Exam 7: Demand Management

Henderson Air practices the principles of lean manufacturing, including setting up its production lines so they can easily and efficiently be switched to produce various product lines. Which strategy is this firm using to balance supply and demand?

Diego needs to forecast demand for his company's products, using the data he already possesses. He has an average of previous demand, and he knows the most recent demand because he believes it's a better predictor of future demand. Which forecasting technique should he use?

Mean absolute deviation (MAD) is a good metric of forecast accuracy because it shows whether a forecast is above or below actual demand.

What are some of the logistical problems that may arise when supply and demand for a product are not aligned properly? What are some of the methods used to soften the effects of this imbalance?

Exponential smoothing can use constants higher than 1, but not more than 5.

There are four types of forecast error measures that can be used. Name them, and choose one to discuss.

When Brianna calculates her forecasts, she uses a type of forecast error measure that squares each period error so the negative and positive errors don't cancel each other out. Which method is Brianna using?

Acme Fastener and Tool is having major problems with demand management. The VP of Sales is very focused on increasing productivity according to forecasts, but the operations manager routinely presents obstacles to increasing production above current levels. Of the following, which problem is the firm experiencing?

A process that organizations can use to arrive at a consensus forecast is called Sales and Operations Planning (S&OP). Discuss the five steps used to implement this process.

Demand management might be defined as focused efforts to estimate and manage customers' demand, with the intention of using this information to shape operating decisions.

The essence of demand management is to estimate and manage _____ and use this information to make operating decisions.

Materials management and physical supply are terms that cannot be used interchangeably.

Three business co-owners are setting up a new manufacturing facility, and they are currently identifying partners to perform certain functions needed in the demand chain. Which aspect of demand management are they addressing?

The essence of demand management is to estimate and manage customer demand so that demand and supply are balanced to the point where there are zero stockouts and zero safety stocks.

The collaborative planning, forecasting, and replenishment (CPFR) process begins with the sharing of marketing plans between trading partners.

Phantom demand is created by over-ordering during peak demand.

A sales and operations planning process (S&OP) can produce a forecast internally that all functional areas agree upon and can execute.

Dependent demand is directly influenced by independent demand.

The second step in the monthly sales and operations planning process (S&OP) is supply planning.

Outbound-to-customer logistics systems are also referred to as physical distribution.