Asked by
Verified
Manufacturer-driven substitution increases overall profitability for the manufacturer by allowing some aggregation of demand,which reduces the inventory requirements for the same level of availability.
Manufacturer-Driven Substitution
A process where manufacturers suggest or implement alternative products or components to fulfill customer needs, often due to supply constraints or to offer a better value.
Aggregation Of Demand
Combining multiple demands for goods or services to gain efficiencies or insights, often used in forecasting or capacity planning.
Inventory Requirements
The specific amount of stock needed to meet customer demand while minimizing holding costs.
- Understand the impacts of precision in demand forecasting and the role of aggregation in inventory control.
- Determine the variables affecting the suitable level of buffer inventory and grasp the compromises involved.
Verified Answer
Learning Objectives
- Understand the impacts of precision in demand forecasting and the role of aggregation in inventory control.
- Determine the variables affecting the suitable level of buffer inventory and grasp the compromises involved.
Related questions
A Goal of Any Supply Chain Manager Is to Reduce ...
A Reduction in Supply Can Help Dramatically Reduce Safety Inventory ...
Aggregation Reduces the Standard Deviation of Demand Only If Demand ...
In Most Supply Chains,the Key to Reducing the Underlying Forecast ...
The Appropriate Level of Safety Inventory Is Determined by the ...