Demand Fulfillment

As an example for the first need above: “The quantity of the individual order will increase the variability of demand that our company (supply chain) will experience, because If we receive additional orders It Implies a large Increase In the quantity our customers want us to supply, or If we receive fewer orders It means a larger decrease in the quantity our customers want us to supply. ” See up. 22-25 of the custom text for additional information that may be helpful.

Implied demand uncertainty- demand uncertainty imposed on the supply chain because of the customer needs it seeks to satisfy Quantity of individual order: An increase in the quantity of individual orders will cause the implied demand uncertainty to be greater since there will be more variation In customer needs among the product orders. Therefore, the demand rate is going to much more difficult to predict for several unique customer orders than if would be if less individual orders occurred.

Response time (customer desired lead time): An increase in the lead time or the amount of time given to fulfill the customer needs process will result in a decrease in the implied demand uncertainty. The supply chain will have more time respond to specific customer needs and will have the ability to manage customer accounts more efficiently resulting In a more stable demand rate. Variety of products- The Implied demand uncertainty will be much greater if there is an increase in the variety of products required for customer needs.

For instance, if a firm has a wide variety of products available, it is going to be much more difficult to determine the demand rate for any given product then it would be if only the firm had just one product line available. Also, since there will be much more variation occurring among customer orders It will chain. Service level (Product availability) – An increase in the level of services provided or product availability will cause the implied demand uncertainty to increase.

If a firm suddenly has more services or products available it becomes unknown how exactly customers will respond and therefore will result in an unpredictable demand rate imposed on the supply chain. For instance, adding new services available may cause short term rises in demand but it becomes more official to predict when the demand rate will level out among specific services over time. Desired innovation- If the level of product innovation increases it becomes relatively unpredictable how consumers will respond to new product offerings causing the implied demand uncertainty to rise.

For instance, although early adoptive consumers may have a high demand for the new product offering, several more conservative consumers may be less willing to try an updated version of the product they currently consume. Therefore, this will make it difficult for the supply chain to redirect the demand rate based on differences in consumer desires. Price (sensitivity to) – If price sensitivity is one of the main customer needs for a product offering this will increase the implied demand uncertainty.

The firm will have to allocate more time establishing a credible price that will not reduce consumer demand for products. Therefore, until a stable market price is established, it becomes much more difficult for the supply chain to determine the right order quantity among the varying materials. 2. Which of the “systematic components” discussed in class would you expect in the emend for bottled water? (3 points) I would expect the seasonal component to have the greatest impact on the changes in demand for bottled water.

For instance the seasonal trend may predict that the demand for bottled water is lowest in January, with a gradual increase in demand peaking in the summer months and then decreasing again causing a repeating cycle. 3. You’ve been engaged by the Fascia Ulna Italian restaurant on South Thereon as a consultant to assist them with forecasting future demand for their pizza products. In order to get the consulting contract with Ulna 2, you needed to indicate why forecasting would be important to their demand fulfillment.

What did you tell them about why forecasting is important for demand fulfillment? (3 points) Forecasting is important for demand fulfillment because it serves as guide for how often and in what quantities you should order certain products through your supplier in order to maximize revenue and be able to maintain customer satisfaction. Forecasts are needed in order to establish a production schedule that contains the optimum annuity of materials needed.