Certified Supply Chain Professional (CSCP) Practice Exam

If the forecast method is deemed unsuitable, what should be the next step?

1. Continue with the existing method

2. Revise the forecasting methods

3. Decrease sample size

4. Ignore recent data

The correct answer is: Revise the forecasting methods

When a forecast method is found to be unsuitable, the most logical and effective next step is to revise the forecasting methods. This is important because an unsuitable forecast can lead to poor supply chain decisions, affecting inventory levels, customer satisfaction, and overall operational efficiency. Revising the forecasting methods allows for an assessment of the underlying assumptions, data sources, and techniques being used. It provides the opportunity to identify more appropriate methods that can accommodate the characteristics of the data and the needs of the business. For instance, if the market conditions have changed or if there's a new trend that the current method does not reflect, adjusting the forecasting approach can provide more accurate and actionable insights. In contrast, continuing with the existing method could perpetuate inaccuracies and misalignment with actual market trends. Decreasing the sample size may lead to an even less reliable forecast, as it could eliminate important data points that provide context and trend information. Ignoring recent data undermines the forecasting process, as it disregards relevant factors that could impact future performance. Therefore, the emphasis on revising forecasting methods is crucial for maintaining an effective and responsive supply chain.