CPIM Demand Management & Forecasting

Question 1

What is the primary purpose of demand forecasting in inventory management?

Accepted Answer

To determine future inventory requirements

Answer

To create marketing strategies.

Answer

To reduce product quality.

Answer

To expand product lines.

Question 2

Which method is considered a qualitative forecasting technique?

Accepted Answer

Delphi method

Answer

Moving average

Answer

Exponential smoothing

Answer

Linear regression

Question 3

What does a high forecast error typically indicate?

Accepted Answer

Forecast needs adjustment or improvement

Answer

Forecast is very accurate.

Answer

Forecast method is perfect.

Answer

There is no demand fluctuation.

Question 4

Which component is NOT typically part of demand?

Accepted Answer

Stability

Answer

Seasonality

Answer

Cyclicality

Answer

Randomness

Question 5

What is the benefit of collaborative forecasting?

Accepted Answer

Improves forecast accuracy and consensus

Answer

Increases individual bias.

Answer

Reduces transparency.

Answer

Delays decision-making.

Question 6

What does MAPE stand for in forecasting?

Accepted Answer

Mean Absolute Percentage Error

Answer

Mean Average Projection Estimate

Answer

Maximum Allowable Percent Error

Answer

Marginal Allocation of Projected Errors

Question 7

What role does demand planning software play?

Accepted Answer

Supports data analysis and model-based forecasting

Answer

Eliminates the need for historical data.

Answer

Replaces human judgment entirely.

Answer

Prevents collaboration among teams.

Question 8

What does a forecast bias of zero indicate?

Accepted Answer

No consistent over- or under-forecasting

Answer

Forecast is always wrong.

Answer

Forecast consistently underestimates demand.

Answer

Forecast is ignored.

Question 9

Which of the following is a time series forecasting model?

Accepted Answer

Moving average

Answer

SWOT analysis

Answer

Linear regression

Answer

Delphi method