Supply Chain Management

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 forecast what customer demand will be in order to plan the level of available capacity and inventory.

Answer: False

Difficulty: Hard

The resulting forecast accuracy enables supply chains to be both more responsive and more efficient in serving their customers.

5. The result when each stage in the supply chain makes its own separate forecast is often a match between supply and demand, because these forecasts are often very different.

Answer: False

Difficulty: Moderate

6. When all stages of a supply chain produce a collaborative forecast, it tends to be much more accurate.

Answer: True

Difficulty: Easy

7. Leaders in many supply chains have started moving toward collaborative forecasting to improve their ability to match supply and demand.

Answer: True

Difficulty: Moderate

8. Mature products with stable demand are usually the most difficult to forecast.

Answer: False

Difficulty: Moderate

9. Forecasting and the accompanying managerial decisions are extremely difficult when either the supply of raw materials or the demand for the finished product is highly variable.

Answer: True

Difficulty: Easy

10. Forecasts are always right.

Answer: False...