MD 365 SCM Interview Questions and Answers for Fresher in 2025
If you are preparing for MD 365 SCM Interview Questions and Answers for Fresher in 2025, you are in the right place. Supply Chain Management (SCM) in Microsoft Dynamics 365 is one of the most in-demand skills for freshers aiming to start a career in ERP and business process automation. Top MNC companies are actively hiring candidates with MD 365 SCM knowledge to streamline procurement, inventory, production, and logistics operations.
To help learners, MyLearnNest Training Institute has compiled a comprehensive set of 150+ MD 365 SCM interview questions and answers. These questions are carefully collected from real interviews conducted by top IT and consulting firms. They cover key topics like master planning, demand forecasting, inventory management, procurement workflows, product information management, and order processing in Dynamics 365 SCM.
At MyLearnNest, our expert trainers prepare students not only with theory but also with practical interview-focused training. The MD 365 SCM questions and answers for freshers in 2025 are designed to help candidates crack interviews confidently and understand industry requirements. With hands-on training, case studies, and placement support, learners gain job-ready skills.
By practicing these MD 365 SCM interview questions, freshers can boost their confidence and secure roles in top companies as SCM consultants, functional analysts, or ERP support specialists.
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MD 365 SCM Interview Questions and Answers for Fresher in 2025 Collected from TOP MNCs
- What is Microsoft Dynamics 365 Supply Chain Management?
Microsoft Dynamics 365 SCM is an ERP solution that helps businesses manage their supply chain operations, inventory, manufacturing, and logistics. It is part of the Dynamics 365 suite. It helps improve visibility and efficiency across the supply chain.
- What modules are included in Dynamics 365 SCM?
Modules include inventory management, procurement, sales, product information, master planning, production control, and warehouse management. Each module serves a specific part of the supply chain process. These modules work together to streamline operations.
- What is the purpose of inventory management in SCM?
Inventory management helps track and control stock levels across warehouses and locations. It ensures optimal inventory to meet customer demand. It reduces carrying costs and avoids stockouts or overstocking.
- What is a product in Dynamics 365 SCM?
A product is any item that a company sells, purchases, or stores. It includes details like product type, dimensions, and tracking information. Products are created in the Product Information Management module.
- What is a released product?
A released product is a product that is available for use in a specific legal entity. It can be transacted, sold, or purchased within that company. It contains entity-specific details like price, warehouse, and item group.
- What is the purpose of product dimensions?
Product dimensions define variations of a product such as size, color, and configuration. They help manage product variants within a single product master. This simplifies inventory and order management. - What is the difference between procurement and sourcing?
Procurement focuses on purchasing goods and services from vendors. Sourcing involves selecting the right vendors and negotiating contracts. Both ensure the organization gets materials at the right price and quality.
- What is a purchase agreement?
A purchase agreement is a long-term contract with a vendor outlining pricing and quantity commitments. It can be set up to automate discounts or terms for multiple purchase orders. This helps maintain consistent procurement terms.
- What is a purchase order?
A purchase order is a document sent to a vendor to request goods or services. It includes details like item number, quantity, price, and delivery date. It is a key part of the procurement process.
- What is a sales order?
A sales order is created when a customer places an order for goods or services. It contains information about the customer, product, quantity, and delivery schedule. It drives fulfillment and invoicing processes.
- What is demand forecasting?
Demand forecasting predicts future customer demand based on historical data. In Dynamics 365 SCM, it helps plan inventory, production, and procurement. Accurate forecasting improves supply chain efficiency.
- What is master planning in Dynamics 365 SCM?
Master planning calculates material and capacity requirements to meet demand. It generates planned orders for production, purchase, or transfer. It ensures the supply chain runs without interruptions.
- What is the difference between static and dynamic plan?
A static plan uses a fixed dataset and is typically generated once a day. A dynamic plan updates more frequently and responds to real-time changes. Both help planners take timely action.
- What is a bill of materials (BOM)?
A BOM is a list of raw materials, components, and subassemblies needed to manufacture a product. It defines the structure of a finished product. BOMs are essential in production planning and costing.
- What is the route in manufacturing?
A route defines the operations, resources, and sequence needed to produce a product. It includes work centers and estimated time for each step. Routes are used to plan and track production.
- What is a work center?
