CPIM Practice Exam

What is the first step in the forecasting process?

1. Set level of aggregation and units of measure

2. Gather and visualize the data

3. Choose the forecasting technique

4. Determine process

The correct answer is: Determine process

The first step in the forecasting process involves determining the process, which encompasses understanding the overall framework and objectives of the forecasting task. Establishing a clear definition of what is to be forecasted, the scope and purpose of the forecast, and the necessary steps involved allows for a structured approach going forward. By determining the process, you effectively lay the groundwork for subsequent activities such as setting the level of aggregation and units of measure, gathering and visualizing the data, and ultimately choosing an appropriate forecasting technique. Defining the process ensures that all subsequent steps align with the goals of the forecast and that the methodology chosen is suitable for the data and context of the situation. This foundational understanding is essential before engaging in any analysis or selection of techniques, as it guides all further decisions in the forecasting endeavor.