CSCP Demand Management 2 — Questions and Answers
Question 1: Which of the following is an example of a demand shaping strategy?
- Increasing safety stock during peak periods
- Offering promotional discounts to shift demand from peak to off-peak periods (Correct answer)
- Extending lead times to customers
- Adding warehouse capacity to buffer variability
Correct answer: Offering promotional discounts to shift demand from peak to off-peak periods
Demand shaping uses pricing, promotions, and incentives to influence when and how much customers buy, smoothing demand across time periods.
Question 2: A tracking signal in demand forecasting is used to:
- Forecast seasonal demand patterns
- Detect whether a forecasting model is consistently biased (Correct answer)
- Calculate the optimal reorder point
- Measure supplier performance
Correct answer: Detect whether a forecasting model is consistently biased
The tracking signal monitors cumulative forecast errors to identify when a forecast model is systematically over- or under-predicting demand.
Question 3: What is the primary benefit of segmenting customers by demand pattern when developing forecasting strategies?
- It reduces the number of SKUs to forecast
- It allows tailored forecasting approaches matched to the characteristics of each segment (Correct answer)
- It eliminates the need for safety stock
- It standardizes order quantities across all customers
Correct answer: It allows tailored forecasting approaches matched to the characteristics of each segment
Different customer segments exhibit different demand behaviors, so segmentation enables more accurate and appropriate forecasting methods for each group.
Question 4: In demand management, 'Available-to-Promise' (ATP) refers to:
- The quantity of inventory available for immediate shipment based on current stock minus existing commitments (Correct answer)
- The total production capacity available in a planning period
- The maximum discount a salesperson can offer to a customer
- The lead time quoted to customers for new orders
Correct answer: The quantity of inventory available for immediate shipment based on current stock minus existing commitments
ATP is the uncommitted portion of inventory and planned production that can be promised to new customer orders without affecting existing commitments.
Question 5: Which forecasting time horizon is most appropriate for Sales and Operations Planning (S&OP)?
- Daily to weekly
- Weekly to monthly
- Monthly to 18 months (Correct answer)
- 3 to 10 years
Correct answer: Monthly to 18 months
S&OP typically operates on a monthly planning cycle with a rolling horizon of 12-18 months to align tactical supply and demand.
Question 6: Which of the following best describes 'demand disaggregation'?
- Combining demand from multiple channels into a single forecast
- Breaking an aggregate forecast down into detailed SKU, location, or time-period forecasts (Correct answer)
- Eliminating low-volume SKUs from the product portfolio
- Transferring demand from one product to a substitute
Correct answer: Breaking an aggregate forecast down into detailed SKU, location, or time-period forecasts
Demand disaggregation takes a high-level aggregate forecast and distributes it to detailed planning levels such as individual products, locations, or time buckets.
Question 7: What is the key difference between a 'push' system and a 'pull' system in demand-driven supply chain management?
- Push systems use forecasts to drive production; pull systems replenish based on actual demand signals (Correct answer)
- Push systems are used for seasonal products; pull systems are for stable demand
- Push systems require EDI; pull systems use manual processes
- Push systems have lower inventory; pull systems have higher inventory
Correct answer: Push systems use forecasts to drive production; pull systems replenish based on actual demand signals
In a push system, production is triggered by forecasts; in a pull system, replenishment is triggered by actual customer demand, reducing overproduction risk.
CSCP Demand Management 2
Which of the following is an example of a demand shaping strategy?