A work center is a physical or logical location where operations are performed. Examples include machines, production lines, or labor groups. Work centers are assigned to routing steps.
- What is production order in Dynamics 365?
A production order is created to manufacture goods. It contains product, quantity, BOM, and routing information. It goes through stages like scheduling, releasing, and reporting as finished.
- What is a warehouse in SCM?
A warehouse is a location where inventory is stored and managed. Dynamics 365 supports simple and advanced warehouse management. It controls storage, picking, shipping, and receiving.
- What is advanced warehouse management?
Advanced warehouse management includes features like location control, mobile device support, and wave processing. It offers more detailed and flexible warehouse operations. It is suitable for complex warehouse environments.
- What is a location in warehouse management?
A location is a specific place within a warehouse where items are stored. It helps with accurate inventory tracking and faster picking. Locations are part of the warehouse layout setup.
- What is wave processing?
Wave processing groups sales or transfer orders for batch picking and shipping. It increases warehouse efficiency by optimizing picking operations. Waves can be processed manually or automatically.
- What is a mobile device menu in warehouse management?
It is a user interface for warehouse workers using handheld devices. It allows tasks like picking, receiving, and counting to be performed. The menus are customizable to fit specific workflows.
- What is inventory reservation?
Inventory reservation holds stock for specific orders to ensure availability. It prevents the same inventory from being used in other transactions. Reservations can be automatic or manual.
- What is inventory status?
Inventory status represents the usability of inventory like “Available,” “Blocked,” or “Damaged.” It helps segregate inventory for different purposes. It is a key parameter for controlling transactions.
- What is cycle counting?
Cycle counting is an inventory audit method where a portion of items is counted regularly. It reduces the need for full physical inventory. It helps maintain accurate inventory records.
- What is a transfer order?
A transfer order is used to move inventory from one warehouse or location to another. It includes source and destination details. It helps maintain inventory balance across warehouses.
- What is inventory adjustment?
Inventory adjustment is used to correct stock levels manually. It reflects changes due to loss, damage, or counting discrepancies. Adjustments ensure that system inventory matches physical inventory.
- What is a vendor in Dynamics 365 SCM?
A vendor is a company or individual who supplies goods or services. Vendor records include contact info, payment terms, and purchasing data. Vendors are essential for procurement and sourcing.
- What is a customer record?
A customer record stores details of a company or person purchasing products. It includes billing, shipping, and financial data. It’s used in sales and service processes
- What is the difference between purchase requisition and purchase order?
A purchase requisition is an internal request for a product or service. A purchase order is sent to a vendor to procure those items. Requisitions may be converted into purchase orders.
- What is economic order quantity (EOQ)?
EOQ is the ideal order quantity that minimizes total inventory costs. It balances ordering and holding costs. It helps determine when and how much to order.
- What is vendor collaboration?
Vendor collaboration allows vendors to access and manage orders via a portal. They can confirm orders, view invoices, and update delivery dates. It improves communication and efficiency.
- What is a trade agreement?
A trade agreement defines pricing, discounts, and conditions between a company and a customer or vendor. It can be time-bound or quantity-based. It automates pricing on transactions.
- What is product lifecycle state?
Product lifecycle state shows the stage of a product, like “Developing”, “Active”, or “Discontinued”. It helps control product use in transactions. Lifecycle states are configurable.
- What is batch number tracking?
Batch tracking enables tracking of groups of items produced together. It’s useful for recalls or quality checks. Each batch has a unique ID linked to transactions.
- What is serial number tracking?
Serial tracking assigns a unique number to each item unit. It allows tracking from purchase to sale. It’s used for warranty, returns, and high-value items.
- What is inventory valuation?
Inventory valuation determines the monetary value of inventory. Methods include FIFO, LIFO, and weighted average. It’s crucial for financial reporting.
- What is a production BOM version?
A BOM version links a specific list of materials to a product. It supports multiple versions based on site or date. It allows flexibility in production processes.
- What is route versioning?
Route versioning manages different production routes for a product. Each version can be site- or date-specific. It’s useful for handling changes in production methods. - What is a production schedule?
A production schedule outlines when production orders should be executed. It ensures efficient use of resources and meets delivery dates. It’s based on demand and capacity.
- What is capacity planning?
