Certified Supply Chain Professional (CSCP) Practice Exam

At which step are historical data used to test the forecast?

1. Prepare data

2. Test forecast through historical data

3. Visualize the data

4. Perform sales and operations planning

The correct answer is: Test forecast through historical data

Testing the forecast through historical data is a crucial step in the forecasting process. This step involves comparing the forecasted values against actual historical data to assess accuracy and effectiveness. By doing this, organizations can validate their forecasting models and make necessary adjustments to improve future projections. During this phase, historical data acts as a benchmark. Forecasters analyze how past forecasts aligned with actual outcomes, which helps in identifying patterns, trends, and potential biases in the forecasting models. This evaluation can help in refining the forecasting approach, ensuring that it accounts for seasonal variations, market changes, and other influencing factors. The other choices represent different stages of the forecasting process. Preparing data involves collecting and organizing relevant information necessary for the forecasting process, while visualizing data pertains to the graphical representation of the data for easier interpretation. Performing sales and operations planning is a broader process that includes integrating forecasts into operational strategies, which happens after the testing phase. Thus, confirming that historical data is specifically assessed at the step dedicated to testing the forecast is essential for refining the accuracy and reliability of future forecasts.