CLA Demand Planning & Forecasting 2 — Questions and Answers
Question 1: Sales and Operations Planning (S&OP) is primarily designed to:
- Align demand plans with supply capacity across the organization (Correct answer)
- Replace the annual budgeting process
- Manage day-to-day order processing
- Optimize carrier selection for outbound shipments
Correct answer: Align demand plans with supply capacity across the organization
S&OP brings together sales, marketing, operations, and finance to create a unified plan that balances customer demand with available supply capacity.
Question 2: A coefficient of variation (CV) for demand is used to measure:
- Demand variability relative to average demand, indicating forecast difficulty (Correct answer)
- The accuracy of a specific forecasting model
- Seasonal adjustment factors for a product
- The economic order quantity for a SKU
Correct answer: Demand variability relative to average demand, indicating forecast difficulty
CV (standard deviation divided by mean) normalizes variability, allowing comparison of demand volatility across products with different average volumes.
Question 3: Which qualitative forecasting technique gathers anonymous expert opinions through iterative questionnaire rounds until consensus is reached?
- Delphi method (Correct answer)
- Focus group
- Naive forecasting
- Causal regression
Correct answer: Delphi method
The Delphi method uses structured rounds of anonymous expert feedback, with summarized results returned to participants until group consensus emerges.
Question 4: Collaborative Planning, Forecasting, and Replenishment (CPFR) improves supply chain performance by:
- Sharing forecasts and sales data between trading partners to create a joint replenishment plan (Correct answer)
- Centralizing all procurement within one department
- Eliminating safety stock across the supply chain
- Automating carrier selection for all shipments
Correct answer: Sharing forecasts and sales data between trading partners to create a joint replenishment plan
CPFR is a business practice that enables buyers and sellers to jointly develop forecasts and replenishment plans using shared data, reducing variability and improving fill rates.
Question 5: A tracking signal in demand forecasting is used to:
- Detect systematic bias in a forecast model that consistently over- or under-predicts (Correct answer)
- Measure the total inventory cost for a planning period
- Calculate the reorder point for a specific SKU
- Determine the safety stock level for new products
Correct answer: Detect systematic bias in a forecast model that consistently over- or under-predicts
A tracking signal accumulates forecast errors over time; values outside control limits indicate the model is biased and needs recalibration.
Question 6: Which planning horizon is most commonly associated with Sales and Operations Planning (S&OP)?
- 3 to 18 months (Correct answer)
- 1 to 7 days
- 5 to 10 years
- 1 to 4 weeks
Correct answer: 3 to 18 months
S&OP typically covers a rolling 3–18 month horizon, long enough to adjust supply capacity but short enough to remain actionable.
CLA Demand Planning & Forecasting 2
Sales and Operations Planning (S&OP) is primarily designed to: