Operations Management: Processes and Supply Chains, 12th Edition

Managing Demand

Before we get into the tools and techniques for forecasting demands, it is important to understand that the timing and sizing of customer demand can often be manipulated. Accurately forecasting customer demand is a difficult task because the demand for services and goods can vary greatly. For example, demand for lawn fertilizer predictably increases in the spring and summer months; however, the particular weekends when demand is heaviest may depend on uncontrollable factors such as the weather. These demand swings are costly to satisfy for any process, even if they are predictable. However, managers can often do two things to alleviate the pains of demand swings: First, understand the demand pattern they are facing; second, employ ...