This essay Supply Chain and Demand Model has a total of 704 words and 8 pages.
Supply Chain and Demand Model
Instructor Sam Pirnazar
July 20, 2015
Supply Chain Model
Supply Chain Management is the model of controlling the processes, materials, and different things that contribute in producing and delivering goods and services. Planning and communication is what drives management in the Supply Chain model. It is crucial for management to plan for future demand based on current and previous demand in order to inform the main stakeholders of the company so they can make informed decisions at the right time in order to avoid any major issues on costs or delays in production, etc. Managers must work continuously with the company’s stakeholders to avoid any misunderstanding and to make sure there are no delays in productions and no unnecessary overhead.
Supply Chain Management main objective is to enhance the flow. Which means that all areas are working on the same strategic plan to improve their current processes and cooperate with each other so everyone will benefit at the end and the outcome on productivity and processes is successful. This will create possible revenues for the organization and all stockholders will be happy. Bottom line, supply chain management requires the commitment of every partner in the supply chain to closely work to coordinate all aspects of the manufacturing process to the completion. This engagement will create an extended positive enterprise over and above the organization.
Supply Demand Model
The law of demand is defined as the amount of goods required and its direct relation to the good’s price. Popular products are in high demand these days especially if there is a deal when it comes to the price. If the price of a good or product increases, or goes up, then people will usually buy less of it, due to the price increase. These people will usually find another product, which is less expensive and then decide to purchase that product instead. To really understand the point of the law of demand, then you should look at things like this, if there is a product that you would really love to own, but you cannot afford the price tag, imagine if that price of the product was reduced, to say, half the cost. You would definitely decide to buy the product, most likely along with many other customers. Therefore, the quantity demanded goes up, as the price of a product goes down. So to be clear, according to the class text, “when the price goes up, quantity demanded goes down. When price goes down, quantity demanded goes up” (Colander, 2013, Chapter 1).
Relationship between supply chain and the supply and demand mode
When it comes to supply chain and the supply and demand model there is a strong relationship, without one or the other neither would exist. The supply chain exists with the demand of the consumers and the products or goods that is needed by the public. The supply chain is described as the system of companies or operations that work together to design, produce, and deliver a product or service to a market, extending from the extraction of basic materials to the distribution of finished products or services. Think about it when a company is built there is a reason behind it someone saw that there is a demand for a certain product or service and so they build their company in order to produce the supply of that product or service. Once the company or building is built begins another part of the supply chain and all of this would not be possible if it wasn’t for the demand from the consumer.
So the relationship between the supply chain and the supply and demand model is that each operates independently, but it does dependent on the other. The Supply chain is then needed to research and acquire those supplies needed to build or produce the good or service for the company. The two combine to create the supply and demand for the company. When demand goes up, the supply chain will increase supplies to meet the demand
Supply Chain Management. Retrieved July 17, 2015 from http://www.businessdictionary.com/definition/supply-chain-management-SCM.html#ixzz3gArb4tFBe
Colander, D.C. (2013). Economics (9th ed.). Retrieved from The University of Phoenix ebook.
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Topics Related to Supply Chain and Demand Model
Distribution, Supply chain management, Consumer theory, Market, Demand, Supply and demand, Supply chain, Supply, Economics, Factor market, Demand chain management
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