same item number and FIFO valuation. Creating a virtual site and warehouse logically separates ownership and inventory value from company‑owned stock without duplicating items or relying on physical locations, ensuring accurate costing, tracking, and reporting.

Question 111

DRAG DROP - A company is planning to implement Dynamics 365 Finance and Dynamics 365 Supply Chain Management. The company is set up with the following: • The parent company reports sales in US dollars (USD). • The two partially owned subsidiaries perform transactions in euros (EUR). • The two fully owned subsidiaries perform transactions in USD. • Each subsidiary has three business units for product development, strategic planning, and sales operations. • There are two distribution centers in the US. Each center has a primary warehouse and a quarantine warehouse. You need to configure the organizational structures for the company. How should you configure the organizational structures? To answer, move the appropriate configurations to the correct organizational structures. You may use each configuration 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.

Illustration for MB-700 question 111
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Correct Answer: Business units: Financial dimension Partially owned subsidiary: Consolidation company
Explanation:
Business units are best modeled as financial dimensions to enable reporting across product development, strategy, and sales without creating separate entities. Partially owned subsidiaries should be included through a consolidation company to support ownership-based financial consolidation and reporting.

Question 112

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 - Blue Yonder Airlines is a private airline company established in 1963 in Boston. The company completes over 2,000 flights a day with flights operating exclusively in North America. Blue Yonder Airlines is in the planning phase for replacing its current enterprise resource planning (ERP) with Dynamics 365 Finance, Supply Chain Management, and Commerce and is making solution architecture decisions prior to engaging the remainder of the implementation team. Current environment - Technology - • Blue Yonder Airlines operates on a custom-built ERP solution. • Blue Yonder Airlines uses a proprietary reporting and analytics platform that reports on data between multiple systems, including the ERP solution. • The ERP solution automatically pushes transactional data every five minutes to a separate database that the reporting and analytics platform uses for sales and operations planning (S&OP) activities. • SQL Server Reporting Services (SSRS) reports are used for several financial reports that are sent to vendors in the existing ERP solution. • Users utilize a third-party tool that selects alternate layouts of the reports depending on the users' requirements. • Blue Yonder Airlines currently uses Microsoft 365 and Office 365. Implementation - • The implementation of new solutions and features follows an Agile implementation strategy. • Blue Yonder Airlines has several highly skilled project managers. • Blue Yonder Airlines has a live Microsoft Dataverse instance that runs several model driven Microsoft Power Apps apps. Several initiatives using Microsoft Power Automate and Power Virtual Agents are in the middle of implementations. Development - • There are five different functional groups, called pods, which fully own their development cycles for different functionality in their ERP. • All code is deployed and managed by using Microsoft Visual Studio projects. • All development environments are currently hosted by a third-party company. The current costs are very expensive. • Blue Yonder Airlines plans to use the new ERP implementation to address performance and integration issues. Licensing - • Blue Yonder Airlines does not require licensing on its ERP solution because the system is custom. • Most users have more access within the ERP solution than required. Requirements - Technology - • The previous custom ERP data will be replaced with Dynamics 365 Finance and Operations apps in the current reporting and analytics platform. • Only native Dynamics 365 capabilities should be used. • The level of effort required from IT staff must remain the same. • Standard SSRS reports will be used. • The current third-party financial reporting tool does not integrate with Dynamics 365. • Blue Yonder Airlines has a highly experienced in-house team of implementation experts. It will implement Dynamic by using only internal employees. No Microsoft partner will be engaged in the implementation. Data - • Historical data will remain in the current system for reporting purposes. • Some sample data that needs to be migrated to Dynamics 365 includes: o Data set 1 - Active airplanes - Planes that actively transport customers o Data set 2 - Queued flights - Completed flights but not yet invoiced will be migrated o Data set 3 - Flight consumption measurement - Units of measurement of gasoline consumed per flight o Data set 4 - VIP customers - Customers that average $3,000 USD per flight Development - • Each of the pods' development teams must be able to deploy all of its code independently from one another. • Overlayering of base Microsoft or third-party code must be prevented. • Each developer must have their own environment. • Development environment costs should be as low as possible. • Developers should be able to access their development environments 24 hours a day. • The development team must create a performance strategy that involves the functional implementation team and the different development teams by using Microsoft recommendations. User configuration - • To save on implementation costs. Blue Yonder Airlines will determine which base security roles to assign to which users to conduct their day-to-day operations. Only base security roles will be used without modification. Issues - Development - • The development and functional teams are not taking ownership of the performance benchmark testing. There are no functional designs, benchmark scenarios, or expectations setting created to date. Security - • Blue Yonder Airlines does not know how to configure the security of the users to enable access to complete its day-to-day operations. Licensing - • A licensing compliance audit has determined that the correct number of employees are added to the system but too many base and attach licenses are being used. • Some users will likely have to consolidate duties to maintain compliance. You need to recommend a strategy to resolve the issue with the performance benchmarks. What should you recommend?

