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

Assigning the largest weight to the most recent period assumes that newer observations are more indicative of future demand than older ones.

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

Extrinsic demand factors originate outside the organization, such as competitor actions, economic shifts, or regulatory changes that influence customer purchasing decisions.

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

The bullwhip effect describes how small fluctuations in consumer demand become magnified at each upstream stage of the supply chain due to order batching, rationing, and information delays.

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

New products lack the historical data required by quantitative methods, so qualitative approaches like expert panels, market surveys, and analogy-based estimates are most appropriate.

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

Tracking signals compare cumulative forecast error to the mean absolute deviation, alerting planners when the ratio exceeds control limits so corrective action can be taken.

Certified Supply Chain Professional CSCP Practice Practice Test

Certified Supply Chain Professional CSCP Practice Practice Test

CSCP CSCP Demand Management and Forecasting Questions and Answers 3