APICS Certified Supply Chain Professional (CSCP) — Question 498

The use of a seasonal index as a forecasting technique measures the ratio of the:

Answer options

• A. average seasonal demand to the average demand for all periods.
• B. average demand for all periods to the average seasonal demand.
• C. average seasonal demand to the standard deviation of the demand for all periods.
• D. standard deviation of the seasonal demand to the standard deviation of demand for all periods.

Correct answer: A

Explanation

The correct answer, A, accurately describes the seasonal index as it compares the average seasonal demand to the overall average demand, providing insight into seasonal variations. Options B, C, and D do not reflect the correct relationship measured by a seasonal index, as they either reverse the ratio or involve standard deviation, which is not relevant to this calculation.