80649AE AX2012R3 ENUS DAT InstructorNotes

COURSE: 80649
DISTRIBUTION AND TRADE IN MICROSOFT

DYNAMICS AX 2012 R3
INSTRUCTOR NOTES
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Contents and Timeline Chart
Course: 80649 i
INSTRUCTOR NOTES i
Introduction to Instructor Notes 1
Module 1: Overview 8
Module 2: Over and Under Delivery 10
Module 3: Charges 11
Module 4: Customer and Vendor Agreements 14
Module 5: Item Arrival and Registration 19
Module 6: Quarantine management 22
Module 7: Vendor Returns 25
Module 8: Sales Quotations 28
Module 9: Item Reservations 31
Module 10: Sales Order Picking 36
Module 11: Customer Returns 41
Module 12: Commissions 46
Module 13: Transfer Orders 49
Module 14: Reports 52
** Intended for Instructor Preparation Only ** Page i

Distribution and Trade in Microsoft Dynamics AX 2012 R3
Timeline
Total Class Presentation: 17 hours
Module Description Minutes to Complete Chapter

Module 1: Overview Presentation: 15 minutes
Module 2: Over and Under Delivery Presentation: 30 minutes
Module 3: Charges Presentation: 30 minutes

Module 4: Customer and Vendor Presentation: 130 minutes
Agreements
Module 5: Item Arrival and Registration Presentation: 80 minutes
Module 6: Quarantine Management Presentation: 65 minutes
Module 7: Vendor Returns Presentation: 50 minutes
Module 8: Chapter Quotations Presentation: 90 minutes
Module 9: Item Reservations Presentation: 90 minutes
Module 10: Sales Order Picking Presentation: 90 minutes
Module 11: Customer Returns Presentation: 100 minutes
Module 12: Commissions Presentation: 70 minutes
Module 13:Transfer Orders Presentation: 90 minutes
Module 14: Reports Presentation: 60 minutes
Page ii ** Intended for Instructor Preparation Only **

Instructor Notes
INTRODUCTION TO INSTRUCTOR NOTES

Objectives
The objectives are:
• Provide instructors with guidance on how to use instructor notes.

• Provide guidance on how to use the training manual’s
introductory module.
• Set expectations of instructors for pre- and post-class tasks.
• Set expectations of how to begin class.
• Present the introduction.
Introduction
This module serves as introductory guidance to instructors teaching Microsoft
Dynamics® classes. The purpose of this chapter is to create consistency between
all classes. A participant attending a development class for software solution A
should experience the same class beginning as a participant attending an
application class for software solution B.
This module provides the following information:
• How to use the Introduction module

• Pre-class tasks
• How to begin class
• How to use the instructor notes
• Post-class tasks
** Intended for Instructor Preparation Only ** Page 1

Pre-Class Tasks
There are several tasks that instructors should take care of to ensure a smooth
start-up to the class. These include, but are not limited to:
• Contact training center in advance – Contact the training

center several days prior to the beginning of class and verify
these things:
o Center has correct VPC image.
o Image will be installed prior to your arrival.
o Training room has white boards, markers, flip charts, and
audiovisual equipment required to deliver the class.
o Confirm the date and time you will arrive at the center.
• Check the training room before class – Go to the training

center and check your room the day before class starts. Verify
that equipment is available and images are loaded. Always test
the image during this inspection visit. This is also the time to set
out participant materials at the participant desks, prepare name
cards, prepare white boards and flip charts for use, and to test
audiovisual equipment.
• Arrive early the first day of class – Leave yourself time to take
care of last minute details. Give yourself time to start up your
instructor machine, open your Microsoft PowerPoint slide deck,
and ready your notes.
• Prepare a parking lot – It is strongly encouraged to designate a
flip chart page or a section of a white board as a parking lot for
unanswered questions. This will enable the instructor to set aside
questions that cannot be immediately answered or that require
answers that can take longer than the class timeline allows.
• Display the Welcome slide – The Welcome slide is the first
slide in each class slide deck. This slide should be on display as
participants enter the room.
• Ensure participant sign-in – Ensure that participants sign the
class roster provided by the training center as they enter the
training room.
Please check on PartnerSource to see if there is a training Extension that goes

with this course. The Extension is to be used with the courseware, not as stand-
alone training manual. You can download the Extension from PartnerSource:
https://mbs.microsoft.com/partnersource go to Communities then the Training
materials. Be sure to provide the course participants with the Extension as part of
the student materials. Besides the training manuals the Extensions also include
the Syllabus and Instructor Notes to help the instructor prepare for the training.
Page 2 ** Intended for Instructor Preparation Only **

Instructor Notes
Beginning the Class

Introductions
The beginning of class is guided by the first few slides of the PowerPoint slide
deck. Display the Introductions slide and introduce yourself using the bullets on
the slide. The instructor should include information about the qualifications the
instructor has to teach the class.
Allow participants time to introduce themselves using these same bullets.
Class Logistics
Display the next slide and go through the logistics of times, breaks, and
bathrooms. This is also a good time to start setting expectations for participation:
class will start on time and participants are expected to shut off mobile phones
and email at that time.
Introduce the Class

The remaining slides will introduce the table of contents of the class. It is
recommended to have the participants open the training manual and browse the
table of contents while you review the topics that will be covered in class.
Disclaimer (page 2)
Before you continue with the class, be sure to point the students to the copyright
and disclaimer language found on page 2 of their student materials. Ask the
students to read it, and pause for a couple of minutes before proceeding to allow
them time to do so
The Introduction Module

There are no planned slides for the Introduction module Instructors should use
their discretion to call out the highlights from the module.
The introduction module contains information about:
• Microsoft Dynamics training offerings – Make participants

aware of the information for their later reference.
• Microsoft Dynamics certifications – Make participants aware
of the information for their later reference; stress that 100
percent of the questions on certification exams are incorporated
into the content provided in the training manual.

• Class prerequisites – Use the information to assist in the

expectation setting for the class; this ensures that all participants
understand what the expected level of expertise is for taking part
in the class.
• Module contents – A summary of each module and information
about the organization of the module; in particular discuss the
three levels of labs.
Give the participants time to write down their objectives for the class. This will
help them focus on the information and skills they want to learn during the class.

Instructor Notes
How to Use Instructor Notes

Instructor notes are provided by Microsoft Dynamics content developers to serve
as a guide for instructors. They are the communication link between developers
and instructors.
Content developers write instructor notes to:
• Provide guidance on which topics should be emphasized during

class.
• Provide clarification on how to use examples and case studies
provided in the content.
• Provide approximate timelines for presentation and completion
of material.
• Provide guidance on how to augment the presentation of the
content with Microsoft PowerPoint slides.
• Provide tips and tricks to augment participant learning.
• Inform instructors of any special requirements of the class.
• Provide any additional files that are to be used with a chapter.
Instructor notes do not have to be followed verbatim. They are suggestions for
how to present the material included in the training manual and must be adapted
to the individual skills and knowledge of the instructor.
However, the instructor notes are written by seasoned training professionals that
are trained on the best practices in classroom training presentation. Also, the
content developers have tapped into the various expert resources of Microsoft
Business Solutions consulting, development, and support professionals and
Microsoft Business Solutions Partner professionals to include the most relevant
information possible for instructors to use in their presentations.
Therefore it is important for instructors to incorporate the guidance provided by

the instructor notes into their presentations.
Organization of Instructor Notes

Instructor notes are written in the order in which the material is presented in the
training manual. Instructions and suggestions can be cross-referenced with the
training manual topic by topic, and in many cases paragraph by paragraph.
Instructor notes will suggest the appropriate time to display the slides that
accompany each chapter. Slides are provided to give instructors visual references
for participants while the instructor explains the topic being presented.
Instructor notes will also provide any additional information needed to set the
stage for participants to engage in the labs.

