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Demand chain management is aimed at managing complex and dynamic supply and demand networks. [1] (cf. Wieland/Wallenburg, 2011)Demand-chain management (DCM) is the management of relationships between suppliers and customers to deliver the best value to the customer at the least cost to the demand chain as a whole.
It takes longer for a push-based supply chain to respond to changes in demand, which can result in overstocking or bottlenecks and delays (the bullwhip effect), unacceptable service levels and product obsolescence. In a pull-based supply chain, procurement, production and distribution are demand-driven rather than to forecast.
Demand forecasting plays an important role for businesses in different industries, particularly with regard to mitigating the risks associated with particular business activities. However, demand forecasting is known to be a challenging task for businesses due to the intricacies of analysis, specifically quantitative analysis. [4]
Supply chain as connected supply and demand curves. In microeconomics, supply and demand is an economic model of price determination in a market.It postulates that, holding all else equal, the unit price for a particular good or other traded item in a perfectly competitive market, will vary until it settles at the market-clearing price, where the quantity demanded equals the quantity supplied ...
The challenge of improving the link between demand and supply has occupied many supply chain specialists in recent years; and concepts such as "demand-driven supply chains" (Demand Driven MRP), and customer-driven supply chains have attracted attention and have become the subject of conferences and seminars. [5]
The classic supply-chain approach has been to try to forecast future inventory demand as accurately as possible, by applying statistical trending and "best fit" techniques based on historic demand and predicted future events. The advantage of this approach is that it can be applied to data aggregated at a fairly high level (e.g. category of ...
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