Certified Supply Chain Professional (CSCP) Practice Exam

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Prepare for the Certified Supply Chain Professional Exam with a comprehensive quiz featuring multiple choice questions and essential study material. Gain the knowledge and confidence needed to excel in your certification journey!

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What does a positive MAD value indicate about demand?

Demand is below the forecast level
Demand is greater than forecast level
Demand matches forecast
Forecasting process is perfect

The correct answer is: Demand is greater than forecast level

A positive Mean Absolute Deviation (MAD) value indicates the average absolute difference between forecasted and actual demand. When the MAD is positive, it signifies that there is some level of divergence between what was forecasted and the actual demand observed. In this context, if the demand is greater than the forecast level, it contributes to a higher MAD value, reflecting a consistent over-forecasting of demand. Essentially, a positive MAD directly showcases that the actual demand tends to exceed the forecasted demand, leading to larger deviations. This insight is crucial for supply chain professionals, as it highlights the need for adjusting forecasting methods or practices to enhance accuracy and align forecasts more closely with actual market conditions.