Wednesday, December 13, 2017

Concept of demand

Demand refers to the quantities of a commodity that the consumers are able and willing to buy at each possible price during a given period of time, other things being equal.

In supply chain, the demand meaning having the capacity to fulfill that commitment on a huge scale, without exposing the company to massive liability in the event of a sudden economic downturn.

Demand management is one of the most difficult elements of supply chain management to get operating well. Demand management has been defined as the process that balances customer requirements with supply chain capabilities and those activities that range from determining or estimating the demand from customers, through converting specific customer orders into promised delivery dates, to helping balance demand with supply.
There are significant classifications of demands:
*Demand for consumers’ goods and producers’ goods.
*Demand for perishable and durable goods
*Autonomous (direct) and derived (indirect) demand
*Individual buyer’s demand and all buyers’ (aggregate/market) demand
*From an industry demand
*Demand by market segments and by total market

Demand for a good depends in several factors and varies as any one or more of these factors change. Some of the most important factors determining demand for a commodity of an individual household are its own price, prices of other goods, consumers’’ income, tastes and preferences.
Concept of demand
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