CDPP Collaborative Planning & Customer Engagement 2

Question 1

What is the 'bullwhip effect' in supply chain management?

Accepted Answer

Demand volatility that increases as it moves upstream in the supply chain

Answer

The bullwhip effect describes how small demand fluctuations at the retail level get amplified into larger swings in orders as they move upstream to distributors, manufacturers, and suppliers.

Question 2

Which practice most directly reduces the bullwhip effect?

Accepted Answer

Sharing downstream POS or sell-out data with upstream partners

Answer

Sharing actual consumer demand data upstream eliminates information distortion, which is the root cause of the bullwhip effect.

Question 3

What is vendor-managed inventory (VMI)?

Accepted Answer

The supplier takes responsibility for managing and replenishing the buyer's inventory levels

Answer

In VMI, the supplier monitors the buyer's inventory and autonomously triggers replenishment, using shared stock and sales data.

Question 4

Which data element is most important to share with a supplier under a VMI arrangement?

Accepted Answer

On-hand inventory levels and current sales velocity

Answer

Current stock levels and sales velocity allow the supplier to calculate replenishment needs accurately and maintain agreed service levels.

Question 5

What is a 'demand collaboration portal' used for in modern supply chains?

Accepted Answer

Providing trading partners a shared platform to input forecasts, view deviations, and resolve exceptions

Answer

A demand collaboration portal enables retailers, distributors, and suppliers to share forecast data, flag variances, and align on a consensus number in near real time.

CDPP - Certified Demand Planning Professional Practice Test

CDPP - Certified Demand Planning Professional Practice Test

CDPP Collaborative Planning & Customer Engagement 2