Using Callouts
Callouts are used to draw attention to useful information. During class, consider
highlighting call-outs as appropriate. Following is an example of how callouts are
used throughout the training material.
CAUTION: Cautions are found throughout the training courseware and are preceded by
the word CAUTION in bold. Cautions are used to remind you of a specific result of a
specific action which might be undesirable.
HINT: Hints are found throughout the training courseware and are preceded by the
word HINT in bold. Hints are used to suggest time-saving features or alternative
methods for accomplishing a specific task.
NOTE: Notes are found throughout the training courseware and are preceded by the
word NOTE in bold. Notes are used to provide information which, while not critical, can
be valuable to an end user.
EXAMPLE: Examples are found throughout the training courseware and are preceded
by the word EXAMPLE in bold. Examples bring to light business scenarios that can
better explain how an application can be used to address a business problem.
BEST PRACTICES: Best Practices call out background information and best practices
about security, where appropriate, so that users can judge risks and benefits and make
informed choices (used to emphasize the secure choice over the insecure choice when
coding, installing, upgrading, configuring, and setting up the system.) As the instructor,
make sure you call out these things as part of Best Practices when implementing an ERP
system.
Example of a best practice call out box:
BEST PRACTICES: Before your deployment is complete, be sure to apply the latest
service packs and relevant security patches to your system. Keeping current on the latest
service packs, in particular, is one of most important things you can do when managing
the security of your system.

Instructor Notes
Post-Class Tasks
Post-class tasks can vary depending on the class delivered and the training center
that is used and generally include the following:
• Evaluations – Administer any evaluations required for the class,

including the standard Microsoft Dynamics post-class
evaluation. It is recommended to direct the participants to the
evaluations in the middle of the last day of class so participants
have time to thoughtfully fill out the evaluation.
• Parking lot – Write down any remaining parking lot issues and
then determine how answers will be distributed to participants.
Obtaining participant email addresses and sending out a group
email with follow-up answers is often a simple solution.
• Closure with training center – Make a final visit to the training
center contact person to ensure the training center knows the
class is completed and any final issues can be addressed.

MODULE 1: OVERVIEW
Chapter Overview
The goal of this module is to understand the Distribution and Trade features in
Microsoft Dynamics ® AX 2012 R3.
Timeline
Presentation: 15 minutes
How to Teach this Module

Overview
Explain that the overview module provides an introduction to the distribution and
trade feature areas that are included in Microsoft Dynamics AX 2012.
Distribution is the activities associated with the movement of material, usually

finished goods or service parts, from the manufacturer to the customer. These
activities include the functions of transportation, warehousing, inventory control,
material handling, order administration, site and location analysis, industrial
packaging, data processing, and the communications network necessary for
effective management.
It includes all activities related to physical distribution, and the return of goods to
the manufacturer. Frequently, this movement is made through one or more levels
of the field warehouses.
Trade is the transfer of products from one legal entity to another, as result of
buying and selling.
Display objectives slide.
Discuss each chapter and what features will be covered.
Distributors operate between the line of manufacturers and customers,

such as a retailer. They buy, repackage, resell and distribute and use a
high volume of transactions from order entry through the fulfillment
process.
Display Distribution slide
Review
Close with “In this module I provided the names and content highlights for
all the modules in the Distribution and Trade in Microsoft Dynamics AX
2012 course.
The features described in the modules help companies keep track of the
flow of products across all distribution and production sites; both
Instructor Notes
physically and financially.” Or reiterate how you have addressed all of the
opening objectives and relist.

MODULE 2: OVER AND UNDER DELIVERY

Chapter Overview
The goals of this module are:
• Set up parameters to accept over and under delivery.
• Manage over and under deliveries in sales and purchase order
processing.
Timeline

Overview
Explain that in this module we will review the Over and Under Delivery
feature.
The Over and Under Delivery feature is an effective way to manage small
differences between ordered and received quantities when an order with
only a partial quantity must be closed without administering backorders.
Over/Under Delivery Setup

To avoid unnecessary backorder handling every time that an order is
slightly over- or under-delivered, you can configure AX so that such
deliveries are accepted, if they are within predefined ranges from the
originally ordered quantity. You can then close and fully invoice these
orders.
This functionality will most likely be used for particular kinds of products
that are delivered by weight, in bulk, or in linear feet. These kinds of
products are also low in value and carrying costs, frequently ordered, and
easily sourced. Examples of these items are screws, brackets, and pins.
Before you can use over or under delivery you must enable it for the sales
or purchase process.
Use Demonstration: Set Up Components for Over/Under Delivery.

Instructor Notes
Review Settings
Discuss that to review the settings, if you select Accept overdelivery, you
can receive or ship more products through the packing slip / product
receipt or invoice update than the quantity ordered in the purchase or sales
line.
If you select Accept underdelivery, you can close out the back-order if
you receive or sell fewer products through the packing slip / product
receipt or invoice update than the quantity ordered in the purchase line or
sales line.
Demonstrate Review Over/Under Delivery Settings or use the show me.
Use Demonstration: Use Over/Under Delivery on Sales Order
Use Practice: Use Over and Under Delivery on a Purchase Order/Sales

Order.
Review
Close with “We have now reviewed how Over and Under delivery is an
effective way to manage small differences between ordered and received or
delivered quantities in AX.” Or reiterate how you have addressed all of the
opening objectives and relist.
MODULE 3: CHARGES
Chapter Overview
• Set up a charges group for customers, vendors, and items.
• Add price charges to an item that is dependent or independent of the
item quantity.
• Set up a charges group for customers, vendors, and items.
• Set up charges codes.
• Manually and automatically add charges to a sales and purchase order.
Timeline


Overview
Explain that in this module we will review the charges feature.
Charges are additional costs added to sales and purchase orders such as
freight, transport, postage, insurance, packaging, and fees. The charges
capabilities in Microsoft Dynamics AX 2012 lets companies eliminate
data entry by assigning charges to items, customers, and vendors when
charges frequently occur, or are required.
Working with Charges

Illustrate that charges are costs and fees that you can add to the cost of
items, sales, and purchases according to the setup. The following are
examples of charges:
• Freight
• Transport
• Postage
• Insurance
• Recycling
• Packaging
Review the three ways that charges can be added.
Demonstrate price charges on an item or use the show me.
Use Demonstration Set Up Price Charges on an Item.
Use Practice: Create a Charges Code
Manual Charges
Discuss that when you create a sales or purchase order, you can add
charges to the order header and/or the order lines. Typically, you manually
add charges to a sales or purchase order when the charges apply only to
the specific order.
Demonstrate Manual Charges or use the show me.
Use Demonstration: Add Charges to a Sales Order.
Use Practice: Manual Setup of Charges

Instructor Notes
Automatic Charges
Explain that you can set up AX to add charges automatically when you
buy or sell an item. Before you set up and assign automatic charges, you
can create and set up charges groups. These allow you to group similar
items, customers, or vendors together so that the same charge can be
added to many different orders. Charges groups are optional.
Charges groups are used for the automatic setup of charges. This is
because they classify items, customers, or vendors into groups for which
the same charges apply. The groups are available for selection on the Auto
charges form, and when orders are then created for these groups, the
charges are automatically calculated and applied to the order.
There are three kinds of groups:

• Customer charges
• Vendor charges
• Item charges
Demonstrate Charge Groups and Charges or use the show me items.
Use the Practice: Create a Customer Charges Group
Use the Practice: Setup of Automatic Charges.
Review
Close with “The charges functionality helps companies to perform the following
tasks:
• Add costs to sales and purchases such as freight, transport, postage,
insurance, packaging, and fees.
• Eliminate data entry by:
• Allocating charges to items
• Setting up and using automatic charges
Set up and use manual charges on sales and purchase orders.”

Or reiterate how you have addressed all of the opening objectives and
relist.

