Supply Chain Management Essay

5211 words - 21 pages

Chapter 7
Demand Forecasting in a Supply Chain

True/False

1. The forecast of demand forms the basis for all strategic and planning decisions in a supply chain.
Answer: True
Difficulty: Moderate

2. Throughout the supply chain, all pull processes are performed in anticipation of customer demand, whereas all push processes are performed in response to customer demand.
Answer: False
Difficulty: Easy

3. For pull processes, a manager must forecast what customer demand will be in order to plan the level of available capacity and inventory.
Answer: True
Difficulty: Moderate

4. For push processes, a manager must ...view middle of the document...

Forecasts are always right.
Answer: False
Difficulty: Easy

11. Forecasts should include both the expected value of the forecast and a measure of forecast error.
Answer: True
Difficulty: Moderate

12. Long-term forecasts are usually more accurate than short-term forecasts.
Answer: False
Difficulty: Moderate

13. Aggregate forecasts are usually more accurate than disaggregate forecasts, as they tend to have a smaller standard deviation of error relative to the mean.
Answer: True
Difficulty: Moderate

14. In general, the further up the supply chain a company is (or the further they are from the consumer), the smaller the distortion of information they receive.
Answer: False
Difficulty: Easy

15. Collaborative forecasting based on sales to the end customer can help enterprises further up the supply chain reduce forecast error.
Answer: True
Difficulty: Moderate

16. Qualitative forecasting methods are most appropriate when there is good historical data available or when experts do not have market intelligence that is critical in making the forecast.
Answer: False
Difficulty: Moderate

17. Time series forecasting methods are based on the assumption that past demand history is a good indicator of future demand.
Answer: True
Difficulty: Easy

18. Time series forecasting methods are the most difficult methods to implement.
Answer: False
Difficulty: Moderate

19. Causal forecasting methods find a correlation between demand and environmental factors and use estimates of what environmental factors will be to forecast future demand.
Answer: True
Difficulty: Moderate

20. Simulation forecasting methods imitate the consumer choices that give rise to demand to arrive at a forecast.
Answer: True
Difficulty: Moderate

21. The objective of forecasting is to filter out the random component (noise) and estimate the systematic component.
Answer: True
Difficulty: Moderate

22. The forecast error measures the difference between the forecast and the estimate.
Answer: False
Difficulty: Easy

23. The goal of any forecasting method is to predict the systematic component of demand and estimate the random component.
Answer: True
Difficulty: Moderate

24. A static method of forecasting assumes that the estimates of level, trend, and seasonality within the systematic component vary as new demand is observed.
Answer: False
Difficulty: Easy

25. In adaptive forecasting, the estimates of level, trend, and seasonality are updated after each demand observation.
Answer: True
Difficulty: Moderate

26. The moving average forecast method is used when demand has an observable trend or seasonality.
Answer: False
Difficulty: Moderate

Multiple Choice

1....

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