A. sprint plan
B. project plan
C. RACI plan
D. FastTrack workshop
E. Scrum board
Show Answer
Correct Answer: C
Explanation:
The core issue is lack of ownership and accountability for defining functional designs, benchmark scenarios, and performance expectations. A RACI plan explicitly assigns who is Responsible, Accountable, Consulted, and Informed for performance benchmarking activities across functional and development teams. This directly resolves the ownership gap, aligns teams per Microsoft performance recommendations, and does not add extra effort or external dependencies.

Question 113

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 - Blue Yonder Airlines is a private airline company established in 1963 in Boston. The company completes over 2,000 flights a day with flights operating exclusively in North America. Blue Yonder Airlines is in the planning phase for replacing its current enterprise resource planning (ERP) with Dynamics 365 Finance, Supply Chain Management, and Commerce and is making solution architecture decisions prior to engaging the remainder of the implementation team. Current environment - Technology - • Blue Yonder Airlines operates on a custom-built ERP solution. • Blue Yonder Airlines uses a proprietary reporting and analytics platform that reports on data between multiple systems, including the ERP solution. • The ERP solution automatically pushes transactional data every five minutes to a separate database that the reporting and analytics platform uses for sales and operations planning (S&OP) activities. • SQL Server Reporting Services (SSRS) reports are used for several financial reports that are sent to vendors in the existing ERP solution. • Users utilize a third-party tool that selects alternate layouts of the reports depending on the users' requirements. • Blue Yonder Airlines currently uses Microsoft 365 and Office 365. Implementation - • The implementation of new solutions and features follows an Agile implementation strategy. • Blue Yonder Airlines has several highly skilled project managers. • Blue Yonder Airlines has a live Microsoft Dataverse instance that runs several model driven Microsoft Power Apps apps. Several initiatives using Microsoft Power Automate and Power Virtual Agents are in the middle of implementations. Development - • There are five different functional groups, called pods, which fully own their development cycles for different functionality in their ERP. • All code is deployed and managed by using Microsoft Visual Studio projects. • All development environments are currently hosted by a third-party company. The current costs are very expensive. • Blue Yonder Airlines plans to use the new ERP implementation to address performance and integration issues. Licensing - • Blue Yonder Airlines does not require licensing on its ERP solution because the system is custom. • Most users have more access within the ERP solution than required. Requirements - Technology - • The previous custom ERP data will be replaced with Dynamics 365 Finance and Operations apps in the current reporting and analytics platform. • Only native Dynamics 365 capabilities should be used. • The level of effort required from IT staff must remain the same. • Standard SSRS reports will be used. • The current third-party financial reporting tool does not integrate with Dynamics 365. • Blue Yonder Airlines has a highly experienced in-house team of implementation experts. It will implement Dynamic by using only internal employees. No Microsoft partner will be engaged in the implementation. Data - • Historical data will remain in the current system for reporting purposes. • Some sample data that needs to be migrated to Dynamics 365 includes: o Data set 1 - Active airplanes - Planes that actively transport customers o Data set 2 - Queued flights - Completed flights but not yet invoiced will be migrated o Data set 3 - Flight consumption measurement - Units of measurement of gasoline consumed per flight o Data set 4 - VIP customers - Customers that average $3,000 USD per flight Development - • Each of the pods' development teams must be able to deploy all of its code independently from one another. • Overlayering of base Microsoft or third-party code must be prevented. • Each developer must have their own environment. • Development environment costs should be as low as possible. • Developers should be able to access their development environments 24 hours a day. • The development team must create a performance strategy that involves the functional implementation team and the different development teams by using Microsoft recommendations. User configuration - • To save on implementation costs. Blue Yonder Airlines will determine which base security roles to assign to which users to conduct their day-to-day operations. Only base security roles will be used without modification. Issues - Development - • The development and functional teams are not taking ownership of the performance benchmark testing. There are no functional designs, benchmark scenarios, or expectations setting created to date. Security - • Blue Yonder Airlines does not know how to configure the security of the users to enable access to complete its day-to-day operations. Licensing - • A licensing compliance audit has determined that the correct number of employees are added to the system but too many base and attach licenses are being used. • Some users will likely have to consolidate duties to maintain compliance. You need to determine which tool to use to run the vendor's financial reports. Which tool should you use?

A. Microsoft Power BI reports
B. Microsoft Word add-in templates
C. Dynamics 365 financial reports
D. modern report design templates
Show Answer
Correct Answer: C
Explanation:
Vendors require standardized financial statements produced directly from Dynamics 365 Finance using native capabilities. Dynamics 365 financial reports (Management Reporter) are designed specifically for statutory and vendor financial reporting, replace SSRS-based financial reports, and do not require third‑party tools. Power BI and modern report design templates are not appropriate for formal vendor financial statements, and Word add-ins are not used for core financial reporting.

