Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following describes qualitative forecasting?

1. A method based strictly on numerical data

2. A method incorporating subjective judgment and opinion

3. A purely algorithm-driven approach

4. A technique excluding historical data evaluation

The correct answer is: A method incorporating subjective judgment and opinion

Qualitative forecasting is primarily characterized by its reliance on subjective judgment, opinion, and insights rather than solely on quantitative data. This approach is particularly useful in scenarios where historical data may be scarce or when forecasting for new products or market trends that lack significant historical precedent. This method often incorporates expert opinions, market research, and focus groups to derive predictions about future outcomes based on intuition and experience. In contrast, methods that lean heavily on numerical data, purely algorithm-driven approaches, or those that completely dismiss historical data would not be classified as qualitative. Therefore, the defining feature of qualitative forecasting is its emphasis on human insights and judgments to predict future events.