Demand Shaping and Inventory Management Quiz

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Questions and Answers

What is the recommended minimum horizon for demand management reviews?

12 months

6 months

24 months

18 months (correct)

Which factor can effective communication principles for demand management help minimize?

Competitor actions

Economic changes

Demand variability (correct)

Supply chain complexity

What can lead to negative effects on demand communications?

Communicating uncertainty

Person-to-person interaction

Data automation

Delaying bad news (correct)

What is essential for ensuring effective communications in demand management?

$Person-to-person$ interaction Signup and view all the answers

Which of the following is a factor that the recommended minimum horizon for demand management aligns with?

$Sales$ promotions Signup and view all the answers

What is a potential consequence of delaying bad news in demand communications?

Negative effects on demand communications Signup and view all the answers

What does demand shaping involve?

Convincing customers to buy certain models based on excess inventory Signup and view all the answers

How is the demand plan influenced?

By forecasting, commitments by product and brand management, marketing, and sales, and the business plan and strategy Signup and view all the answers

What is a best practice for producing a demand plan?

To produce a demand plan with at least an 18-month planning horizon and to revise it regularly Signup and view all the answers

What does managing and prioritizing demand involve?

Controlling demand through scheduling, promotions, queues, and rationing Signup and view all the answers

What do collaborative planning, forecasting, and replenishment systems formalize?

The coordination of forecasting and demand plan creation Signup and view all the answers

How are assumptions and uncertainties used in the demand plan addressed?

They should be documented, reviewed, and challenged in the monthly S&OP review process Signup and view all the answers

What is demand management defined as in the APICS Dictionary, 16th edition?

Recognizing all demands for goods and services to support the marketplace and prioritizing demand when supply is lacking Signup and view all the answers

In marketing, what does demand management involve?

Planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services Signup and view all the answers

What are the sources from which demand could come?

Customer order or forecast, interplant requirement, branch warehouse request for a service part, manufacturing of another product Signup and view all the answers

What is the art of synchronizing supply and demand plans known as?

Demand management Signup and view all the answers

What does demand management involve in an organization or extended supply chain?

(1) Recognizing all demands for goods and services to support the marketplace. (2) In marketing: planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services. Signup and view all the answers

What is involved in prioritizing demand when supply is lacking?

Recognizing all demands for goods and services to support the marketplace Signup and view all the answers

What is one of the responsibilities of the demand manager in the S&OP process?

Gathering demand information and performing analytical work Signup and view all the answers

What is a key requirement for effective communication in demand management?

Focusing communications to fit the audience's needs Signup and view all the answers

What is the purpose of consensus review in demand management?

Challenging assumptions and uncertainties to reach an integrated demand plan Signup and view all the answers

Why are feedback and performance monitoring essential in the S&OP process?

For realistic plans Signup and view all the answers

What is the primary role of dashboards in effective communication in demand management?

Presenting key information from the organization's systems Signup and view all the answers

Why is structured communication important in the S&OP process?

To ensure consistency and clarity in information sharing Signup and view all the answers

What is the primary focus of organizational capacity strategies?

Planning demand Signup and view all the answers

According to the APICS Dictionary, what does demand management involve?

Balancing customer demand and firm's output capabilities Signup and view all the answers

What is the aim of demand management?

To produce products or services that satisfy actual customer requirements and expectations Signup and view all the answers

How are marketing terms like order qualifiers and order winners related to demand management?

They relate to a product or service’s ability to compete for a customer’s business Signup and view all the answers

What does exhibit 1-21 show about the cyclical nature of demand management components?

The cycle is shortened at the short-term operational level when demand management principles and technologies are implemented throughout the supply chain Signup and view all the answers

What are the four organizational capacity strategies focused on?

Strategic, tactical, operational, and contingency Signup and view all the answers

Study Notes

Demand Management and Organizational Capacity Strategies

Demand management is essential at various levels of supply and demand planning: long-term strategic needs, medium-term aggregate demand forecasting, and short-term demand forecasting.
It involves analyzing the rate of consumption at different unit levels to match the level of precision to the time scale of the decision and increase forecasting accuracy.
Demand management helps organize multiple sources of supply and demand in organizations with multiple plants and supply chain collaboration efforts.
The APICS Dictionary defines demand management as a process that balances customer demand and a firm’s output capabilities, comprising planning demand, communicating demand, influencing demand, and prioritizing demand.
It aims to influence the organization to produce products or services that satisfy actual customer requirements and expectations.
Marketing terms such as order qualifiers and order winners relate to a product or service’s ability to compete for a customer’s business.
Another purpose of demand management is to convince customers to purchase products and services in a manner that supports business requirements and organizational strategy profitably.
Planning, communicating, influencing, and managing and prioritizing demand can be linked in several ways, including cycling through each component iteratively.
Exhibit 1-21 shows how the demand management components are cyclical, with all components necessary for long- and medium-term planning but with the cycle shortened at the short-term operational level when demand management principles and technologies are implemented throughout the supply chain.
Organizational capacity strategies focus primarily on one of the four components of demand management: planning demand, communicating demand, influencing demand, and managing and prioritizing demand.
Four organizational capacity strategies include planning demand (fixed high capacity strategy), communicating demand (highly variable capacity strategy), influencing demand (moderately variable capacity strategy), and managing and prioritizing demand.
Each strategy involves a different approach to meeting demand and capacity planning, with a focus on planning, communication, and influence to optimize capacity.

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Test your knowledge on demand shaping and inventory management techniques used to influence customer purchasing behaviors and optimize operational requirements.