Certified Supply Chain Professional (CSCP) Practice Exam

Which forecasting method is considered more common and less complex?

1. Associative forecasting

2. Delphi method

3. Time series forecasting

4. Naive forecasting

The correct answer is: Time series forecasting

Time series forecasting is considered a common and less complex method due to its straightforward approach of analyzing historical data to identify patterns and trends over time. This method relies on the assumption that past behavior is a good indicator of future behavior, making it easier to apply for many situations. Time series forecasting typically involves using statistical techniques such as moving averages, exponential smoothing, or seasonal decomposition. Its applicability in various industries, from finance to sales, adds to its popularity. Additionally, since it does not require extensive data about external variables or complex modeling, the resulting simplicity makes it accessible for practitioners looking to implement forecasting quickly and effectively. In contrast, other methods like associative forecasting involve understanding the relationships between different variables, which can require more sophisticated data analysis and modeling. The Delphi method relies on expert opinions and group consensus, adding complexity to the process. Naive forecasting may seem simple, but it usually involves a basic approach of assuming that the next period will equal the most recent observation, which, while easy, does not often capture trends and is not as robust as time series methods.