Demand Planning & Forecasting Flashcards

Sales and Operations Planning (S&OP) is primarily designed to:

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.

A coefficient of variation (CV) for demand is used to measure:

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.

Which qualitative forecasting technique gathers anonymous expert opinions through iterative questionnaire rounds until consensus is reached?

Answer: Delphi method

The Delphi method uses structured rounds of anonymous expert feedback, with summarized results returned to participants until group consensus emerges.

Collaborative Planning, Forecasting, and Replenishment (CPFR) improves supply chain performance by:

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.

A tracking signal in demand forecasting is used to:

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.

Which planning horizon is most commonly associated with Sales and Operations Planning (S&OP)?

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.