MODULE 4: CUSTOMER AND VENDOR

AGREEMENTS
Chapter Overview
• Activate customer and vendor trade agreements.
• Set up customer and vendor trade agreements.
• Describe trade agreement parameters.
• Set up and use supplementary items.
• Describe how to work with sales and purchase agreements.
• Discuss how to create sales and purchase agreements.
• Define sales and purchase agreements.
• Discuss how to use agreements when you create orders.
• Discuss how to follow up on agreements.
Timeline

Overview
Explain that in this module you will discuss how they can use fixed price
or discount agreements with specific customers or vendors for the sale or
purchase of individual or multiple products. This functionality is referred
to as a trade agreement in AX.
In addition we will discuss purchase and sales agreements. Sometimes

these are referred to as contracts or blanket orders.
Activate Trade Agreements

Discuss that before you can use trade agreements, you have to determine
the price agreement combinations you want and activate. AX contains

Instructor Notes
parameters to activate pricing and discount structures. It is possible to

activate trade agreements so that each enterprise can have relevant
structures. You can also deactivate structures not relevant to the
company’s business processes. This feature provides more control for
sales and purchase order processing.
Display Trade Agreement Types slide.
Review the three types.
Demonstrate Activate Price/Discount Form or use the show me.
Display the Trade Agreement Setup Flow slide. Discuss.
Demonstrate Create a trade agreement journal or use the show me.
Use the Practice: Create and Post a Trade Agreement Journal.
Generic Currency and Smart Rounding

Illustrate that generic currency allows for trade agreements to be set up for
one currency, and have an exchange rate applied when you use a trade
agreement for a vendor or customer who uses a different currency. The
default generic currency is defined in the following location: Accounts
receivable > Setup > Account receivable parameters > Prices.
The smart rounding concept that supports psychological pricing, can also
be thought of as a "price ending" based on the marketing theory that prices
have a psychological effect on people. It relates to prices expressed as odd
prices presented as a little less than a round number, such as using 19.99
USD instead of 20.00 USD
Combined with Generic Currency, this feature allows for currency

adjustments on trade agreements to reflect consistent price points. For
example, if there was a currency adjustment which computed a price of
$14.43 and your company prefers to have prices end in “9,”, it would
adjust the price accordingly.
Demonstrate Generic Currency and Smart Rounding or use the show me.
Use the Demonstration: How to Configure and Use a Generic Currency.
Use the Practice: Setup Smart Rounding.
Use the Practice: Using Smart Rounding.

Trade Agreement Parameters

Trade agreement parameters describe the trade agreement discount options
that can be selected in the Accounts receivable and Procurement and
sourcing parameters. The parameters forms are located in:
• Accounts receivable > Setup > Accounts receivable parameters
> Prices tab and
• Procurement and sourcing > Setup > Procurement and
sourcing parameters > Prices tab.
Demonstrate trade agreement parameters or use the show me.
When a product is ordered, complimentary or supplementary items are

frequently required. In Microsoft Dynamics AX, these are known as
supplementary sales.
Demonstrate supplementary items.
Use the Practice: Supplementary items.
Purchase and Sales Agreements

Explain that a sales agreement is a contract that commits the customer to
buy a product in a certain quantity or amount over time in exchange for
special prices and/or discounts.
A purchase agreement is a contract that commits an organization to buy a

product in a certain quantity or amount over time in exchange for special
prices and discounts. When a commitment is to an amount then only a line
discount can be specified.
The prices and discounts of the sales or purchase agreement overrule any
prices and discounts stated in any trade agreements that exist.
Demonstrate purchase and sales agreements. Also list advantages and

tasks that are possible with agreements.
Use Demonstration: Configure Agreement Classifications
About Agreement Commitment Types

Illustrate that agreement commitment types include product quantity
agreements, product value, product category value, and value. Each of
these types outlines different pricing or discount constraints.
Display the Agreement Commitment Types slide.

Instructor Notes
Product Quantity Commitment - you agree to purchase specific item

numbers for a specific quantity. You can enter a specific unit price and a
discount percentage on the line.
Demonstrate product quantity commitments or use the show me.
Category Commitment - commit to Purchase or sell in a specific

procurement or sales category for a specific amount. The discount is for a
specific discount percent that will be applied to the order.
Use Demonstration: Create a Product Category Commitment (Sales Order)
When you create sales lines manually in a sales order that is based on a
sales agreement, Microsoft Dynamics AX searches for lines within the
sales agreement that match information specified on the sales order lines,
such as the product and receipt date.
If any matching sales agreement lines are found, links will be created
between the lines of the sales agreement and the sales order, and the
information is transferred to the sales lines.
However if an order line is added where no matching agreements are

found, and the line is changed to match the agreement, then the
commitment must be manually applied by clicking Update Line > Create
link.
Demonstrate manually linking a Sales Order to an agreement or use the

show me.
Use Practice: Set Up and Follow Up a Sales Agreement.
Review
Close with “Customer and Vendor agreements introduced the following:
• The four types of trade agreements and how trade agreements are
used and created from the price/discount groups and from a line in
the Customer, Vendor or Released products form.
• The setup and use of price/discount groups.
• How discounts are handled for lines of a specific sales or purchase
order, when both line and multiline discount agreements apply to
the sales order line.
• The setup and use of supplementary items.
• How to set up purchase and sales agreements for both customer
and vendors. Also, how to use agreements and manually apply and
automatically apply an Agreement to a purchase and sales order.

• How customer and vendor agreements are fixed price agreements

set up for one or more customers or vendors for the sale or
purchase of individual or multiple items.”
relist.

Instructor Notes
MODULE 5: ITEM ARRIVAL AND REGISTRATION

Chapter Overview
• Register product receipts.
• Use the Arrival overview form to start the receipt process.
• Create and process an item arrival journal.
Timeline

Overview
Item arrival and registration involves the process after the creation of a
purchase order and how you plan for the arrival of the items ordered. In
AX, there is a specific way to process the receipt and make it available to
be consumed, which is called “item registration.”
Item Registration Setup

In AX, all products must be assigned an Item Model Group. In that model
group, there is a check box to require registration for a product when
received. When checked, registration will be required in order to update
the physical inventory.
Display Item Registration Flow slide.
Use the Demonstation: Configure Item Model Groups for Item

Registration
Item Arrival
Item Arrival in AX is the process of controlling and planning for incoming
shipments of goods ordered through Purchase Orders. When a company is
constantly receiving goods at their dock, it is imporant that there be a way
in the system to plan for and track the incoming goods.
The Arrival Overview form displays all the expected receipts of goods that
have been ordered. The intent is to filter the form to find the transactions
that will be received. You can enter dates, warehouses, vendors, items,

form of delivery, or document ID’s such as purchase order numbers. By

filtering the form in this manner, the receiving department can have an
idea as to when and where shipments will be received, as well as knowing
which particular products are being received from particular vendors.
A valuable feature of this process is the use of templates. A template can

be used to filter the form by commonly used criteria. For example, if a
particular vendor’s shipments are important to your company, you can set
up a template to quickly see when shipments are expected to arrive from
that vendor.
From the form the item arrival process can be started by simply selecting
the shipment listed and then clicking on Start Arrival.
Demonstrate the Item Arrival form or use the show me.
Use the Demonstration: Create a New Template for Item Arrival.
Processing Arrivals
Illustrate that when an item arrives it can be processed by simply selecting
the shipment listed in the Arrival Overview form. Once the shipment is
selected all you have to do is click Start Arrival to kick off the process.
Demonstrate processing arrivals or use the show me.
Use the Practice: Manage an Item Arrival.
Review
Close with “Items are recorded during item receipt and production input. When
you post an item arrival journal, the items will change status from Ordered to
Arrived or Registered.
When you set up inventory model groups, in the Registration requirements

field, you can indicate that item receipts must be registered upon physical
updating.
Registration of an item indicates to the system that it is now in the warehouse. If

receipt transactions have already been updated to Registered it will not be
possible to use the item arrival journal processes. However, the product receipt
posting process can still be used to update product cost in the inventory.
If the items are stocked by using pallet trucks, the items receive the status
Arrived. Otherwise, their status is Registered.
After the items arrival journal is posted, the inventory must be put away into
either a bulk or picking location.

Instructor Notes
The Pallet transport form is used to process pallet transports online. New refill
pallet transport functionality ensures constant full on-hand inventory at a picking
location.”
relist.

