CSCP CSCP Demand Management and Forecasting Questions and Answers 2 — Questions and Answers
Question 1: A company notices that sales of a seasonal product spike every December. Which forecasting method is MOST appropriate to capture this recurring pattern?
- Simple moving average
- Exponential smoothing with trend
- Seasonal decomposition method (Correct answer)
- Naive forecasting
Correct answer: Seasonal decomposition method
Seasonal decomposition separates data into trend, seasonal, and irregular components, making it ideal for products with predictable recurring patterns.
Question 2: What is the primary purpose of demand sensing in modern supply chain management?
- Replacing long-term strategic forecasts entirely
- Detecting short-term shifts in demand using real-time data signals (Correct answer)
- Eliminating the need for safety stock
- Reducing the number of SKUs in a product portfolio
Correct answer: Detecting short-term shifts in demand using real-time data signals
Demand sensing uses point-of-sale data, social media trends, and other real-time signals to detect near-term demand changes more quickly than traditional methods.
Question 3: In a collaborative planning, forecasting, and replenishment (CPFR) process, which activity occurs during the strategy and planning phase?
- Generating joint sales forecasts
- Establishing ground rules and defining collaboration scope (Correct answer)
- Resolving forecast exceptions
- Placing replenishment orders
Correct answer: Establishing ground rules and defining collaboration scope
The strategy and planning phase of CPFR focuses on establishing partnership agreements, defining scope, and setting ground rules before any forecasting begins.
Question 4: A forecast consistently predicts demand that is higher than actual sales over multiple periods. Which type of forecast error does this represent?
- Random variation
- Positive bias (Correct answer)
- Negative bias
- Seasonal error
Correct answer: Positive bias
A persistent overestimate of demand indicates positive forecast bias, where predicted values systematically exceed actual values.
Question 5: Which demand management strategy involves offering price incentives to shift customer orders to periods of lower demand?
- Demand shaping (Correct answer)
- Chase strategy
- Level production
- Demand filtering
Correct answer: Demand shaping
Demand shaping uses pricing, promotions, or product substitution to influence when and what customers buy, smoothing demand across periods.
Question 6: What does the mean absolute percentage error (MAPE) measure in demand forecasting?
- The total cumulative error over all forecast periods
- The average percentage deviation of forecasts from actual demand (Correct answer)
- The standard deviation of forecast errors
- The maximum single-period forecast miss
Correct answer: The average percentage deviation of forecasts from actual demand
MAPE calculates the average of absolute percentage errors across periods, expressing forecast accuracy as a percentage of actual demand.
CSCP CSCP Demand Management and Forecasting Questions and Answers 2
A company notices that sales of a seasonal product spike every December.
Which forecasting method is MOST appropriate to capture this recurring pattern?