CSCP FREE Certified Supply Chain Professional (CSCP) Demand Management and Forecasting Questions and Answers 2 — Questions and Answers
Question 1: Which forecasting method uses historical data patterns such as trends, seasonality, and cycles to project future demand?
- Qualitative forecasting
- Time series analysis (Correct answer)
- Causal modeling
- Delphi method
Correct answer: Time series analysis
Time series analysis examines historical demand data to identify patterns like trends and seasonality for projecting future demand.
Question 2: What is the primary purpose of demand sensing in supply chain management?
- To replace long-term strategic forecasts
- To detect short-term shifts in demand using real-time data (Correct answer)
- To eliminate the need for safety stock
- To forecast demand for new product launches
Correct answer: To detect short-term shifts in demand using real-time data
Demand sensing uses real-time data signals such as POS data and market indicators to detect near-term demand changes.
Question 3: A company notices that forecast accuracy decreases significantly for items with intermittent demand patterns. Which technique is most appropriate for these items?
- Simple moving average
- Exponential smoothing
- Croston's method (Correct answer)
- Linear regression
Correct answer: Croston's method
Croston's method is specifically designed for intermittent demand by separately forecasting the demand interval and demand size.
Question 4: In the context of demand management, what does 'demand shaping' refer to?
- Adjusting supply to match existing demand
- Using pricing, promotions, and incentives to influence customer demand (Correct answer)
- Forecasting demand more accurately
- Reducing demand variability through safety stock
Correct answer: Using pricing, promotions, and incentives to influence customer demand
Demand shaping uses levers like pricing, promotions, and product substitution to proactively influence the timing and quantity of customer demand.
Question 5: What is the bullwhip effect in demand management?
- A sudden drop in consumer demand at the retail level
- The amplification of demand variability as orders move upstream in the supply chain (Correct answer)
- A technique for smoothing demand fluctuations
- The reduction in lead times through vendor-managed inventory
Correct answer: The amplification of demand variability as orders move upstream in the supply chain
The bullwhip effect describes how small fluctuations in end-consumer demand become increasingly amplified at each upstream stage of the supply chain.
Question 6: Which metric measures the average absolute deviation of forecasts from actual demand, expressed as a percentage of actual demand?
- Mean Squared Error (MSE)
- Tracking signal
- Mean Absolute Percentage Error (MAPE) (Correct answer)
- Bias
Correct answer: Mean Absolute Percentage Error (MAPE)
MAPE calculates the average of absolute forecast errors divided by actual demand values, expressed as a percentage for easy interpretation.
CSCP FREE Certified Supply Chain Professional (CSCP) Demand Management and Forecasting Questions and Answers 2
Which forecasting method uses historical data patterns such as trends, seasonality, and cycles to project future demand?