MODULE 6: QUARANTINE MANAGEMENT

Chapter Overview
• Set up a product to use both quarantine management
• Process an item arrival journal with a quarantine order
• Create a quarantine order manually and automatically
Timeline

Overview
Discuss that in AX, you can manage items in quarantine, while the item is
inspected for product requirements or compliance with, for example,
company, health, or regulatory legislation.
Display Quarantine management slide and discuss.
About Quarantine Setup

Illustrate that the setup parameters of a quarantine warehouseand the item
model group determine if items are automatically are placed in the
quarantine warehouse when they are received or if each shipment will be
treated differently and items will be manually quarantined or not
quarantined at all.
Demonstrate Configure Quarantine Warehouses or use the show me.
Use the Practice: Create Quarantine Inventory
Quarantine Order Process

Explain that you can use quarantine orders to control items in quarantine,
for example, for quality control or perishables. You can create quarantine
orders either automatically or manually.
To create automatic quarantine orders, you must link the item to an item
model group that is configured for automatic quarantine. By doing this, all
receipts for that item are automatically posted to the quarantine

Instructor Notes
warehouse. If the item is only occasionally placed in quarantine, place the

item into the quarantine warehouse manually.
Quarantine orders can be created manually without requiring that the

current item be set up for quarantine management in the item model
group. However, it will correspond to a transfer journal, and at least one
quarantine warehouse must be set up.
Display the Quarantine order Process slide.
Demonstrate Create a Manual Quarantine Order or use the show me.
Use the Demonstration: Generate an Automatic Quarantine Order.
Demonstrate process a quarantine order or use the show me.
Use the Demonstration: Run the Items in a Quarantine Report
Use the Practice: Purchase to Quarantine Inventory
Inventory Transactions on Quarantine Items

Whenever an item is in Quarantine, inventory transactions are created
while in all statuses except for Reported as Finished. These transactions
can be viewed by going to the Released Products form and viewing
Transactions in the View group on the Manage Inventory tab.
Because AX is an integrated system, transactions will be recorded when a

status changes during the quarantine process. This is to provide a complete
record of every activity that occurs for an item. For quarantined items,
when an item is put on a quarantine order, it has a status of created, and
this records transactions on the items. When it moves to Started, more
transactions occur and the original transactions while in Created status are
modified. As noted earlier, when the order is Reported as Finished, no
transactions occur. Finally, when the order is Ended, the final transactions
are created.
Dsiplay Transaction Flow for Quarantine Orders slide.
Review
Close with “Quarantine management helps a company control incoming
items. It also prevents items from entering a production environment or
from being sold while they are waiting for quality control or are in a
controlled status.

Use quarantine orders to control items in quarantine, for example, for

quality control or perishables. There are two ways to enter items into
quarantine; Manually or Automatically.
After the item is in the quarantine warehouse, by either the manual or the
automatic method, the procedures for quarantine orders are similar.
This module reviewed the various quarantine order statuses and how the
transactions are related to each status.”
relist.

Instructor Notes
MODULE 7: VENDOR RETURNS

Chapter Overview
• Create a vendor return by using a negative quantity, the create credit note
feature, and the purchase order type returned order.
• Return a group of items with multiple serial and batch numbers to a

vendor.
Timeline

Overview
Explain that this module discusses vendor returns. Every company,
regardless of size, is likely to have a need to return an item to a vendor.
There can be damaged items, the wrong items may have been shipped, or
the need for the item may have been affected due to a late shipment. There
are several different ways within AX to process a vendor return, and they
will all be discussed in this module.
Vendor Return Methods

Disscuss that there are several different modules in AX that are affected
by a vendor return: Inventory, General Ledger (GL), Account Payable
(AP), and Procurement. The various different methods all issue a vendor
credit note when items are returned to the vendor.
Display Vendor Returns slide.
Use Demonstration: Create a Negative Quantity Purchase order
Copy a Purchase Order for a Vendor Return

Another method you can use to issue a vendor credit note is to generate
purchase order lines by copying a previously posted purchase invoice. The
copy feature is time saving because it prevents you from having to enter
the original purchase information again.
Use this method when you must match a credit note to an original
purchase order. Use the original pricing when you copy the original

purchase order. This eliminates any variance that can occur if the purchase
price changes after the original order is invoiced.
In addition, when you copy the purchase order, the system makes sure that
the return quantity does not exceed the original quantity received from this
purchase order. It also creates marking in inventory for offsetting the cost
effect of the vendor invoice.
This process is typically used by accounting to process financial impact of

the return. The physical return process is usually handled by using
warehouse management which you can learn about in the warehouse
management course.
Demonstrate copy a purchase order for a vendor return or use the show
me.
Return Order Type

Illustrate that the third and final way to issue a vendor credit note is to
create a purchase order by using the order type Returned order. This
method is commonly used when the vendor issues a Returned
Merchandise Authorization number and that number is needed for tracking
purposes. The number would act as a pre-approval to return the goods.
One feature of these types of vendor returns is that when you use it, it
checks that the quantity is negative. This minimizes data entry errors.
Create Vendor Returns for a Serialized Items

Explain that when you return a serialized item to the vendor, you must
specify the item's serial and batch number on the purchase return order
line or perform a reservation against multiple batch or serial numbers. This
makes sure the correct serial/batch number will be removed from
inventory and also indicates to the vendor which serial/batch numbers are
returned.
To return items to a vendor, the same three options are available for
serialized and non-serialized items:
• Negative quantity
• Copy the original purchase invoice
• Returned order purchase type
There are several items that you may order that contain serial numbers
which, for tracking purposes, the vendor will want detail on the return
order.
Similarly, vendors can supply batch numbers with delivered goods and
may want batch numbers recorded on return orders.

Instructor Notes
To process these returns, we create Reservations in order mark the items

so that they cannot be used or sold in error.
Demonstrate vendor returns for serialized items or use the show me.
Use Demonstration: Create a Vendor Return With Multiple Batches.
Use Practice: Working with Vendor Returns.
Use Practice: Complete a Vendor Return Using Returned Order Type.
Review
Close with “Returning an item to a vendor is handled like selling from
inventory to the vendor to whom the items must be returned.
The three ways to create a vendor return are as follows:
• Negative Quantity: A return action that is made when there is no
specific reference to the original purchase order requiring the
RMA number.
• Create credit note: A copy of the original purchase order
information.
• Returned order purchase order type: The only vendor return
that requires an RMA number and a Return action.
To return items to a vendor, the same three credit note options are
available for serialized and non-serialized items.”
relist.

MODULE 8: SALES QUOTATIONS

Chapter Overview
• Define setup information for sales quotations.

• Work with sales quotations.
• Define various sales quotation functions.
Timeline

Overview
Explain that this module discusses Sales Quotations. Sales Quotations in AX are
a valuable tool for presenting prices and terms to existing or potential customers.
The tools in AX allow you to easily create quotations through templates, modify
them as needed, and deliver them to customers. Price simulations can be done to
take a look at how discounts or different pricing affects the margin.
Display objectives slides.
Issuing a quotation resembles the process for issuing a sales order. Most
functionality found in the Sales order form is also available in the Sales
quotation form. Quotations accepted by customers are converted to sales
orders.
Display the Uses of Sales Quotations Slide.
Sales Quotation Setup

Illustrate that before you start to work with sales quotations, you must
make some quotation-related settings like number sequences, default
values and so on. This lesson describes how these settings are handled.
The following areas need to be set up for Sales Quotations:

• Number sequences
• Setup Tables
• Default Values
Demonstrate sales quotation setup or use the show me.

