Certified Supply Chain Professional (CSCP) Practice Exam

What does the forecasting method entail?

1. Choosing qualitative or quantitative approaches based on data

2. Only qualitative techniques

3. Strictly quantitative models

4. Random selection of techniques

The correct answer is: Choosing qualitative or quantitative approaches based on data

The forecasting method involves systematically selecting between qualitative and quantitative approaches based on the specific context and available data. This choice allows organizations to leverage both types of forecasting techniques, utilizing qualitative methods when subjective judgment and expert insights are valuable—such as in new product development or uncertain market conditions. Conversely, quantitative approaches can be employed when historical data is available and can be statistically analyzed, which is often the case for established products or stable markets. Combining these methods often yields more accurate forecasts, as different situations may require different approaches. Organizations can thus adapt their forecasting strategies to fit the data they have and the nature of what they are trying to predict, ensuring a more robust forecasting process.