Capacity planning assesses if resources are sufficient to meet production goals. It considers machine, labor, and time availability. It helps avoid bottlenecks.
- What is lean manufacturing?
Lean manufacturing focuses on minimizing waste and maximizing value. Dynamics 365 supports lean principles like Kanban and flow production. It promotes efficient operations.
- What is Kanban in Dynamics 365?
Kanban is a scheduling system used for lean manufacturing. It signals the need to move or produce materials. Dynamics 365 uses Kanban boards to track tasks.
- What is cost group?
Cost group defines cost categories for items, like material, labor, or overhead. It’s used in cost analysis and posting. Helps track and manage costs accurately.
- What is inventory closing?
Inventory closing calculates and finalizes inventory cost for a period. It updates inventory transactions with adjusted costs. It ensures accurate financials.
- What is item model group?
Item model group controls inventory behavior like costing method and reservation. It’s assigned to items during setup. It affects how items are tracked and valued.
- What is site and warehouse in item setup?
Site defines a broader location, while warehouse is a specific storage area within a site. Both are used to define where inventory is located. Required for order processing.
- What is physical and financial inventory update?
Physical update records item quantity movement. Financial update records the cost or value of that movement. Both are important for inventory accuracy.
- What is automatic reservation?
Automatic reservation links available inventory to sales or production orders. It happens when the order is created or updated. Reduces manual effort.
- What is demand forecasting integration with Azure Machine Learning?
Dynamics 365 can use Azure ML to predict future demand. It provides better forecasting using historical and external data. Improves planning accuracy.
- What is intercompany trading in Dynamics 365 SCM?
Intercompany trading allows transactions between legal entities in the same organization. It automatically creates linked sales and purchase orders. This simplifies cross-company operations.
- What is consignment inventory?
Consignment inventory is owned by the vendor but stored at the customer’s location. The customer only pays when the inventory is consumed. Dynamics 365 tracks ownership and usage.
- What is safety stock?
Safety stock is extra inventory kept to prevent stockouts due to demand variability. It acts as a buffer during unexpected situations. It ensures customer orders are fulfilled.
- What is replenishment in warehouse management?
Replenishment is the process of moving inventory to picking locations. It ensures sufficient stock is available for order fulfillment. It can be triggered manually or automatically.
- What is inventory aging report?
Inventory aging report shows how long inventory items have been in stock. It helps identify slow-moving or obsolete items. Useful for inventory control and cost management.
- What is a packing slip?
A packing slip lists the items shipped to the customer. It’s created after goods are picked and before invoicing. It helps verify shipment contents.
- What is a pick list?
A pick list is a document or instruction used to gather items for shipping. It includes item numbers, locations, and quantities. It guides warehouse workers during order picking.
- What is license plate in warehouse management?
A license plate is a unique identifier for tracking inventory in containers like pallets or boxes. It simplifies warehouse operations. Items can be moved, received, or picked using license plates.
- What is location directive?
Location directives control where items are stored or picked from in a warehouse. They are part of advanced warehouse management setup. Ensures items are placed in optimal locations.
- What is work template?
Work templates define steps for warehouse operations like picking, receiving, or packing. They standardize tasks for efficiency. Each template is linked to a work type.
- What is cycle counting threshold?
A cycle counting threshold defines when items should be counted based on criteria like value or frequency. It helps maintain inventory accuracy. It supports continuous audit practices.
- What is product configuration model?
Product configuration model allows users to create product variants dynamically. It’s used for make-to-order scenarios. Users select attributes, and the system builds a custom product.
- What is the purpose of item group?
Item groups categorize items for reporting and accounting purposes. They determine posting profiles and financial integration. Helps in tracking and analyzing product performance.
- What is the difference between planned order and firmed order?
Planned orders are system-suggested and can be modified. Firmed orders are confirmed and ready for execution. Firming locks in the plan.
- What is lead time in supply chain?
Lead time is the time taken from placing an order to receiving the goods. It affects inventory levels and planning. Shorter lead times improve responsiveness.
- What is a BOM line type?
BOM line type defines the role of a component in production. Types include item, phantom, and vendor. It determines how the component is used or processed.
- What is a phantom BOM?
A phantom BOM is used for subassemblies that aren’t stocked but built on demand. It simplifies structure and production. It’s expanded during production planning.