Instructor Notes
Working with Quotations

Demonstrate create and process a sales quotation or use the show me.
Use Practice: Create a Sales Quotation and Convert it to a Sales Order
Use Demonstration: Create and Use a Sales Quotation Template
Use Practice: Create a Sales Quotation Template
Use Practice: Mass Create Quotations
Copying Sales Quotations

Discuss that there are several features that are available with Sales
Quotations that can be of added value to you.
The first one we’re going to look at is the Copy from all feature. Similar to
the template functionality, this is intended to be on a smaller scale, when
you may want to only copy from one quote to another. When doing this,
you can select which data from which quotation you want to copy.
Demonstrate copying sales quotations or use the show me.
Trade agreements and Supplementary Items

Display Trade Agreement Discount Types slide.
Trade agreements can be applied by clicking on the General tab and

accessing Trade Agreement in the Customer Group.
Also included on the General Tab are Supplementary Sales Items. If there
is a need to add supplementary items, by clicking on this option any items
already set up can be selected or you can set up additional items as
needed.
Work with BOMs on Sales Quotations

Explain that if you are quoting an item that is associated with a Bill of
Material (BOM), the BOM can be viewed or updated to show the effect of
quantity changes on costs. While on the line of the item, you can select
Update Line and you will see an option to Calculate Based on BOM or
formula.
Clicking on this will bring up a window where you can modify the
quantity and see the effect on the cost. You can also recalculate prices if
raw material costs increase but are not updated in the system. Finally, the
quantity can be changed and the cost difference can be viewed as well as
the effect on margin based on manufacturing requirements.

Use Demonstration: Add Multiple Ship to Addresses to a Sales Quotation
Additional Sales Quotation Features

Illustrate that there can be a need at times to insure that you actually have
the items in stock that you are including in a sales quotation. To do this, in
the Master Planning module, be sure to check the box to Include on Sales
Quotations in the setup screen for Master Planning. This way, when
running Master Planning, the system will check to see if the items being
quoted are available if the quote is won.
Demonstrate price simulations or use the show me.
Review
Close with “This module introduced the Sales quotations process, and
included information about the following:
• Setting up the Sales quotation.
• Creating, updating, and deleting sales quotations.
• Various sales quotation functions.
It also described how quotations resemble sales orders in their appearance

and the steps that are taken to create them. The reasoning for this is that
when a quotation is accepted by a customer it can be easily converted to a
sales order at the click of a button.
This module also described various functions that are common between
sales quotations and sales orders.”
relist.

Instructor Notes
MODULE 9: ITEM RESERVATIONS

Chapter Overview
The objectives are:
• Set up Inventory and warehouse management and Accounts

Receivable parameters for reservations.
• Perform a manual reservation for on-hand and ordered quantities
of an item.
• Perform an automatic reservation for on-hand and ordered
quantities of an item.
• Identify how Primary stocking for dimensions affects automatic
reservations and re-reservations.
• Perform a reservation of the type Explosion.
• View reservations and print a picking list and packing slip.
• Use the Lock reservation functionality.
• Cancel a reservation.
• Change multiple order reservations.
• Pick a reserved item for a sales order.
Timeline

Overview
Explain that this module will discuss Item Reservations in AX. We will go over
the objectives and how Item Reservations are used through the course of normal
business activity.
Display objectives slide and review.
Item Reservations
Discuss that we perform reservations to reserve Inventory quantities for a
specific sales order. When inventory is reserved, it cannot be withdrawn
from the warehouse for other orders unless the inventory reservation, or
part of it, is canceled.
When you perform a reservation the quantity is reserved against on-hand

inventory. Depending on the Inventory management parameters settings,
quantities can also be reserved against ordered, but not yet received
quantities of items. When you perform a reservation the quantity to be

reserved can be the total order quantity, a partial order quantity, or split
across multiple lots.
Display Why Reserve Inventory slide.
Reservations apply to on-hand inventory, not to a transaction. This means

reservations are created on lines in the On-hand form and not on lines in
the Transactions form. Because there are on-hand inventories for each
dimension value, a reservation can be created on the on-hand inventory
that is specified by the issue transaction dimensions. However, if the
Reserve ordered item parameter is selected, reservations can also be
created on ordered but not yet received items.
Manual Reservations
Illustrate that when you create a sales order, initially the default reservation type
you set up in Accounts Receivable parameters will apply to each line. You can,
however, override the default type for each line.
Demonstrate manual reservation or use the show me.
Use Practice: Manual Reservations
Automatic Reservations
Discuss that you can use the reservation type Automatic to indicate that
the system should automatically reserved against the item's available on-
hand inventory. If there is insufficient on-hand inventory, and the
Reserved ordered items parameter is selected, AX will also make
reservations against quantities of the item with the status Ordered.
Demonstrate automatic reservations or use the show me.
Use Practice: Automatic Reservations
Automatic Reservation and Selection of Batches

Typically, automatic reservations are made on the oldest batch number. The
oldest batch number is defined as the batch number with the lowest dimension
values sorted in alphanumeric order.
When batches are selected for automatic reservation and there is not
enough inventory on hand to reserve the items, there is a parameter to
Reserve Ordered Items. That is, items that have been purchased but not yet
received can be reserved in this process.
There are various options on the item model groups form which can affect
There are two options on which items will be reserved. First, it can be

Instructor Notes
done on the PO with the oldest date. The other option is reserve the item
backward from ship date, meaning the receipt with the most recent date is
reserved, FIFO functionality. When using batch number tracking,
reservation options exist to place logic on the dates assigned to the batch
number
Display Batch Selections in Automatic Reservations slide and review.
Use Demonstration: Configure Settings For Primary Stocking
Explosion Reservation
Explain that the Explosion reservation works according to the master planning
item coverage setup. For example, when a requirement is far in the future,
reserving the sales order line against a purchase order close to the current date,
the system might reserve on-hand inventory for any orders that might be closer to
the purchase order delivery date. Instead, master planning searches for a purchase
order closer to the ship date for the sales order line.
The number of days that master planning looks back is defined in the Positive
days field located in the Master planning > Setup > Coverage > Coverage
groups > General tab.
Display Examples of Explosion Type Reservations slide.
View Reservations
Illustrate that there are several ways to view reservations on items or
orders. How to select the way to view the reservations depends on the
information that you want.
The reasons for viewing reservations include the following:

• Answer questions about available items.
• Inquire about delivery dates.
• View requirements for new purchases.
• View how items, on-hand or ordered, are reserved for various orders.
Demonstrate viewing reservations or use the show me.
Other Reservation Actions

Explain that locking a reservation means that we will “hold” on to the
inventory dimensions where the inventory dimension does not have
primary stocking selected in the storage dimension group that is attached
to the product. If you’re trying to reserve a specific product batch number
for a specific sales order than locking is the functionality that you would
use.
Reservations can be canceled on items and orders. For example,

reservations can be canceled if deliveries are unfulfilled or canceled, or if

the items cannot be delivered on time. By canceling reservations in this

situation, inventory is available for allocation to customers waiting for
goods.
Reservations can also be canceled if existing reservations must be re-

prioritized. For example, reservations can be canceled for smaller, lower
priority orders to be able to deliver more important orders.
Use Demonstration: Lock and Cancel a reservation
Batch Reservation
Batch reservations are used when you want to allocate one or more batch
numbers to a single line on an order. For example, I have two pallets of
flour in the warehouse one with batch number 1000 and one with batch
number 1001. Next, a sales order is placed for 150 bags of flour. Each
pallet holds 100 bags of flour. So, I need to reserve 1 full pallet against
batch number 1000 and one half pallet against batch number 1001.
Demonstrate batch reservations or use the show me.
Picking Reserved Items

Illustrate that you can use a manual one-step pick to select the correct
items from the warehouse. If a reservation has already been performed on
a sales order the Pick form will suggest to select the reserved items from
the correct locations, batches, serial numbers, and so on. You can also
reserve inventory when you generate the picking list by clicking Inventory
> Reservation from the Lines tab.
Use Demonstration Reserve Serialized Inventory
Review
Close with “ Item Reservations reviewed how to use reservations in
Microsoft Dynamics AX 2012 and examined how to perform the
following tasks:
• Manual reservations, Automatic reservations, and Explosion
reservations from a sales order.
• View reservation information from the Items form and from the Sales
order form.
• Lock reservations.
• Cancel and change reservations.
• Pick reserved serialized items.
Reservations are performed to make sure items sold are available for
delivery to the customer at the required time, and to make sure that the
correct inventory is issued.”

Instructor Notes
relist.