Question 114

HOTSPOT - A food production company is implementing Dynamics 365 Supply Chain Management. The company must run production for salad kits that do not contain nut allergens first, and salad kits that do contain nut allergens second to avoid cross contamination. The salad kits create by-products. You need to identify business process steps to ensure that production orders for salad kits that are free of nut allergens are produced first. What should you do? To answer, select the appropriate options in the answer area. NOTE: Each correct selection is worth one point.

Illustration for MB-700 question 114
Show Answer
Correct Answer: Set up raw materials for finished goods: Formula Configure the batch sequence: Sequence group Enable the sequence planned orders parameter: Master planning
Explanation:
Food production with by-products requires process manufacturing, which uses formulas instead of BOMs. Batch sequencing to prevent allergen cross-contamination is controlled by sequence groups. Enabling sequence planned orders in master planning ensures planned production orders follow the defined sequence (nut-free first, then nut-containing).

Question 115

An organization uses Dynamics 365 Finance. You are hired to architect a solution for the organization. You need to analyze usage characteristics. Which tool should you use?

A. Business Process Modeler
B. Microsoft Excel
C. Trace Parser
D. Data Management Workspace
Show Answer
Correct Answer: C
Explanation:
To analyze usage characteristics in Dynamics 365 Finance—such as execution flow, performance, SQL calls, and bottlenecks—the appropriate tool is Trace Parser. It captures and analyzes runtime traces from the system, which is essential when architecting a solution based on real usage and performance behavior. The other options focus on process modeling, data manipulation, or data import/export rather than runtime usage analysis.

Question 117

A company produces automotive components. The company uses Microsoft Excel to track the quantity of parts on hand. The company wants to automate processes to track inventory using Dynamics 365 Supply Chain Management. You need to ensure that the company can track suppliers and determine when to purchase new inventory. Which two features should you use? Each correct answer presents part of the solution. NOTE: Each correct selection is worth one point.

A. Purchase policies
B. Master planning
C. Purchase agreements
D. Purchase requisitions
E. Demand forecasting
Show Answer
Correct Answer: B, E
Explanation:
Master planning calculates when and how much inventory to replenish based on current stock, lead times, and demand, enabling automated purchase planning. Demand forecasting predicts future demand for components, which feeds master planning to determine when new inventory should be purchased. Together, these features automate inventory tracking and replenishment decisions.

Question 118

You need to manage the roles and responsibilities for security and financial management to address concerns found in the prior year's audit. What should you do?

A. Implement a security group for all users in finance department.
B. Grant multiple security roles per user.
C. Use security roles with audit workbench.
D. Use security roles with segregation of duties.
Show Answer
Correct Answer: D
Explanation:
The audit concern indicates a lack of separation between conflicting financial tasks (for example, creating and paying invoices). This is a classic segregation of duties issue. Using security roles designed with segregation of duties ensures that incompatible responsibilities are split across different users, directly addressing both security and financial audit findings. The other options do not prevent conflicts of interest or control weaknesses.

Question 119

You need to recommend the appropriate number of production instances and the hosting location. What should you recommend?

A. Two production instances hosted in China and the United States.
B. One on-premises production instance hosted in United States and one cloud production instance hosted in China.
C. One production instance hosted in the United States.
D. One production instance in China.
E. Two on-premises production instances hosted in both China and the United States.
Show Answer
Correct Answer: C
Explanation:
With no stated requirements for regional data residency, low latency in China, or regulatory isolation, a single production instance is sufficient. Hosting it in the United States is the default and most cost‑effective choice, avoiding the added complexity, compliance overhead, and synchronization challenges of maintaining multiple instances or operating in China.

Question 120

Note: This question is part of a series of questions that present the same scenario. Each question in the series contains a unique solution that might meet the stated goals. Some question sets might have more than one correct solution, while others might not have a correct solution. After you answer a question in this section, you will NOT be able to return to it. As a result, these questions will not appear in the review screen. A company is planning to implement Dynamics 365 Supply Chain Management with three locations. Two locations must use United States currency (USD) as the default currency. The third location must use Canadian currency (CAD). One US facility and the Canadian facility must use advanced warehouse functionality. The other US facility must use basic warehousing. You need to configure the legal entity, site, and warehouse architecture to meet the requirements. Solution: Create two legal entities, one for advanced warehouse and one for basic warehouse. Does the solution meet the goal?

A. Yes
B. No
Show Answer
Correct Answer: B
Explanation:
No. Advanced vs. basic warehouse functionality is configured at the warehouse level, not by creating separate legal entities. You can have both advanced and basic warehouses within the same legal entity. Therefore, creating two legal entities solely to separate advanced and basic warehousing does not meet the stated requirements.

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