SCMN 3710 Test 2 – Strickland (Chapters 7–10) Study Guide, Practice Questions
and Review 2026
What is the definition of demand management according to Blackwell & Blackwell? -
✔✔Focused efforts to estimate and manage customer's demand, with the intention of using
this information to shape operating decisions.
What is the purpose of a demand manager? - ✔✔To further the abilities of firms in the Supply
Chain, but particularly manufacturing through the customers, to collaborate on activities related
to the flow of product, services, information, and finances.
What are the four methods used to manage the imbalance between supply and demand? -
✔✔Price, Lead time, Inventory, and Production flexibility
Which supply and demand imbalance management methods are Internal? - ✔✔Inventory and
Production Flexibility
Which supply and demand imbalance management methods are External? - ✔✔Price and
Lead Time
What is Independent Demand? - ✔✔Demand for a primary item, base demand.
What is Dependent Demand? - ✔✔Demand for a component for a primary item.
Demand directly influenced by demand for independent item.
Random Variation - ✔✔Cannot be anticipated, usually the cause to hold safety stocks.
Ex. Movies
,Trends - ✔✔Consistent increase / decrease over time.
Ex. Gold, cars, gas
Seasonality - ✔✔Repeating pattern tied to calendar
Ex. Retailers on holidays
Business Cycle - ✔✔Uncontrollable trends related to overall economic conditions.
How to calculate Forecast Error? - ✔✔Error = Actual - Forecast
Mean Absolute Deviation (MAD) - ✔✔•Take absolute value of each error
•Sum them up
•Divide by # of periods
Mean Absolute Percent Error (MAPE) - ✔✔•Find % for each error
•Sum them up
•Divide by # of periods
How is Sales and Operations Planning (S&OP) supposed to work? - ✔✔1) Analyze historical
results (statistical forecast)
2) Demand Planning (marketing)(adjusted forecast)
3) Supply Planning (operations)(capacity constraints)
4) Sales - Ops Resolution (agreed forecast)
, 5) Executive Commitment
How is Collaborative Planning, Forecasting, and Replenishment
(CPFR) different from S&OP? - ✔✔Takes place across multiple firms in the supply chain.
How does Marketing feel about inventory levels? - ✔✔Want to sells as much as possible, often
times overlooking what's actually in the inventory.
How does Finance feel about inventory levels? - ✔✔Want as little inventory on the books as
possible to avoid unwanted charges / costs.
How does Manufacturing feel about inventory levels? - ✔✔? Wants to produce whatever is
needed to add to the inventory.
How does Logistics feel about inventory levels? - ✔✔? Wants to sell as what's left in the
inventory before adding more.
What is the definition of Order Management? - ✔✔The collection of processes and actions
involved in the successful delivery of a product to a client.
Organization attempts to change the manner by which its customers place orders.
What is the definition of Customer Service? - ✔✔Anything that touches the customer,
including all actives that impact information flow, product flow, and cash flow between the
organization and its customers.
and Review 2026
What is the definition of demand management according to Blackwell & Blackwell? -
✔✔Focused efforts to estimate and manage customer's demand, with the intention of using
this information to shape operating decisions.
What is the purpose of a demand manager? - ✔✔To further the abilities of firms in the Supply
Chain, but particularly manufacturing through the customers, to collaborate on activities related
to the flow of product, services, information, and finances.
What are the four methods used to manage the imbalance between supply and demand? -
✔✔Price, Lead time, Inventory, and Production flexibility
Which supply and demand imbalance management methods are Internal? - ✔✔Inventory and
Production Flexibility
Which supply and demand imbalance management methods are External? - ✔✔Price and
Lead Time
What is Independent Demand? - ✔✔Demand for a primary item, base demand.
What is Dependent Demand? - ✔✔Demand for a component for a primary item.
Demand directly influenced by demand for independent item.
Random Variation - ✔✔Cannot be anticipated, usually the cause to hold safety stocks.
Ex. Movies
,Trends - ✔✔Consistent increase / decrease over time.
Ex. Gold, cars, gas
Seasonality - ✔✔Repeating pattern tied to calendar
Ex. Retailers on holidays
Business Cycle - ✔✔Uncontrollable trends related to overall economic conditions.
How to calculate Forecast Error? - ✔✔Error = Actual - Forecast
Mean Absolute Deviation (MAD) - ✔✔•Take absolute value of each error
•Sum them up
•Divide by # of periods
Mean Absolute Percent Error (MAPE) - ✔✔•Find % for each error
•Sum them up
•Divide by # of periods
How is Sales and Operations Planning (S&OP) supposed to work? - ✔✔1) Analyze historical
results (statistical forecast)
2) Demand Planning (marketing)(adjusted forecast)
3) Supply Planning (operations)(capacity constraints)
4) Sales - Ops Resolution (agreed forecast)
, 5) Executive Commitment
How is Collaborative Planning, Forecasting, and Replenishment
(CPFR) different from S&OP? - ✔✔Takes place across multiple firms in the supply chain.
How does Marketing feel about inventory levels? - ✔✔Want to sells as much as possible, often
times overlooking what's actually in the inventory.
How does Finance feel about inventory levels? - ✔✔Want as little inventory on the books as
possible to avoid unwanted charges / costs.
How does Manufacturing feel about inventory levels? - ✔✔? Wants to produce whatever is
needed to add to the inventory.
How does Logistics feel about inventory levels? - ✔✔? Wants to sell as what's left in the
inventory before adding more.
What is the definition of Order Management? - ✔✔The collection of processes and actions
involved in the successful delivery of a product to a client.
Organization attempts to change the manner by which its customers place orders.
What is the definition of Customer Service? - ✔✔Anything that touches the customer,
including all actives that impact information flow, product flow, and cash flow between the
organization and its customers.
