Practice Quiz

Supply Chain Management

Category - Demand

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What should both companies and their supply chains be aware of about demand forecasting?
  1. That forecasts show the mirror image of what will happen in the future.
  2. That forecasts can be wrong.
  3. That forecasts diminish human efficiency.
  4. They should not be aware of demand forecasting.
Explanation
Answer: B - Companies and supply chain managers should be aware that forecasts are sometimes wrong and can cost a firm a lot damage if relied on completely. When forecasting, therefore, one should include both the expected value and its ratio of forecast error so that if the values are not correct remedies can be taken.
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