•As it links a firm with its customers, it helps create marketing and manufacturing initiatives into an integrated efforts.
•It resolves conflicting interface between marketing & manufacturing.
-As marketing is dedicated to delighting customers, it would like to maintain broad product line with high inventory regardless of each product’s profit potential. By doing so, any customer’s requirement, no matter how small or large would be satisfied.
-Traditional mindset in manufacturing is to control cost, which is achieved by long production runs. Continuous manufacturing processes maintain economies of scale and reduce per unit cost. Therefore, a narrow line of products is mass produced.
-Inventories are kept to resolve the inherent conflict between these two philosophies.
-The above is achieved by forward deployment of inventory throughout the logistical system in anticipation of future sales on the basis of forecasted information.
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