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Case Study 1 - Contoso, Ltd
Overview
Company Information
Contoso, Ltd is a multinational retail company that builds, deploys, and manages generative AI and agent-based solutions by using Microsoft Foundry.
Existing Environment
Identity Environment
Contoso uses Microsoft Entra ID for identity management, authentication, and authorization capabilities that enable agents to access organizational resources and services.
Contoso recently formed a new AI engineering team named Agent1Dev Team to optimize and maintain existing AI solutions.
The team collaborates with solution architects, DevOps engineers, and security engineers to design, implement. monitor, and secure AI applications.
Contoso also has a team named Agent1Test Team that is responsible for validating AI solutions before the solution deployments.
Generative Environment
Contoso has a Microsoft Foundry deployment that contains two projects named Project1 and Project2.
Project1
Project1 contains a customer support agent named Agent1 that assists customers with product inquiries and troubleshooting requests.
Agent1 has the following configurations:
- Agent1 uses a base model deployment.
- A safety evaluation pipeline is NOT enabled.
- Tool invocation approval workflows are NOT enabled.
- Conversation memory constraints are NOT configured.
Agent1 interacts with customers by using digital support channels and answers general questions about Contoso products.
Project1 is deployed to an Azure region located in the European Union (EU).
Agent1Dev Team will use Project1 to optimize and maintain Agent1.
Project2
Project2 contains a deployed video generation model. The marketing department at Contoso has access to Project2 and plans to use the model to develop a video creation solution.
Development of the solution is incomplete.
Data Environment
Contoso stores product-related information in Azure resources that support AI applications.
The Azure environment contains an Azure Blob Storage account named storage1 that stores product detail sheets for all the Contoso products.
The product sheets include specifications, feature descriptions, and product support information that Agent1 can use to answer customer questions. The product sheets are stored in the PDF format.
Problem Statements
Contoso identifies the following issues:
- Agent1 has only general knowledge of the Contoso products.
- A recent chat interaction with Agent1 was analyzed for sentiment. The results of the analysis have NOT been processed yet.
- Agent1 does NOT use the detailed product information in the product sheets stored in storage1 when responding to customer questions.
- The finance department at Contoso reports that vendor invoices must be reviewed manually to ensure that the invoices match the terms defined in the vendor contracts. The invoices contain tables, logos, and varied layouts that make the documents difficult to process consistently.
Requirements
Planned Changes
Contoso plans to implement the following changes:
- Implement a solution for Project1 that analyzes the vendor invoices by evaluating both the visual layout and the textual content of the invoices, so that the invoice details can be verified against the vendor contract terms.
- Update the base model deployment used by Agent1 and standardize the model version to ensure continuity and consistent responses.
- Enable Agent1 to retrieve and use the detailed product information from the product sheets stored in storage1.
- Implement an indexing solution for the product sheets that Agent1 can use to answer customer questions.
- Complete the development of the video creation solution.
Technical Requirements
Contoso identifies the following technical requirements:
- The model deployment used by Agent1 must support scalable, high-throughput generative AI workloads and dynamically scale to handle variable customer support traffic, without requiring reserved throughput capacity.
- The product sheets must be processed by using an indexing pipeline that enables semantic and vector search, so that Agent1 can retrieve the relevant product information.
- Responses generated by using the product sheet information must be relevant, complete, and accurate.
- Agent1 must be able to use the product sheets to answer natural language questions about product details.
- The model version used by Agent1 must remain consistent to ensure stable responses.
- The data processed by the model must remain within the EU.
Security and Compliance Requirements
Contoso identifies the following security and compliance requirements:
- API keys must NOT be used to access Foundry-deployed models.
- Access to the Azure resources must follow the principle of least privilege.
- The developers at Contoso must authenticate to Microsoft Foundry resources by using Microsoft Entra authentication.
- Access to Project1 must be assigned to the members of Agent1Dev Team by using a security group named SC_Agent1_Dev.
- Access to Project1 must be assigned to the members of Agent1Test Team by using a security group named SC_Agent1_Test.
- Agent1 must never reveal customer information, even if a document that contains customer data is added erroneously to the product sheet repository in storage1.
- The product sheets might contain images that include embedded text. Agent1 must be protected from malicious instructions potentially hidden within the images.
Business Requirements
Contoso identifies the following business requirements:
- Users that interact with Agent1 must have a personalized experience in future interactions, including the ability for Agent1 to retain conversation context and recall relevant information from previous interactions.
- Agent1 must answer questions only about the products sold by Contoso.
You need to configure personalized user interactions for Agent1. The solution must meet the business requirements.
What should you include in the solution?

• A. memory
• B. tools
• C. guardrails
• D. knowledge

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You have a web app named App1 that sends requests to a multimodal chat model deployment in a Microsoft Foundry project.
User messages can contain both text and images.
Currently, App1 includes image URL: as plain text inside the message content so the model cannot recognize them as images.
Traces show that the requests contain a single text message instead of a multimodal content array.
You need to send the message as a structured array that includes both the text portion and the image reference to ensure that the model can process the image correctly.
What should you do?

