Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is a characteristic of associative forecasting?

1. It disregards historical data

2. It uses prior data to predict future values

3. It is primarily based on expert judgment

4. It focuses only on qualitative data

The correct answer is: It uses prior data to predict future values

The characteristic of associative forecasting is that it uses prior data to predict future values. This method relies on historical relationships between variables to make predictions about future outcomes. By analyzing past data, it identifies and uses the patterns and trends within that data to forecast what is likely to happen in the future. This can include a variety of quantitative approaches, such as regression analysis, where relationships between independent and dependent variables are explored to generate forecasts. This approach stands out due to its reliance on empirical evidence to make informed predictions, distinguishing it from methods that might rely solely on subjective assessments or disregard historical trends entirely. Associative forecasting combines both quantitative techniques and historical data analytics, allowing for a more data-driven approach to forecasting.