Chapter 1 question: Why is it important to match supply and demand? If a manager

Question

Chapter 1 question:

Why is it important to match supply and demand? If a manager believes that supply and demand will not be equal, what actions could the manager take to increase the probability of achieving a match?

Chapter 3 questions:

National Scan, Inc sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:

Month Sales (000 units)

Feb.       21

Mar.      20

Apr.       17

May       22

Jun.       20

Jul.         24

Aug.       22

Plot the monthly data on a sheet of graph paper.

Forecast September sales volume using each of the following:

(1) The naive approach

(2) A five month moving average

(3) A weighted average using .60 for August, .30 for July, and .10 for June

(4) Exponential smoothing with a smoothing constant equal to .20, assuming a a March ­forecast of 19(000)

(5) A linear trend equation

Which method seems least appropriate? Why? (Hint: Refer to your plot from part a.)

What does use of the term sales rather than demand presume?

Explanation / Answer

1. It is important to match supply and demand because it directly effects the cost of the business. If the supply is more and the demand is less, the business spends extra amount in manufacturing and storing the goods which will not generate the revenue. If the demand is more and the supply is less the business will not be able to earn profit from its products. Therefore it is important to match supply and demand. There are many ways to match supply and demand. These are :

a. Demand forecasting : In demand forecasting the the demand for the products and services are predicted by various methods.

b. sales and operation planning : In this method the salea and operation department colaborate so as to match supply and demand.

c. Demand management : In demand managemet the demand for the products and services are forecasted, planned and managed.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.