Plan and Manage Demand: Free CPIM Practice Questions

Question 1

A pet store owner notices that dog food sales are roughly the same each week throughout the year. The owner wants to start forecasting future demand. What is the most accurate way to describe this type of demand pattern?

Seasonal demand that follows a repeating cycle tied to calendar events Intermittent demand characterized by sporadic orders with irregular timing patterns Trending demand that shows a gradual increase over successive periods Level or stable demand that remains relatively constant over time

Correct Answer: Level or stable demand that remains relatively constant over time

When demand remains roughly the same each week throughout the year with no significant upward or downward movement and no repeating seasonal peaks or valleys, it is classified as level or stable demand, which is the most basic demand pattern in forecasting.

Trending demand would require a consistent upward or downward slope over time, which is not described here. Seasonal demand would show predictable peaks and troughs tied to specific times of year, such as holidays or weather changes. Intermittent demand involves irregular, unpredictable occurrences of orders often with zero-demand periods in between, which contradicts the steady weekly sales described.

The key concept tested is identifying fundamental demand patterns for forecasting purposes.

Question 2

What is the primary purpose of integrating Customer Relationship Management (CRM) data into the demand planning process?

To incorporate customer insights and buying patterns into demand forecasts To automate the generation of purchase orders based on supplier lead times To incorporate customer feedback and service records into warehouse layout planning To incorporate sales team compensation metrics into production scheduling

Correct Answer: To incorporate customer insights and buying patterns into demand forecasts

Integrating CRM data into demand planning allows organizations to leverage customer insights, buying patterns, order histories, and relationship intelligence to create more accurate and responsive demand forecasts.

Automating purchase orders relates to procurement and supply-side execution, not demand planning. Incorporating sales compensation metrics into production scheduling conflates unrelated HR and manufacturing functions. Using customer feedback for warehouse layout planning confuses demand planning with facilities design.

The key concept tested is how demand planning benefits from cross-functional data integration, specifically using customer-facing data sources like CRM systems to enhance forecast accuracy through better understanding of demand signals.

Question 3

A company sells office supplies with steady demand averaging around 200 units per month. There is no visible trend or seasonality in the data. A new planner needs to produce a forecast for next month using the simplest appropriate approach. Which method should the planner use?

Holt's double exponential smoothing to capture the level and trend components Simple moving average based on recent monthly demand observations Weighted moving average with heavier weights assigned to the earliest periods in the series Winters' triple exponential smoothing to account for level, trend, and seasonal factors

Correct Answer: Simple moving average based on recent monthly demand observations

When demand is stable with no trend or seasonality, a simple moving average is the most appropriate and simplest forecasting method, as it smooths out random fluctuations by averaging recent observations to project the next period.

Holt's double exponential smoothing is unnecessary because it adds a trend component, which does not exist in this data. Winters' triple exponential smoothing adds both trend and seasonal components, making it overly complex for stable, non-seasonal demand. A weighted moving average with heavier weights on the earliest periods would be counterproductive, as older data is generally less relevant than recent data.

The key concept tested is matching forecasting method complexity to the demand pattern characteristics.

Plan and Manage Demand

CPIM - Plan and Manage Demand Example Questions

Question 1

Question 2

Question 3

Master Production & Inventory Management