Certified Professional Public Buyer (CPPB) Practice Test

Which method is most effective for forecasting usage trends of pool facility chemicals?

1. Fixed period method

2. First in, first out

3. Weighted moving average method

4. Economic ordering quantity method

The correct answer is: Weighted moving average method

The weighted moving average method is particularly effective for forecasting usage trends of pool facility chemicals due to its ability to account for varying historical data relevance. This method assigns different weights to past usage data, allowing more recent data to have a greater influence on the forecast than older data. This is essential in scenarios where consumption patterns may change over time due to factors like seasonal use, changes in facility attendance, or the introduction of new chemicals. By focusing on recent trends and adjusting the weights, pool operators can improve their accuracy in predicting future chemical needs, which is crucial for effective inventory management and cost control. This method facilitates a responsive and informed approach to chemical ordering, ensuring that supply meets demand without overstocking or running into shortages. In contrast, the fixed period method adopts a uniform approach regardless of fluctuations in consumption patterns, while the first in, first out method primarily addresses inventory turnover rather than forecasting. The economic ordering quantity method focuses mainly on minimizing holding and ordering costs, which is not centered on predicting usage trends per se. This distinction highlights the unique utility of the weighted moving average method for accurately forecasting the usage of pool facility chemicals.