CIM Demand Forecasting & Supply Planning 2

Question 1

Which forecasting method assigns greater weight to more recent data points using a smoothing constant (α)?

Accepted Answer

Exponential smoothing

Answer

Exponential smoothing uses a smoothing constant α (0 < α < 1) to give more weight to recent observations while exponentially decreasing the weight of older data.

Question 2

A company's demand shows a consistent upward trend over 12 months. Which forecasting technique is BEST suited for this pattern?

Accepted Answer

Double exponential smoothing (Holt's method)

Answer

Double exponential smoothing (Holt's method) accounts for both level and trend components, making it appropriate for data with a consistent trend.

Question 3

Mean Absolute Percentage Error (MAPE) is calculated as:

Accepted Answer

Average of |Actual - Forecast| / Actual × 100

Answer

MAPE measures forecast accuracy as a percentage by averaging the absolute differences between actual and forecast values divided by the actual values.

Question 4

In supply planning, 'safety stock' is primarily used to:

Accepted Answer

Buffer against demand and lead time variability

Answer

Safety stock protects against stockouts caused by variability in customer demand or supplier lead times.

Question 5

Which of the following is a qualitative forecasting method?

Accepted Answer

Delphi method

Answer

The Delphi method is a qualitative technique that uses structured expert opinions through iterative rounds to reach a consensus forecast.

(CIM) Certified Inventory Manager Practice Test

(CIM) Certified Inventory Manager Practice Test

CIM Demand Forecasting & Supply Planning 2