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
In demand management, 'available-to-promise' (ATP) is calculated as:
Answer: On-hand inventory plus scheduled receipts minus booked customer orders in each period
ATP represents the uncommitted portion of inventory in each period: on-hand plus scheduled receipts minus already-committed customer orders.
Which of the following is an example of a demand shaping technique?
Answer: Offering promotional pricing to shift demand from peak to off-peak periods
Demand shaping involves using pricing, promotions, or incentives to actively influence when and how much customers buy, smoothing demand across time.
The primary purpose of a Sales and Operations Planning (S&OP) process is to:
Answer: Align supply capabilities with anticipated demand across the enterprise
S&OP aligns sales, marketing, operations, and finance around a single agreed-upon plan to balance supply capability with expected demand.
A tracking signal that falls outside the control limits most likely indicates:
Answer: A systematic bias has developed in the forecasting model
A tracking signal outside control limits signals that cumulative forecast errors are trending in one direction, indicating a systematic bias in the model.
Which forecasting approach aggregates demand at a higher level (e.g., product family) and then disaggregates to individual SKUs?
Answer: Top-down forecasting
Top-down forecasting starts at an aggregate level where data is more stable, then applies percentage splits or other rules to allocate demand to individual SKUs.
In the context of demand management, 'lead time demand' refers to:
Answer: The expected demand during the replenishment lead time
Lead time demand is the expected quantity of demand that will occur during the supplier or production lead time, used to set reorder points.
A company wants to reduce forecast error for a high-volume, stable product. The BEST action is to:
Answer: Shorten the forecast horizon
Shorter forecast horizons generally produce more accurate forecasts because there is less time for conditions to change from the forecast period.