Balancing Supply and Demand
-Balancing is concerned with elapsed time between consumption and manufacturing as balancing inventory reconciles supply availability with demand.
-Particularly useful in linking variations of consumption with manufacturing in case of seasonal products.
-Balancing seasonal production and year round consumption such as orange juice or year round production and seasonal consumption of blankets or knitting wool.
-In case of sort selling season, manufacturers, wholesalers and retailers are forced to take an inventory position far in advance of peak selling season.
-From retailers’ perspective, an inventory position is planned six months prior to the peak selling period.
-The main function of balancing supply and demand is to ensure that investment in stocks is liquidated completely within the season.
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