Drag and Drop Question A manufacturer sends wiring harnesses to a vendor to be soldered to a connector. You create the subcontracting process in the bill of materials (BOM) and route to account for th

The correct answer is Create a new item model group and select the stocked product option.; Add the service item and set the new inventory model group in the BOM to FIFO.; Add the service item to the BOM.. Subcontracting Service Item Setup - Explanation Context: This is a Microsoft Dynamics 365 Supply Chain Management scenario (likely MB-320). You're setting up a subcontracting operation where a vendor performs a service (soldering) on your components. A service item represents tha

Configure production prerequisites

Question

Drag and Drop Question A manufacturer sends wiring harnesses to a vendor to be soldered to a connector. You create the subcontracting process in the bill of materials (BOM) and route to account for the items sent to the vendor. You need to set up a new item model group for the service item. Which three actions should you perform? To answer, move the appropriate actions from the list of actions to the answer area and arrange them in the correct order. Answer:

Exhibit

Answer Area

Drag items

Assign the item model group to the service item and select the stocked product option.Create a new item model group and clear the stocked product option.Add the service item to the BOM.Add the service item and set the new inventory model group in the BOM to FIFO.Create a new item model group and select the stocked product option.

Correct arrangement

Create a new item model group and select the stocked product option.
Add the service item and set the new inventory model group in the BOM to FIFO.
Add the service item to the BOM.

Explanation

Subcontracting Service Item Setup - Explanation

Context: This is a Microsoft Dynamics 365 Supply Chain Management scenario (likely MB-320). You're setting up a subcontracting operation where a vendor performs a service (soldering) on your components. A service item represents that vendor operation in the BOM, and it needs a properly configured item model group before it can be used.

Correct Order & Why

Step 1: Create a new item model group and select the stocked product option.

Why first: The item model group is a prerequisite - you cannot assign what doesn't exist yet. This must be created before any item references it.

Why "select" stocked product (not clear it): For subcontracting, the service item must be treated as a stocked product so D365 can:

Track it through inventory transactions
Apply proper cost accounting when the vendor service is received
Integrate with the purchase order generated from the subcontracting route operation

Common mistake: Choosing "clear the stocked product option." Non-stocked items bypass inventory tracking entirely, which breaks the subcontracting cost flow. The distractor option that clears it is wrong precisely here.

Step 2: Add the service item and set the new inventory model group in the BOM to FIFO.

Why second: Now that the item model group exists, you configure the service item itself - assigning the new group and specifying FIFO as the inventory valuation method.

Why FIFO here: FIFO is the costing method being applied within the item model group context. It determines how costs flow when the subcontracted service is consumed. This must be set before the item is formally placed in the BOM structure so the BOM line inherits the correct costing behavior.

Common mistake: Skipping costing method configuration and jumping straight to adding the item to the BOM. Without FIFO assigned, costs may not flow correctly through the production order.

Step 3: Add the service item to the BOM.

Why last: Only after the item model group is created (Step 1) and the service item is fully configured with the correct group and costing method (Step 2) should you place it in the BOM. At this point the item is "ready" - stocked, costed, and properly classified - so the BOM line will behave correctly during production and subcontract PO generation.

Common mistake: Adding the item to the BOM first, before its model group is set up. D365 may allow this, but it creates misconfigured BOM lines that will cause cost and inventory transaction errors at production order release.

Why the Other Options Are Wrong

Option	Problem
Clear the stocked product option	Breaks inventory tracking - subcontracting requires stocked items
Assign the item model group to the service item and select the stocked product option	The stocked product flag lives on the model group, not on the item-to-group assignment. This conflates two concepts and is not how D365 works.

TL;DR sequence logic: Group setup → Item configuration with that group → BOM placement. Each step depends on the previous one being complete.

Topics

#subcontracting#item model group#service item#BOM configuration

Community Discussion

No community discussion yet for this question.

Full MB-335 Practice