Understanding Demand

Understanding Demand - 2004-05-01 02:00:00 | Supply Chain Managemen... http://www.scmr.com/ oblige/print/330547-Understanding_Demand.php « Back | Print Understanding Demand By John T. Mentzer and secernate A. Moon -- Supply Chain Management Review, May 1, 2004 some(prenominal) depict chain managers have only a clouded idea of what re bothy drives entreat. Fewer still are neat about where demand fits in the omen equation or how demand can in sorting the sales and operations cookery (S&OP) process. Understanding the different facets of demand and recognizing which types of demand have what stir will help managers gain new value from their supply chains. A manufacturer of set outing equipment thought it had a forecasting problemâ€"with good reason. Many of its products were characterized as slow movers with spikes, displaying a jumpy demand pattern where four units sell ace week, three the next, five the next, 10,000 the next, and three the week after that. The spikes seemed unforecastable. They came in different sizes and at irregular times and were not related to to promotional events. They caused huge supply chain disruptionsâ€"expedited production and overtime, or excessive inventory to meet the localize, or late orders to suppliers that resulted in higher procurement costs.

One of the most affected products was a ballast, the little transformer that helps to start up a fluorescent light bulb. Ballasts are bought as replacement items. Regular purchases by do-it-yourselfers all over the country produced aggregated demand in the form of fairly smooth, predictable ordering policies of home-supply stores nationwide. But big demand spikes popped up when commercial property managers were upgrading all the lights in, say, a overlarge office building. Property managers regularly make such decisions when the evaluate electricity savings justify the replacement costs of new, more(prenominal) energy-efficient ballasts. Its not untypical for a large office building to have 10,000 ballasts that need... If you want to get a full essay, order it on our website: Ordercustompaper.com

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