Demand Management and Forecasting Flashcards

What is 'collaborative planning, forecasting, and replenishment' (CPFR)?

Answer: A supply chain practice where trading partners jointly develop forecasts and replenishment plans

CPFR is a collaborative process in which retailers and suppliers share data and jointly create forecasts and replenishment plans to improve supply chain performance.

Which component of demand is caused by regular, repeating patterns tied to a calendar cycle?

Answer: Seasonality

Seasonality describes demand patterns that repeat predictably within a year, such as holiday spikes or summer peaks.

What is the 'bullwhip effect' in supply chain demand management?

Answer: The amplification of demand variability as orders move upstream in the supply chain

The bullwhip effect describes how small demand variations at the retail level become increasingly amplified as they travel upstream to manufacturers and suppliers.

What is 'demand sensing' in modern supply chain management?

Answer: Using short-term, high-frequency data (POS, shipments) to detect real-time demand signals

Demand sensing uses near-real-time data such as point-of-sale information to detect and respond to actual demand faster than traditional forecasting.

Which demand management technique smooths out demand peaks by influencing customer timing?

Answer: Demand shaping (e.g., promotions, pricing incentives)

Demand shaping uses pricing, promotions, or incentives to shift customer demand from peak periods to slower periods, leveling the overall demand curve.

What is a 'tracking signal' used for in forecast monitoring?

Answer: To detect when forecast errors are accumulating in one direction, signaling bias

A tracking signal is calculated by dividing the running sum of forecast errors by MAD; values outside set limits indicate systematic forecast bias.