- What is scrap percentage in production?
Scrap percentage accounts for expected waste during manufacturing. It adjusts material requirements accordingly. Helps in accurate planning and costing.
- What is costing version?
Costing version contains item cost data for planning or actual costing. It supports simulation and inventory valuation. It allows tracking cost changes over time.
- What is vendor return?
Vendor return is the process of sending goods back to the supplier. Reasons include defects or incorrect delivery. A return order is used for processing.
- What is the role of unit sequence group?
Unit sequence group defines the order of unit conversions for sales, inventory, or warehouse. It ensures consistency in unit handling. Especially useful in retail or bulk sales.
- What is purchase lead time?
Purchase lead time is the duration between placing and receiving a purchase order. It is used in planning to determine order dates. Impacts inventory availability.
- What is load planning workbench?
Load planning workbench is a tool used to plan shipments and transport. It consolidates orders into loads for shipping. Enhances logistics and delivery efficiency.
- What is the landed cost module?
The landed cost module helps track all costs involved in importing goods. Includes freight, insurance, and customs duties. Helps calculate total item cost accurately.
- What is global address book?
Global address book stores centralized contact data used across legal entities. Includes vendors, customers, and employees. Promotes data consistency and reuse.
- What is a delivery schedule?
A delivery schedule breaks a purchase or sales order into multiple deliveries. It allows you to set quantities and dates for each delivery. This helps manage staggered shipments.
- What is transportation management?
Transportation management controls the movement of goods from one location to another. It includes route planning, freight rates, and carrier management. It optimizes logistics operations.
- What is a service item?
A service item represents a non-inventory item like installation or support. It is used in procurement or sales but has no physical stock. Useful for invoicing services.
- What is catch weight?
Catch weight is used for products measured in two units like weight and quantity. Common in industries like food where weight varies. Both units are tracked for accuracy.
- What is quarantine management?
Quarantine management isolates items until quality checks are complete. It ensures only approved inventory is used or shipped. Supports compliance and safety.
- What is an inventory blocking?
Inventory blocking prevents items from being used in transactions. It’s used during inspections or when issues are found. It ensures control over stock usage. - What is freight reconciliation?
Freight reconciliation compares expected shipping charges with actual invoices from carriers. It helps identify overcharges or discrepancies. Ensures accurate freight accounting. - What is quality management in Dynamics 365 SCM?
Quality management handles inspection processes, test results, and non-conformance. It ensures product standards are met. Supports product traceability and customer satisfaction.
- What is non-conformance?
A non-conformance is a record of product or process failure. It triggers corrective action or rejection. Helps maintain quality standards.
- What is corrective action request (CAR)?
CAR is initiated to resolve a non-conformance issue. It includes steps to prevent recurrence. Used in quality control and audits.
- What is shelf life?
Shelf life is the length of time a product remains usable or sellable. It’s important for perishable goods. Tracked through expiration dates in the system.
- What is product tracking dimension group?
Tracking dimension group defines whether items are tracked by serial, batch, or none. It ensures accurate monitoring throughout the supply chain. Helps in recalls and audits.
- What is a trade allowance agreement?
It’s an agreement to offer discounts or reimbursements to customers. Often used in promotions. Automatically applied to sales orders.
- What is dual unit of measure?
Dual UOM lets you track items in two units, like weight and pieces. It’s useful when the product is sold by count but tracked by weight. Ensures better inventory accuracy.
- What is safety stock journal?
Safety stock journal allows users to update safety stock levels in bulk. Helps streamline planning processes. Supports mass data adjustments.
- What is vendor invoice journal?
It is used to manually post vendor invoices not linked to a purchase order. Includes expenses like rent or utilities. Updates vendor and ledger accounts.
- What is warehouse wave?
A wave is a grouping of work for picking and shipping. It improves efficiency by processing multiple orders together. Supports batch handling of tasks.
- What is reservation hierarchy?
Reservation hierarchy defines how inventory dimensions are reserved, like site, location, batch, serial. It determines reservation order during transactions. Critical for accurate picking.
- What is location profile?
A location profile defines rules and constraints for warehouse locations. Includes storage type, mixing rules, and license plate tracking. Helps manage warehouse layout.
- What is purchase type in procurement?
Purchase type defines the reason for purchasing, like standard, consignment, or intercompany. It determines order behavior. Useful for reporting and tracking.
