CPF Sample Exam 3 Question Title * 1. Top management will be supportive of the forecasting function if the forecaster demonstrates: (select all that apply) How much the competition has profited from having the forecasting function in place How much inventory will be reduced How much customer service will improve How much the quality of the products will improve Question Title * 2. To be an effective forecaster, you should: Know how to present and sell forecasts to end users Know the algorithm of the most sophisticated forecasting models Not make any compromise with your numbers Make sure everyone in the organization recognizes you as a decision maker Question Title * 3. In presenting forecasts to upper management, the forecaster should: Give forecasts of all the SKUs by distribution centers and channels Show how forecasts performed in the past Show models used and why Outline a procurement plan Question Title * 4. Before accepting forecasts, users should ask about: Data used The assumptions made in preparing them Past accuracy record All of the above Question Title * 5. All statements are true except: Forecasting is a combination of art and science The larger the variations in the data, the larger the error Promoted products are easier to forecast than non-promoted ones No forecasting process is perfect in picking up turning points Question Title * 6. For effective forecasting, the forecaster should do each of these except: Work with Sales and Marketing Be confrontational if anyone tries to adjust his/her numbers Avoid burning bridges and making enemies Be of service to forecast users on an on-going basis Question Title * 7. You are responsible for forecasting the sales of a popular product that has volatile demand. Your bonus is based on forecast accuracy, but management has set unrealistically high accuracy goals. How do you maximize your bonus? I. Ask marketing people to reduce demand variability as much as they can II. Tell management it is unachievable III. Collaborate with your customers to get their Point of Sales (POS) data, forecasts, plans, and outstanding inventory IV. Reduce demand to meet supply I & IV II & III I & III IV Question Title * 8. Which of the following does senior management want? (select all that apply) The company to be able to adapt to change Early warning signals with enough time to respond Reliable forecasts of each SKU Reliable sales revenue, cost and profit projections Question Title * 9. When reporting forecasts, you should do everything except: Report forecasts in as much detail as needed by different functions If a forecast deviates from the norm, explain Use a standard format Make sure they match with the budget Question Title * 10. All of the following are correct except: The forecaster should be able to defend why a particular model or procedure was used Forecaster should try to understand the cause of an error There is no need to discuss forecast errors because forecasting is an inexact science The forecaster should be able to explain the assumptions made in preparing forecasts Question Title * 11. Upper management's greatest concern with respect to forecasts is: Which model was used in preparing forecasts Whether or not adjustments were made for outliers Which action plan is needed based on the forecasts to meet company objectives How much data were used in preparing forecasts Question Title * 12. Forecasts will be well received by management if we: Give them along with their implications on the budget and bottom line profit Remain focused on the technical issues surrounding forecasting Give them errors in different metrics such as MPE (Mean Percent Error), MAPE (Mean Absolute Percent Error) and WMAPE (Weighted Mean Percent Error) Give them along with spreadsheets of data used Question Title * 13. Since forecasters know a great deal about the company and its business processes, they should: Make sure they influence top management decision making Provide information to management that can aid them in making decisions Challenge the decisions made by management during forecast presentations All of the above Question Title * 14. When presenting forecasts to upper management make sure that you (select all that apply): Understand their needs Understand their academic and business background Understand their hobbies Understand their knowledge about forecasting Question Title * 15. If management sets a goal for forecast accuracy, then: With sufficient investment and effort, it will be achieved All efforts should be made to achieve that goal regardless of its cost and benefit Review the historical data and the nature of demand to determine whether the goal is achievable All efforts should be made to improve the accuracy of every product Question Title * 16. The forecaster should: Always accept the input of different functions, since they are experts in their area Evaluate the input of different functions for reasonableness and potential bias Prepare forecasts by consolidating judgmental forecasts from the key business functions Make changes as directed by participating functions Question Title * 17. When presenting a forecast: It is the role of a forecaster to describe the reasons why the forecast makes sense It is the role of a forecaster to describe the key supporting assumptions It is the role of a forecaster to describe the expected error All of the above Question Title * 18. The forecaster should not reveal: The error experienced in the past when presenting a forecast to management The expected error when presenting a forecast to management The key assumptions underpinning the forecast when presenting a forecast to management None of the above Question Title * 19. The forecast presentation will be effective if forecasts are: Compared to reference points (benchmarks), plans, and/or budget, even if they are below them Made to be the same as assumed in plans Made to be the same as budget Made to be the same as reference points (benchmarks) and/or business goals Question Title * 20. When presenting a forecast to upper management, which of the following should be included: Products that are more difficult to forecast, and why Products that are easier to forecast, and why Point and range forecasts All of the above Question Title * 21. It is extremely difficult for a forecaster to get: Unbiased input from Production people if their bonus is based on customer service Unbiased input from Salespeople if their bonus depends on the quota assigned to them Unbiased forecasts from Marketing people if their advertising budget is tied to forecasts All of the above Question Title * 22. In winning the confidence of management, the forecaster has to do everything except: Build trust with forecast users Make sure that forecast users understand the algorithm used in preparing forecasts Know how to handle questions, concerns, and objections Follow up after the forecast presentation to see if they understand the numbers and are using them appropriately Question Title * 23. A forecast is a tool for management decision making. If the forecast does not match the goal, management should: Assess the risk of deviating from the forecast Modify the forecast Modify neither the plan, nor the forecast None of the answers is correct Question Title * 24. Large and complicated forecasting models: Are expensive to maintain Are hard to explain to upper-level management Are often distrusted by management All of the above Question Title * 25. How influential your presentation will be depends on: Perceived accuracy of the information presented Perceived importance of the information presented Perceived credibility of the forecaster All of the above Question Title * 26. Personal Information Name Company Email Address For further information, please contact educationsupport@ibf.org! Done