MODULE 10: SALES ORDER PICKING

Chapter Overview
• Explain setup and parameters that affect the Picking registration process.
• Set up the Release sales order picking form and allocate on-hand
inventory for sales order picking.
• Set up and process an automatic registration and one-step pick.
• Register serial and batch numbers during the picking process.
• Set up and use the picking workbench to process picking.
• Work with the transaction in the Pick form to edit, reverse, and split
picks.
Timeline

Overview
Explain that in the Sales Order Picking module we will discuss the
features that support item picking registration, and how to perform the
following tasks in Microsoft Dynamics® AX 2012:
• Set up the sales picking process.
• Process a sales pick.
• Pick orders that include serial numbers and batch numbers.
• Process picking by using the picking workbench.
Enable Sales Order Picking and Setup

Illustrate that there are several settings that control how the picking
process will function and whether it is mandatory or a one or two-step
process.
These setting include
• Dimension groups: Set up product, storage, and tracking
dimensions requirements for picking.
• Item model group: Control the registration requirements.

Instructor Notes
•Accounts receivable setup parameters: Set up transactions for

automatic picking.
Demonstrate sales order picking setup or use the show me.
Sales Order Picking Processes

Discuss that there are several settings that control how the picking process
will function and whether it is mandatory or a one or two-step process.
These setting include

• Dimension groups: Set up product, storage, and tracking
dimensions requirements for picking.
• Item model group: Control the registration requirements.
• Accounts receivable setup parameters: Set up transactions for
automatic picking.
Display the Picking process slide.
Release Sales Order Picking

Explain that the Release sales order picking functionality helps warehouse
employees gain an overview of the sales orders that are to be released for
picking, based on actual availability of items and considering customer service
priority. By using this platform for the picking process, you are ensured that only
picking lists for items in stock are created.
There are two forms to make the picking process easier: Release sales order
picking for sales orders and Release transfer order picking for transfer orders.
Before you start using the release sales order picking form, you may want to
setup customer classification groups.
You can use customer classification groups to flag customers according to

service priority. If back orders exist for sales order lines, one of the criteria that
you can use to determine which sales orders must have quantity available
allocated to them is the customer classification group that you attach to the
customer for the line.
Demonstrate release sales order picking or use the show me.

Automatic Registration of a Pick
Illustrate that you can set up a pick to be automatically registered by
selecting Completed in the Picking route status parameter in the Account
receivable parameters form.
Automatic registration of a pick means that a sales order can continue to

the Packing slip update after you post the Picking list because the Picking
list registration step is automatically completed.
Demonstrate automatic registration of a pick or use the show me.

Manual Registration of a Pick

Items that require a manual documentation of dimension values, such as
serial or batch numbers follow a one-step or two-step picking process.
The manual one-step process: You can only perform this process from the
Sales order. From the sales order line, you enter the Pick form, where you
can enter the dimension values and pick the products.
The manual two-step process: You can use this process to assign a picking
task and then perform the physical pick. The process involves:
• Posting and printing a picking list of items to be picked in the
warehouse.
• Registering the actual dimension values and posting the pick.
Use Demonstration: Manually Register a Pick.
Item Pick Registration of Serialized and Batch Inventory

Explain that serial and batch numbers are inventory tracking dimensions
and can only be allocated to items, where the tracking dimension group
allows for it.
When the dimension values Serial number and Batch number are
activated, you must specify them when picking, unless Blank issue
allowed is activated for the dimension.
When the Blank issue allowed check box is selected, it prevents the
specification of the dimension when the physical issues are updated. If the
activate in sales process check box is selected on the tracking dimension
group which is used on the item you can use the Capture serial number
form to register the serial numbers for the sales order. For more
information refer to supply chain foundation.
Demonstrate item pick registration of serialized inventory or use the show

me.
Use the Practice: Item Picking and Registration of Serialized Inventory
Picking Workbench Setup

Discuss that the picking workbench allows you to create pick lists in a
more streamlined interface. When you create a new picking wave session
you can specify attributes such as maximum orders, lines to include,
delivery dates, modes of delivery, payment methods, and warehouse for
order selection. After you create the wave, you can review the picked

Instructor Notes
lines and print the picking batches. The wave creation attempts to
automatically reserve inventory at pick wave creation, or use the inventory
allocation that was done at sales order entry. When inventory cannot be
reserved messages are displayed. You can setup the picking workbench to
run in batch mode to support the execution at regular intervals. The
picking workbench can also be used to generate suggestions for boxing of
the picked goods.
There are several things that must be set up in the system before you begin
picking. The setup of these components in the system will control how
picking is processed.
Demonstrate picking workbench setup or use the show me.
Boxing logic is a part of the process of releasing items for picking and
grouping items on a picking route. If an item requires packaging, then
boxing logic can help determine the smallest box for the items to most
efficiently fit into. Boxing logic is designed to select a suitably-sized box,
and optimize the maximum capacity of that box, for the set of items on a
picking route.
After you set up boxing logic, you can define the dimensions and boxing
requirements of an item. The picking and shipping functions will then
determine whether multiple items can be boxed together dependent on the
box size requirements. For example, if you have 10 items to be shipped to
the same address, it may be optimal to pack them all together in a
medium-sized box, instead of having them shipped separately in 10 small
boxes. A box name will be assigned to the picking route, and the picking
routes will be split per box. Alternatively, if you do not want items to be
boxed, such as items that have already been suitably package, then select
the Ship alone check box for the item. This means that the item is already
suitably packaged by itself and should not be put into another box.
Boxing logic automatically finds the most efficient way of boxing items
and factors in weight, volume, and dimensions. For example, 90 items
would be packed together in a single appropriately-sized box together with
packing materials, instead of three boxes of 30 items.
Demonstrate boxing logic or use the show me.
Run the Picking Workbench

Once you have completed the set up for the picking workbench and
created (and completed) some sales orders, you can run the picking
workbench. When you run the picking workbench, the system will search
for orders that match the criteria entered and then try to reserve the

inventory. If the inventory can be reserved, then a picking list will be

generated.
Demonstrate run the picking workbench.

Edit, Reverse, and Split a Pick
During the picking process, you can work with a transaction in the Pick
form.
To activate the attribution of various Inventory dimension values, a picked
line can be Reversed , Edited , or Split .
To update a pick on a sales line, you must first reverse the transaction.
Demonstrate reversing a transacting or use the show me.
Use the split function when items on one sales order line must be divided,
for example, when:
• Picking both serial and batch numbers.
• Picking lines from several warehouses.
Demonstrate spitting a pick use show me.
Use Practice: Edit, Reverse, and Split a Pick
Review
Close with “In the Sales Order Picking I described the sales order picking
process which is a multi-step process that is used to perform the following tasks:
• Set up item picking registration methods.
• Register a pick, manually or automatically.
• Edit, reverse, or split a pick.
• Perform release sales order picking.
Sales Order Picking also showed how sales order picking provides a business
with an efficient way to make sure items are tracked before they are sent to their
customers.
The Release Sales Order Picking lesson provided an overview of the sales orders
to be released for picking, based on the actual availability of items. A business
can use release sales order picking to consider customer service priority and to
allocate quantities of on-hand inventory for picking.
In addition, we reviewed how you can use the picking workbench to mass pick
sales orders and manage picking batches and printing more efficiently.”
relist.