- What is purchase category?
Purchase categories classify non-stocked procurement like services. They are used instead of item numbers. Useful in indirect purchasing.
- What is costing sheet?
A costing sheet defines how cost elements are calculated and rolled up. Includes material, labor, and overhead costs. Used for cost analysis and pricing.
- What is disposition code?
Disposition code defines what happens to items after inspection, like accept, scrap, or rework. It helps automate post-inspection steps. Improves efficiency in quality processes.
- What is purchase journal?
A purchase journal is used to record vendor transactions like purchases or returns manually. It updates financial and vendor balances. Common for non-inventory expenses.
- What is unit of measure conversion?
It allows you to define how different units relate, like 1 box = 10 pieces. It helps maintain consistency in sales, inventory, and procurement. Essential for accurate transactions.
- What is product readiness check?
Product readiness check ensures that required product information like price and dimensions are set before transactions. It helps prevent data issues during sales or purchase. It’s a validation tool before product use.
- What is batch reservation?
Batch reservation lets you assign specific batch numbers to fulfill orders. It ensures correct tracking for batch-controlled products. Useful in industries like pharmaceuticals or food.
- What is engineering change management?
Engineering change management tracks product changes over time. It manages versions, approvals, and documentation. Supports better product lifecycle control.
- What is vendor collaboration workspace?
It’s a portal where vendors can see orders, confirm deliveries, and update information. Improves supplier communication. Reduces manual follow-up for procurement teams.
- What is invoice matching?
Invoice matching ensures vendor invoices match purchase orders and receipts. It helps prevent overpayments and fraud. Can be two-way or three-way matching.
- What is inventory movement journal?
It records inventory transfers within a warehouse without financial impact. Used for adjustments like reclassification. Maintains accurate stock records.
- What is a cross-docking strategy?
Cross-docking moves received goods directly to shipping without storing them. Reduces storage and speeds up delivery. Efficient for high-volume, fast-moving goods.
- What is advanced warehouse management?
Advanced WMS provides real-time tracking and control of warehouse processes. Includes mobile device integration, work templates, and wave processing. Enhances operational accuracy and speed.
- What is a return order?
A return order processes goods returned by customers. It tracks reason codes, return quantity, and refund or replacement. Ensures reverse logistics is managed efficiently.
- What is the purpose of reason codes?
Reason codes explain why a transaction occurred, like return, damage, or adjustment. Useful for analysis and audit trails. Helps track patterns in operations. - What is BOM consumption?
BOM consumption refers to the use of raw materials listed in a BOM during production. It’s recorded during production posting. Ensures accurate material tracking.
- What is process manufacturing?
Process manufacturing is used for products created in batches like food or chemicals. It involves formulas instead of BOMs. Supports co-products and by-products.
- What is discrete manufacturing?
Discrete manufacturing builds distinct items like electronics or machinery. It uses BOMs and routes. Each unit can be tracked individually.
- What is co-product and by-product?
Co-products are valuable outputs from a production process, while by-products have lower value or are waste. Both are tracked in process industries. Managed in production formulas.
- What is a formula in process manufacturing?
A formula is like a BOM but used in process industries. It defines ingredients, quantities, and co/by-products. Essential for batch-based production.
- What is a catch weight product?
A catch weight product is sold in one unit (like pieces) and tracked in another (like weight). Both units are recorded. Common in meat and cheese industries.
- What is route operation?
Route operation defines the steps required to manufacture an item. Each step has time, resource, and cost details. Helps plan and schedule production.
- What is resource scheduling?
Resource scheduling allocates machines and labor for production. Ensures efficient use of capacity. Prevents conflicts and delays.
- What is operation scheduling?
Operation scheduling plans when each production step occurs. It helps manage lead time and delivery dates. Linked with resource availability.
- What is inventory dimension?
Inventory dimension refers to tracking details like site, warehouse, batch, and serial number. Helps in detailed stock control. Configurable for each item.
- What is vendor catalog import?
Vendor catalog import brings in product data like price and description from vendors. It simplifies item setup. Reduces manual entry errors.
- What is ABC classification in inventory?
ABC classification categorizes items based on value and usage. ‘A’ items are high-value, ‘C’ are low-value. Helps prioritize inventory control.
