With reduced demand uncertainty, can a supply chain manager better match supply and demand by reducing both overstocking and understocking?
Understand the Problem
The question is asking whether reduced demand uncertainty allows a supply chain manager to better align supply and demand by minimizing both overstocking and understocking. This involves understanding the relationship between demand uncertainty and supply chain efficiency.
Answer
True
True. When demand uncertainty is reduced, supply chain managers can more effectively align supply with demand, leading to a decrease in both overstocking and understocking situations.
Answer for screen readers
True. When demand uncertainty is reduced, supply chain managers can more effectively align supply with demand, leading to a decrease in both overstocking and understocking situations.
More Information
Reducing demand uncertainty is a key objective in supply chain management. Strategies such as improved forecasting, better market intelligence, and enhanced collaboration with partners can help achieve this.
Tips
A common mistake is assuming that demand uncertainty can be completely eliminated. In reality, it can only be reduced, not eliminated entirely. Therefore, supply chain strategies should also focus on managing the remaining level of uncertainty.
Sources
- Supply Chain Management 6e Chopra/Meindl - Course Hero - coursehero.com
- Chopra Scm5 Tif Ch13 | PDF | Inventory | Forecasting - Scribd - scribd.com
- Solved: With reduced demand uncertainty, a supply chain manager ... - gauthmath.com
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