CPIM Demand Management & Forecasting 2

Question 1

Which forecasting technique uses a weighted average where more recent data points receive higher weights?

Accepted Answer

Exponential smoothing

Answer

Exponential smoothing applies exponentially decreasing weights to past observations, giving the most recent data the highest influence.

Question 2

A company notices that demand for its product consistently spikes every December and dips every July. This pattern is best described as:

Accepted Answer

Seasonal variation

Answer

Seasonal variation refers to recurring demand fluctuations tied to specific times of year, months, or seasons.

Question 3

Mean Absolute Deviation (MAD) is used in forecasting primarily to:

Accepted Answer

Measure forecast accuracy

Answer

MAD measures forecast accuracy by averaging the absolute differences between forecasted and actual demand.

Question 4

Which demand management concept refers to translating customer orders and forecasts into a single unified plan used for scheduling?

Accepted Answer

Demand planning consensus

Answer

Demand planning consensus integrates sales forecasts, customer orders, and market intelligence into a single agreed-upon demand plan.

Question 5

When forecast error consistently shows actual demand higher than forecasted demand, this bias is called:

Accepted Answer

Positive bias

Answer

Positive bias occurs when forecasts consistently underestimate actual demand, meaning actuals are repeatedly higher than predicted.

(CPIM) Certified in Planning and Inventory Management Practice Test