CPIM Practice Exam

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Which characteristic is associated with demand variability?

Mean absolute variation
Seasonal variation
Maturity
Standard deviation

The correct answer is: Seasonal variation

Seasonal variation is closely linked to demand variability as it refers to predictable fluctuations in demand that occur at certain times of the year. These trends can be observed in various industries, such as retail, where sales may increase during holidays or specific seasons. This variability is important for supply chain management, as businesses must prepare for these variations by adjusting inventory levels, staffing, and production schedules accordingly. Understanding seasonal variation helps companies forecast demand more accurately and plan effectively to meet customer needs. This characteristic is essential not only for optimizing operations but also for maintaining customer satisfaction and avoiding stockouts or overstock situations. The other characteristics listed are related to demand analysis but do not specifically focus on the predictable nature of demand changes over time as Seasonal variation does.