Instructor Notes
MODULE 11: CUSTOMER RETURNS

Chapter Overview
• Set up reason codes, disposition codes, and charges for customer

returns.
• Work with disposition actions.
• Create a return order and locate the Return order form.
• Process the arrival of a return order.
• Handle returned items in quarantine inspection.
• Create a replacement order.
Timeline

Overview
Explain that this module will discuss the functionality of Customer
Returns in AX.
Customers can return items to a company for various reasons, such as an

item is defective, or an item does not fulfill the customer's expectations.
The return process starts with a request from a customer to return an item,
and progresses to creating a return order in AX.
The customer returns scenarios in this lesson show how to create, confirm
the arrival of, and inspect the returned items. The final two scenarios show
the final procedures of processing the sales order and updating the return
order.
Set Up Customer Returns

Discuss that there are several components to setting up customer returns. The
components are used to determine how and why the customer is returning
products and there are configurations that allow you to charge back a customer
for the return depending on your business policy.
• Return reason codes

• Disposition codes
• Disposition actions
• Miscellaneous charges
Display Customer Return Setup Components slide
Demonstrate create reason codes and charges or use the show me.
Dispositions Codes
Explain that there are several components to setting up customer returns.
The components are used to determine how and why the customer is
returning products and there are configurations that allow you to charge
back a customer for the return depending on your business policy.
Demonstrate disposition codes or use the show me.
Create a Return Order

Discuss that the return order resembles a sales order and is characterized
by a status that indicates what is processed on the return order.
Display Return Order Process slide.
Demonstrate create a return order or use the show me.
Use the Practice: Create a Return Order.
Item Arrival and Receipt Registration

Illustrate that when a customer returns items to you, you can use the Item
arrival journal to register the receipt of item. You can create an item
arrival journal manually, or by using the Arrival overview form.
When the status of the return order in the Arrival overview form is
Completed, it means journals are created and are ready to be registered.
Item registration is performed from the Item arrival journal. This is
accessed from Inventory management > Journals > Item arrival > Item
arrival.
On the journal lines, the user can perform the following tasks:
• Send the returned items to quarantine
• Apply a disposition code
• Split an arrival registration
Demonstrate item arrival and receipt registration or use the show me.

Instructor Notes
Returns for Not Stocked Products

Explain that sometimes, a not stocked item is returned by the customer to
the warehouse. It will be shown in the Arrival Overview form. A
disposition code must be entered. When you Start Arrival or the time, it
item receipt status will change to Registered. But an item arrival journal is
not created.
You will need to generate the packing slip for the item by using the Return
Order Form.
Not stocked items are treated the same as normal items when identified by
using only a sales category, except for the following:
If a not stocked return product comes in to the warehouse, it will be

displayed in the Arrival overview form. The disposition code must be
entered on the line of the Arrival overview form.
When you click Start Arrival for a not stocked item, the item receipt status
will change to Registered. However, an Item arrival journal is not created.
The user then must generate the packing slip for the item, by using the
Return order form.
Not stocked items and goods identified by using only a sales category are
treated basically the same as normal items, with the following exceptions.
• Warehouse arrival follows the pattern of "Direct registration".
• Only the following disposition actions are available: Credit , Reject
and Scrap
Use Practice: Process a Return Order
Use Practice: Generate the Packing Slip and Invoice for a Return Order
Quarantine Orders
Explain that at times, Return Orders may need to be inspected to insure
that it is acceptable condition. This requires applying the Quarantine Order
process to the return item.
When the receiving supervisor determines that the return order needs to be
inspected, the Quarantine Order is selected on the Item Arrival and when
posted, it will go to the Quarantine Warehouse for further inspection. This
can be a decision on each order or it can be done automatically on all
orders.
Use Demonstration: Use Quarantine with a Return Order

Replacement Orders
Illustrate that if your customer returns an item that is defective or
incorrect, you can create a replacement order to use to send the new items
to the customer.
Typically, replacement orders are created after a product is returned and

inspected. However, when an item must be replaced before it is returned,
or when the original item will not be returned, you can create an Up-front
replacement order immediately after you create a return order. An Up-
front replacement order can only be created for return orders with status
Created.
You can use a replacement order to support immediate shipment of a

replacement item to a customer. However, the replacement order has the
same functionality associated with a sales order, and it can support many
RMA situations. Some other purposes for a replacement order line item
include the following:
• Configuring a custom product as the replacement item, such as
configuring a modeling-enabled item.
• Identifying the replacement components, such as exploding an
item’s bill of material to identify the components that should be
sent to the customer.
• Creating a production order to repair a returned item. When you
create the production order (linked to the replacement order line
item), you can select an approved BOM/route version that reflects
repair activity. After you create the production order, you can also
specify the needed repair activity in the order-dependent
bill/routing information, and issue the returned item to the
production order. The calculated sales price provides one basis for
charging repair activity to the customer.
• Creating a direct delivery purchase order for sending the
replacement from a vendor.
• Identifying supplemental items that should be included with the
replacement item.
Demonstrate replacement orders or use the show me.
Review
Close with “Customer Returns discussed how to set up and use the returns
functionality in Microsoft Dynamics AX 2012 R3.
Companies can use the Customers Returns functionality to process

customer returns more quickly and efficiently, and to improve customer
service and customer satisfaction.
This module also showed how to perform the following tasks for
Customer Returns:

Instructor Notes
• Setting up Customer Return information by using return reason

codes, return reason code groups, disposition codes, disposition
actions, and return charges.
• Generating packing slips and invoices for the return orders.
• Processing return orders for item arrival by using disposition
codes, quarantine orders, and replacement orders.”
relist.

MODULE 12: COMMISSIONS

Chapter Overview
• Set up the elements of a commission agreement.

• View commission transactions from a financially updated sales order.
• View the commission transactions created from item returns.
Timeline

Overview
Explain that this module covers how we setup, post, configure, and
calculation sales commissions as well as the impact on returns.
Display objectives slide and review
Commissions introduce the steps to set up sales commissions for a Sales

team that is based on a percentage of revenue or contribution margin. The
module also describes how to inquire on the calculated commissions from
posted sales transactions and item returns.
Set Up a Commission
Discuss that commissions in AX are based on the sales line when a sales
order is invoiced. This way, each line represents a combination of the
customer, sales representative for that customer, along with the item sold.
The setup for commissions involves 5 separate forms, found in Sales and
Marketing > Setup > Commissions.
Display Commission Setup Components slide and discuss.
Commission Calculations
Illustrate that with a combination of the data set up in the forms we just
saw, commissions can be calculated. For example, there could be a
customer group for all customers with greater than USD 1 MM expected
sales and sales groups of all senior sales people who earn a specific sales
commission of 3% of revenue on sales of all items greater than USD 500
list price.

Instructor Notes
Once a commission is calculated, all the accounting entries will need to be

made.
Display Commission Posting slide.
Demonstrate configure commission calculations or use the show me.
Commission Calculation Hierarchy

Display the Calculation Hierarchy slide and review.
All – highest level, applies to all items if the item/group does not belong to
any other level
Group – 2nd level, supercedes any calculation listed under ALL if
customer/item/sales is a member of a group.
Table – lowest level, if customer/item/sales is listed specifically,
calculation is done regardless if a member of a group
Use Practice: Commision Calculations
View Commission Transactions

Discuss that this lesson covers how to create and process sales orders and
view their associated commission transactions.
You can only view commission transactions that are financially updated.
Demonstrate view commission transactions or use the show me.
Use the Practice: Commission Transactions
Commission Transactions for Return items

Explain that as you might expect, after a sale has been processed and a
commission paid based on that sale, if the customer eventually returns that
item, it will affect commissions.
If a customer decides to return an item for credit, the sales transactions

created from the Sales order are credited. If commission transactions are
set up to be created for the sales order, these are also credited when the
return order is invoice updated.
The order taker will create a sales order of type Returned order and create
a credit note for the customer. The commission earned on this transaction
must be reversed.

Review
Close with “This module described the Commission sales order setup and
how to create sales order commissions. Specifically, it covered how to set
up Commission customer groups, Commission item groups and
Commission sales group.
It also discussed how to calculate a commission based on commission

calculation lines, and how to create and view commission transactions for
sales orders and item returns.
Additionally, this module showed how the sales order commission system
functionality is used to encourage sales for particular groups of
salespeople, promote sales of particular items or groups of items, and, or
sales to particular customers or groups of customers.”
relist.

Instructor Notes
MODULE 13: TRANSFER ORDERS

Chapter Overview
• Set up transfer orders.

