CDPP Statistical Analysis for Demand Planning

Question 1

What is seasonality in demand patterns?

Accepted Answer

Predictable, recurring fluctuations in demand associated with specific time periods within a year

Answer

Seasonality refers to regular, predictable patterns of demand variation that repeat over consistent time periods (weekly, monthly, quarterly, annually), such as holiday shopping or summer ice cream sales.

Question 2

What is trend analysis in demand forecasting?

Accepted Answer

Identifying the long-term directional movement of demand over time, whether increasing, decreasing, or flat

Answer

Trend analysis identifies the long-term directional movement in demand data, distinguishing between upward growth trends, downward declining trends, and flat/stable patterns.

Question 3

What is regression analysis and how is it used in demand planning?

Accepted Answer

A statistical method that models the relationship between demand and one or more explanatory variables

Answer

Regression analysis models how demand (dependent variable) is influenced by factors like price, advertising spend, economic indicators, and competitive activity (independent variables).

Question 4

What is the coefficient of determination (R²) and why does it matter?

Accepted Answer

A measure of how well a regression model explains the variation in the data, ranging from 0 to 1

Answer

R² indicates the proportion of variance in the dependent variable explained by the model. An R² of 0.85 means the model explains 85% of the variation in demand.

Question 5

What is the difference between correlation and causation in demand analysis?

Accepted Answer

Correlation shows two variables move together; causation proves one actually causes the other

Answer

Two variables may be correlated (move together) without one causing the other. Ice cream sales and drownings both increase in summer, but one doesn't cause the other — heat causes both.

CDPP - Certified Demand Planning Professional Practice Test

CDPP - Certified Demand Planning Professional Practice Test

CDPP Statistical Analysis for Demand Planning