• A. Add the image URL to the request metadata section, so the model can resolve the processing issue automatically.
• B. Set the user message content array to include items that have type: text and type: image_url.
• C. Place the image URL inside the System Message and set type to image_url so the model loads the image at initialization.
• D. Encode the image to base64 and include the encoded data inside the content string of the user message.

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Hotspot Question
You have a Python application that redacts sensitive information before sending prompt text to a language model. The application has the following code:

For each of the following statements, select Yes if the statement is true. Otherwise, select No.
NOTE: Each correct selection is worth one point.

Explanation:
Box 1: No
The audit list will not include entity records for "Contact" and "SSN" because neither word is a target PII entity type defined in the configuration.
The code limits scanning to Person and PhoneNumber via the piiCategories list.
"Contact" Definition: This is a regular English verb/noun, not a person's name or a telephone number.
"SSN" Definition: While "SSN" is a text label that points to sensitive data, it is a descriptor rather than an actual Social Security Number.
Box 2: Yes
For the given sample_text, text_for_model will include both or [email protected] and 859-
98-0987 completely unredacted.
The payload explicitly restricts the Personally Identifiable Information (PII) recognition to only two specific categories by setting piiCategories: ["Person", "PhoneNumber"].
Email Address Excluded: Because the Email category is omitted from the configuration list, the service bypasses the email address ([email protected]) and leaves it fully intact.
SSN Excluded: Similarly, because the USSSN (or equivalent Social Security Number) category is not specified in the piiCategories array, the SSN (859-98-0987) is completely ignored by the redaction policy and remains visible.
Box 3: Yes
text_for_model will contain entity type masks for "John Doe" and "312-555-1234", but only for those two specific items.
The piiCategories array explicitly requests Person and PhoneNumber.
Applied Redaction: The Azure AI Language service will replace "John Doe" and "312-555-1234" with masks like * or entity labels (depending on exact policy settings).
Skipped Data: The email ([email protected]) and the SSN (859-98-0987) will not be redacted because their categories (Email and USSSN) were omitted from your piiCategories list.
Reference:
https://learn.microsoft.com/en-us/azure/ai-services/language-service/personally-identifiable-information/concepts/conversations-entity-categories

You have a custom named entity recognition (NER) project in Azure Language in Foundry Tools for support tickets. The schema for the project contains an entity type named ContactInfo.
In tagged training files, ContactInfo is used for phone numbers, email addresses, and social media handles.
Model evaluation shows low precision for ContactInfo, including false positives in which nearby text is extracted as ContactInfo.
You need to improve the precision of the project.
What should you do before retraining the model?

• A. Replace ContactInfo by using Phone, Email, and SocialMedia entities. Relabel every matching span.
• B. Trigger an auto-labeling job.
• C. Add more support tickets as training data and label more ContactInfo entities.
• D. Lower the confidence threshold for ContactInfo.

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Drag and Drop Question
You have a Microsoft Foundry project that contains an agent. The agent uses threads and file uploads and calls an Azure OpenAI model deployment.
During load testing, calls intermittently fall and return an HTTP 429 rate limit exceeded error.
Some user uploads fail and generate an HTTP 400 file size exceeded error.
You need to mitigate the errors and reduce call failures. The solution must remain within the service and model limits.
What should you do to resolve each error? To answer, drag the appropriate actions to the correct errors. Each action may be used once, more than once or not at all. You may need to drag the split bar between panes or scroll to view content.
NOTE: Each comet selection is worth one point.

Explanation:
Box 1: Implement exponential backoff and jitter in the retry logic
To remedy intermittent HTTP 429 rate limit errors while staying within service limits, you must implement a retry policy that uses exponential backoff and jitter.
Because the agent uses threads and file uploads, load testing triggers short-window concurrency spikes (bursting). Azure OpenAI evaluates rate limits in small slices (like 1- to 10-second windows), meaning overlapping file processing or concurrent thread steps will trigger a 429 even if your total Tokens-Per-Minute (TPM) or Requests-Per-Minute (RPM) look safe overall.
Box 2: Split content into smaller files before uploading the files.
Instead of uploading a large document in a single standard files.create request, utilize the Chunked Uploads REST API path. This splits the file payload on your client application layer before streaming it to Azure.
Note: To resolve the HTTP 400 file size exceeded error in your Microsoft Foundry agent, you need to bypass the strict payload constraints of standard single-request uploads. In Azure OpenAI and Microsoft Foundry Agent architectures, a multipart standard upload has a rigid request body limit (typically 30 MB or 50 MB.
Reference:
https://learn.microsoft.com/en-us/answers/questions/2265002/getting-error-after-deployed-a-model-in-azure-ai-f
https://learn.microsoft.com/en-us/answers/questions/5521436/getting-400-error(request-body-too-large)-for-batc