• Create a transfer order.
• Pick items before transfer between warehouses.
• Transfer items between warehouses.
• Shipping and receiving a transfer order.
Timeline

Overview
Explain that the Transfer orders feature is a process-oriented functionality
set that you can use to manually handle and master schedule created
transfer orders between warehouses in the same company. The Transfer
orders feature complements the Transfer journal functionality in AX.
Set Up Transfer Orders

Discuss that before transfer orders can be created, the following elements
must be set up for the transfers being made between warehouses:
• Create a transit warehouse.
• Attach the transit warehouse to the From warehouse used in the
Transfer order chain.
Demonstrate set up transfer orders or use the show me.
Use the Demonstration: Delivery Date Control with Transfer Orders.
Using the Transfer Orders Form

Explain that you can create transfer orders manually in the Transfer
orders form, or automatically through master scheduling.
The form is the heart of the process. The header defines the settings that
apply to the lines such as:
• From warehouse and To warehouse
• Reservation

• Shipments settings
The lines specify the items and quantities to be transferred. If needed, you
can override settings that have come from the header.
Also, the form has direct links to the picking list, shipment, and receiving
functionality.
Demonstrate using the transfer orders form or use the show me.
Use Practice: Create a Transfer Order
Picking Items for a Transfer Order

Illustrate that transfer order picking follows a similar process to sales
order picking. You can use one of the following three methods:
• Automatic - Use when a response to the picking list is not
necessary, for example, when the items sold are always in stock, or
when users do not have to specify different dimension values, than
what is on the transfer order line or what is reserved.
• Manual – One Step Process - Use this process if you want to enter
the dimensions and register the pick from the transfer order line.
• Manual – Two Step Process - Use when you want to assign a
picking task and then perform a physical pick.
Demonstrate picking items for a transfer order or use the show me.
Use the Demonstration: Release Transfer Order Picking.
Shipping and Receiving a Transfer Order

Discuss that you can use the Shipment form to define what will be
shipped to the receiving warehouse. You can also use the Shipment form
to edit shipment lines, determine what quantities will be shipped, when the
lines will be posted, and to print shipment reports. If you are using
Warehouse management to process receipts you can use the Arrival
overview and item arrival journal to process the transfer order receipt. You
can refer to the arrival overview module.
Use the Practice: Pick, Ship, and Receive a Transfer Order
Review
Close with “Transfer Orders provided an overview of how to use the
Transfer orders functionality in AX. It also showed how to perform the
following tasks:
• Setting up transfer orders functionality.
• Creating a transfer order.
• Picking items for a transfer order.

Instructor Notes
• Shipping and receiving a transfer order.”
relist.

MODULE 14: REPORTS

Chapter Overview
• Set up manual and automatic ABC classification on a single item.

• Review and run the Physical inventory by inventory dimension report.
• Use reports to help forecast sales and purchase expectations.
Timeline

Overview
Explain that this module will go over reports. Now I’m sure that most of
you know are well aware of reports and what they do.
What makes this module different though is that AX uses the ABC
Classification for inventory reports, so that will be a new concept to many
of you.
ABC Inventory Classification

Discuss that ABC analysis is the method of classifying items based on their
relative importance. Item classification can, for example, be based on monetary
value, availability of resources and carrying cost.
Most companies carry lots of items in stock. To have better control, at a

reasonable cost, it helps classify the items according to their importance.
The ABC inventory classification system determines the importance of items and
includes different levels of control, based on the relative importance of the items.
The ABC principle is based on the observation that a few items frequently
dominate the results achieved in any situation.
By using the ABC approach, there are two general rules to follow:
• Have many low-value items.
• Concentrate your efforts on reducing the inventory of high value items.
A Items: A items are important and deserve the tightest control and the most
frequent review.

Instructor Notes
A items take on a high priority level of control. The tight control on these items
includes a focus on keeping accurate records, regular and frequent review by
management, frequent review of demand forecasts, and close follow-up and
expediting to reduce lead time.
B Items: B items take on a medium priority level of control.

These items have typical controls with good records, regular attention, and
typical processing.
C Items: Carrying additional stock of C items adds little to the total value of the
inventory. C items take the lowest priority level of control. These items use the
simplest possible controls. Make sure that there are many of these on hand and
keep simple or no records. Order large quantities of C items and carry safety
stock.
Display the Breakdown of ABC Items slide and review.
Demonstrate configure, run, and review ABC classifications or use the

show me.
Use the Practice: Run ABC Classification Reports
Physical Inventory by Dimension Report

Illustrate that the Physical inventory by inventory dimension report
displays the inventory quantity for each inventory dimension for the date
that you select in the As on field. This report also gives you the option to
filter by inventory dimension.
Inventory Aging Report

The new inventory aging report in AX 2012 R3 works independently of
inventory valuation method such as FIFO or Standard Cost. You have the
flexibility of defining aging buckets in preferred intervals and the report
results do not distinguish between physical or financial inventory. The
“aging” in the report which consists of value and quantities being placed
in columns based on how old the inventory is, computes by using a FIFO
algorithm on physical inventory movements. The values which are
expressed in monitory amounts are obtained by multiplying the quantity
on hand in a given period with the current average unit cost as of reporting
date.
Display Inventory Aging Example slide.
Demonstrate Run the Inventory Aging Report or use the show me.

Forecasting Reports
Explain that forecasting is a prelude to planning. Before you make a plan,
an estimate must be made on what conditions will exist over some future
period. Most companies cannot wait until orders are actually received
before they start to plan what to buy and produce.
Demonstrate for forecasting reports or use the show me.
Use the Practice: Reports.
Review
Close with “The Reports module we discussed how to run and print
several useful reports in Microsoft Dynamics AX 2012 such as the
following:
• ABC inventory classification report
• Physical inventory by inventory dimensions report
• Forecasting reports that include the following:
• Inventory demand reports
• Sales analysis of historic transactions
• Purchase analysis of historic transactions”
relist.

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COURSE: 80649

DISTRIBUTION AND TRADE IN MICROSOFT

© 2014 Microsoft Corporation. All rights reserved.

** Intended for Instructor Preparation Only ** Page i

Module Description Minutes to Complete Chapter

Module 3: Charges Presentation: 30 minutes

Page ii ** Intended for Instructor Preparation Only **

INTRODUCTION TO INSTRUCTOR NOTES

• Provide instructors with guidance on how to use instructor notes.

This module provides the following information:

• How to use the Introduction module

** Intended for Instructor Preparation Only ** Page 1

• Contact training center in advance – Contact the training

• Check the training room before class – Go to the training

Please check on PartnerSource to see if there is a training Extension that goes

Page 2 ** Intended for Instructor Preparation Only **

Beginning the Class

Allow participants time to introduce themselves using these same bullets.

Introduce the Class

The Introduction Module

The introduction module contains information about:

• Microsoft Dynamics training offerings – Make participants

** Intended for Instructor Preparation Only ** Page 3

• Class prerequisites – Use the information to assist in the

Page 4 ** Intended for Instructor Preparation Only **

How to Use Instructor Notes

Content developers write instructor notes to:

• Provide guidance on which topics should be emphasized during

Therefore it is important for instructors to incorporate the guidance provided by

Organization of Instructor Notes

** Intended for Instructor Preparation Only ** Page 5

Example of a best practice call out box:

Page 6 ** Intended for Instructor Preparation Only **

• Evaluations – Administer any evaluations required for the class,

** Intended for Instructor Preparation Only ** Page 7

How to Teach this Module

Distribution is the activities associated with the movement of material, usually

Display objectives slide.

Discuss each chapter and what features will be covered.

Distributors operate between the line of manufacturers and customers,

Display Distribution slide

** Intended for Instructor Preparation Only ** Page 9

MODULE 2: OVER AND UNDER DELIVERY

How to Teach this Module

Display objectives slide.

Over/Under Delivery Setup

Use Demonstration: Set Up Components for Over/Under Delivery.

Page 10 ** Intended for Instructor Preparation Only **

Demonstrate Review Over/Under Delivery Settings or use the show me.

Use Demonstration: Use Over/Under Delivery on Sales Order

Use Practice: Use Over and Under Delivery on a Purchase Order/Sales

** Intended for Instructor Preparation Only ** Page 11

How to Teach this Module

Display objectives slide.

Working with Charges

Review the three ways that charges can be added.

Demonstrate price charges on an item or use the show me.

Use Demonstration Set Up Price Charges on an Item.

Use Practice: Create a Charges Code

Demonstrate Manual Charges or use the show me.

Use Demonstration: Add Charges to a Sales Order.

Use Practice: Manual Setup of Charges

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