Certified Supply Chain Professional CSCP Practice CSCP Demand Management and Forecasting 1

Question 1

Which demand forecasting technique uses a weighted average of past observations, where more recent data points receive greater weight than older ones?

Accepted Answer

Exponential smoothing

Answer

Exponential smoothing applies exponentially decreasing weights to past observations, giving more influence to recent data. This makes it more responsive to demand shifts than a simple moving average, which weights all periods equally.

Question 2

A supply chain manager calculates the Mean Absolute Deviation (MAD) for two forecasting models. Model A has a MAD of 45 and Model B has a MAD of 72. What does this indicate?

Accepted Answer

Model A is more accurate because it has a lower average forecast error

Answer

MAD measures the average absolute difference between forecasted and actual values. A lower MAD means smaller average errors, so Model A's MAD of 45 indicates it produces more accurate forecasts than Model B's MAD of 72.

Question 3

Which of the following is an example of an INDEPENDENT demand item in a manufacturing environment?

Accepted Answer

A finished good sold directly to end customers

Answer

Independent demand is driven by external market forces and customer orders, not derived from the demand for another item. Finished goods sold to end customers represent independent demand, while components and sub-assemblies driven by bills of materials represent dependent demand.

Question 4

A retailer shares its point-of-sale data directly with a supplier so the supplier can replenish stock automatically. This practice is best described as:

Accepted Answer

Vendor-managed inventory (VMI)

Answer

Vendor-managed inventory (VMI) is an arrangement where the supplier takes responsibility for replenishing the buyer's inventory using shared demand data such as point-of-sale information. This reduces the bullwhip effect and improves replenishment accuracy.

Question 5

The bullwhip effect in a supply chain is PRIMARILY caused by:

Accepted Answer

Order quantity variability amplifying as it moves upstream through the supply chain

Answer

The bullwhip effect occurs when small variations in consumer demand get progressively amplified as orders are placed upstream through the supply chain. Each tier buffers uncertainty by ordering more, causing suppliers to see highly volatile demand even when end-consumer demand is relatively stable.

Certified Supply Chain Professional CSCP Practice Practice Test

Certified Supply Chain Professional CSCP Practice Practice Test

Certified Supply Chain Professional CSCP Practice CSCP Demand Management and Forecasting 1