CSCP CSCP Demand Management and Forecasting Questions and Answers 3

Question 1

A manufacturer uses a weighted moving average with weights of 0.5, 0.3, and 0.2 for the most recent three periods. What assumption does this weighting scheme reflect?

Accepted Answer

More recent data is a better predictor of future demand

Answer

All historical periods are equally important

Answer

Older data is more relevant than recent data

Answer

Demand follows a strictly linear trend

Question 2

Which factor is MOST likely to cause extrinsic (external) variation in demand for a product?

Accepted Answer

A competitor launching a substitute product at a lower price

Answer

A change in the company's production schedule

Answer

An internal decision to discontinue a related SKU

Answer

A warehouse reorganization affecting picking times

Question 3

In the context of demand planning, what is the 'bullwhip effect'?

Accepted Answer

The amplification of demand variability as orders move upstream in the supply chain

Answer

A gradual decline in demand accuracy over long planning horizons

Answer

A sudden spike in demand caused by a viral marketing campaign

Answer

The reduction in forecast error achieved through collaborative planning

Question 4

A company wants to forecast demand for a brand-new product with no historical sales data. Which approach is MOST suitable?

Accepted Answer

Qualitative methods such as market research and expert judgment

Answer

Time series analysis using exponential smoothing

Answer

Causal regression modeling with lagged sales data

Answer

Seasonal index calculation from prior years

Question 5

What is the key benefit of using tracking signals in forecast monitoring?

Accepted Answer

They alert planners when cumulative forecast error exceeds acceptable thresholds

Answer

They automatically correct the forecast model parameters in real time

Answer

They eliminate the need for safety stock calculations

Answer

They convert qualitative forecasts into quantitative projections

Question 6

Which statement BEST describes demand aggregation in forecasting?

Accepted Answer

Combining individual SKU forecasts into product family or regional totals to improve accuracy

Answer

Summing all customer complaints to identify quality issues

Answer

Merging supplier lead times into a single average for planning

Answer

Consolidating warehouse inventories into one central location