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CIOP Module-3 Sample Question & Answer with Explanation

In: Inventory
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Scenario: PureH2O, a mineral water bottling company, would like to forecast the demand for the 1 litre water bottles for the month of June. It would like to use one-weight for the oldest month and thrice the weight for the latest month to forecast using time-series. The company has huge demand during summer months and abysmal demand during winter months. The per-capita income of the citizens is on increasing trend and the hygiene conscious also shows great improvement. These two factors result in an unpredictable growth year over year.

Question: Which one of the following options represent the data required for a better time series forecasting to forecast for the month of June?
A) Seasonal indexes and actual for the months of June of previous three years with the actual demand with weights 1, 2 and 3 respectively.
B) Actual demands of June for the three previous years with weights 3, 2 and 1 respectively.
C) Actual demands of March, April and May with weights 1, 2 and 3 respectively.
D) Seasonal Indexes for the months of March, April and May of this year and the actual demand of March, April and May with weights 1, 2 and 3 respectively.

Answer: Seasonal Indexes for the months of March, April and May of this year and the actual demand of March, April and May with weights 1, 2 and 3 respectively.

Tags: Inventory

Written by IISCM

Integrated Institute of Supply Chain Management, a unit of Fhyzics Business Consultants Private Limited specialising in supply chain management consulting and education. IISCM trains and certifies SCM professionals in procurement, supply chain management, inventory, and warehousing.

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