- What is period close in SCM?
Period close locks down transactions for a specific time frame. It ensures data integrity for reporting. Common in financial and inventory processes.
- What is a location directive action?
It defines what happens to inventory in a location directive, like put-away or pick. Determines where inventory goes in the warehouse. Essential for WMS configuration.
- What is a replenishment template?
A replenishment template defines rules for restocking items. It can be demand-based or fixed quantity. Used to automate warehouse inventory levels.
- What is containerization in warehouse management?
Containerization groups picked items into shipping containers. It improves tracking and packaging efficiency. Useful for organizing outbound shipments.
- What is inbound and outbound in SCM?
Inbound refers to receiving goods from suppliers, while outbound is shipping goods to customers. Both involve logistics, inventory, and documentation. Managed through warehouse processes.
- What is the difference between transfer order and transfer journal?
A transfer order is used for moving inventory between warehouses with shipping and receiving steps. A transfer journal simply updates inventory between locations. Transfer orders offer more control and tracking.
- What is pegging in supply chain planning?
Pegging traces demand to its source, like a sales or production order. It helps planners understand what drives material requirements. Useful for tracking and decision-making.
- What is demand forecasting?
Demand forecasting predicts future customer demand using historical data and trends. It helps in inventory planning and procurement. Available through machine learning integration. - What is lead time trade agreement?
Lead time trade agreement stores vendor-specific delivery times for products. Used in planning and scheduling. Improves procurement accuracy.
- What is the purpose of batch attributes?
Batch attributes hold quality or specification details for a batch, like purity or color. They support advanced tracking and filtering. Common in pharma and food sectors.
- What is demand-driven MRP (DDMRP)?
DDMRP is a modern planning method using actual demand rather than forecasts. It buffers inventory at key points. Helps reduce stockouts and overstocking.
- What is a simulation plan?
A simulation plan lets you test planning scenarios without affecting live data. Used in MRP and forecasting. Helps evaluate impact of changes.
- What is purchase agreement?
A purchase agreement is a long-term contract with vendors for pricing, quantity, or delivery terms. Orders reference the agreement. It helps manage procurement relationships.
- What is quality order?
A quality order defines which items must be tested and how. It includes sample quantity, test criteria, and outcomes. Generated during receiving or production.
- What is a work class in WMS?
Work class categorizes warehouse work like picking or receiving. It controls how tasks are assigned to users. Useful for organizing workloads.
- What is task interleaving in warehouse?
Task interleaving combines tasks like picking and replenishment for efficiency. Reduces travel time in the warehouse. Assigned through work templates.
- What is serial number control?
Serial number control tracks individual items using unique identifiers. It provides high-level traceability. Often used in electronics or warranty products.
- What is route group in production?
Route group contains setup and run time settings for operations. It affects cost and scheduling. Assigned to route operations.
- What is BOM version control?
BOM versioning allows tracking of changes over time. Each version may have different components or validity dates. Ensures correct materials are used.
- What is vendor rebate agreement?
Vendor rebate agreements provide incentives based on purchase volume. The system calculates and accrues rebates. Settled through rebate claims.
- What is demand forecast reduction?
It reduces forecasted demand when actual sales occur. Prevents double-counting demand. Helps maintain realistic inventory plans.
- What is a counting group?
A counting group defines how and when items should be cycle counted. Includes frequency and method. Used in inventory accuracy programs.
- What is marking in inventory transactions?
Marking links inventory issues to receipts. It reserves specific stock for a transaction. Helps in cost tracking and traceability.
- What is shipment consolidation?
Shipment consolidation combines multiple orders into one shipment. Reduces transportation cost and effort. Managed in transportation planning.
- What is the purpose of shipping carrier?
Shipping carriers define external logistics providers used in outbound transport. Includes service level and freight terms. Required for managing deliveries.
- What is a mobile device menu in warehouse?
Mobile device menu configures what options warehouse workers see on handhelds. It guides them through tasks like picking or receiving. Fully customizable.
- What is inventory status?
Inventory status indicates whether items are available, damaged, or quarantined. It can block usage in transactions. Helps control inventory flow.
- What is customer return policy configuration?
It defines the rules and workflows for handling returned items. Includes conditions for approval, refunds, or replacements. Ensures consistent return processing.
