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Demand Management Flashcards

7 cards from real CPIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Demand Management flashcards as text

  1. A company notices its forecast error consistently underestimates actual demand. This systematic bias is best corrected by:

    Answer: Applying a positive bias adjustment to future forecasts

    Systematic bias (consistent under- or over-forecasting) should be corrected with a bias adjustment rather than changing the smoothing method.

  2. Which demand pattern is characterized by a regular, repeating fluctuation tied to the calendar?

    Answer: Seasonality

    Seasonality refers to repeating demand patterns tied to specific calendar periods such as months, quarters, or seasons.

  3. In collaborative planning, forecasting, and replenishment (CPFR), trading partners share:

    Answer: Sales forecasts, promotional plans, and order information

    CPFR involves sharing forecasts, promotional plans, and order data between retailers and suppliers to align supply and demand planning.

  4. A demand filter is used in forecasting systems primarily to:

    Answer: Flag demand data points that fall outside expected ranges for review

    Demand filters identify unusual demand observations (outliers) that may distort the forecast and flag them for analyst review.

  5. Which measure expresses forecast accuracy as a percentage of actual demand, making it useful for comparing accuracy across products with different volumes?

    Answer: Mean Absolute Percent Error (MAPE)

    MAPE expresses the error as a percentage of actual demand, enabling fair comparison across items with vastly different demand volumes.

  6. The 'bullwhip effect' in demand management refers to:

    Answer: Amplifying order variability as orders move upstream in the supply chain

    The bullwhip effect describes how small demand variability at the retail level gets amplified into large swings in orders further up the supply chain.

  7. When a company uses point-of-sale (POS) data shared by retailers to update its forecasts, this practice is known as:

    Answer: Demand sensing

    Demand sensing uses real-time or near-real-time POS and consumption data to create short-horizon forecasts that are more accurate than traditional methods.