Supply Chain Management Demand Planning 2

Question 1

Which demand planning technique uses weighted averages where more recent data points are given greater importance?

Accepted Answer

Exponential smoothing

Answer

Exponential smoothing assigns exponentially decreasing weights to older observations, making recent data more influential in the forecast.

Question 2

A company notices its product sells significantly more in December every year. This pattern is best classified as:

Accepted Answer

Seasonal variation

Answer

Seasonal variation refers to predictable, repeating fluctuations tied to calendar periods such as months or quarters.

Question 3

What is the primary purpose of a Demand Review in the Sales & Operations Planning (S&OP) process?

Accepted Answer

To reconcile unconstrained demand forecasts with financial targets

Answer

The Demand Review step in S&OP aligns the statistical forecast with market intelligence and reconciles it against revenue and financial plans.

Question 4

In demand planning, 'intermittent demand' is characterized by:

Accepted Answer

Irregular transaction intervals with variable quantity

Answer

Intermittent demand occurs when transactions happen sporadically with varying quantities, making it difficult to forecast with standard methods.

Question 5

Which metric measures the average absolute difference between forecasted and actual demand, expressed as a percentage?

Accepted Answer

MAPE

Answer

Mean Absolute Percentage Error (MAPE) expresses forecast error as a percentage of actual values, allowing comparison across products with different scales.

Supply Chain Management Practice Test

Supply Chain Management Practice Test

Supply Chain Management Demand Planning 2