Deck 7: Demand Management

Question 1

Dependent demand is directly influenced by independent demand.

Answer 1

True

Question 2

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?

A) Flow of products
B) Flow of services
C) Flow of capital
D) Flow of information

Answer 2

B

Question 3

External balancing methods involve managing production and inventory flexibility to help offset the imbalance of supply and demand.

Answer 3

False

Question 4

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

Question 5

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.

Question 6

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

Question 7

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) Focus on tactics
B) Lack of attention on operational planning
C) Overemphasis on forecasting
D) Functional silos

Question 8

A weighted moving average assigns higher weights to more recent periods.

Question 9

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

Question 10

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

Question 11

Collaborative planning, forecasting, and replenishment (CPFR) has not been considered to be a good process, as it excludes transportation.

Question 12

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.

Question 13

While evaluating recent demand forecasts, Caleb discovered that his company made an error, resulting in a stockout. Which type of forecast error calculation is he using that reveals this information?

A) MAD
B) CFE (bias)
C) MAPE
D) MSE

Question 14

Forecasting has become extremely accurate, especially since the development of the S&OP process.

Question 15

Which of the following does a forecast always assume?

A) Base demand always moves in a positive direction
B) Business cycles do not exist
C) The past always repeats itself
D) Every forecast is seasonal

Question 16

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

Question 17

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

Question 18

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

Question 19

Bias measures how accurate the forecast is compared to actual demand.

Question 20

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

Question 21

The internal balancing method deals with:

A) price and lead time.
B) inventory and production flexibility.
C) functional silos.
D) channel selection.

Question 22

One type of demand fluctuation is caused by random variation. What is random variation?

A) Errors in inventory management
B) Errors not caught by using exponential smoothing
C) A development that cannot normally be anticipated
D) Failure to properly execute the SO&P process plan

Question 23

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

A) channel orders
B) vendors and suppliers
C) customer demand
D) SO&P processes

Question 24

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.

Question 25

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?

A) Price
B) Lead time
C) Inventory
D) Production flexibility

Question 26

There are two types of demand. What are they, and how do they influence the supply chain?

Question 27

What are the differences and similarities between outbound and inbound logistics systems? Which types of industries would place heavier emphasis on outbound systems? On inbound systems? Explain your choices.

Question 28

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?

A) Simple moving average
B) Weighted moving average
C) Exponential smoothing
D) Benchmarking

Question 29

The weighted moving average method assigns:

A) a value in each period being averaged.
B) a weight greater than 1.
C) information based on a simple average.
D) a weight to each previous period.

Question 30

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

Question 31

What are the similarities between the CPFR and S&OP processes? What are the differences?

Question 32

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?

Question 33

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?

A) Cumulative sum of forecast errors
B) Exponential smoothing for trends
C) Mean squared error
D) Mean absolute deviation

Question 34

There are at least three forecasting methods. Name them and choose one to discuss in more detail, including advantages and disadvantages.