Demand Risk In Supply Chains
Red Hat News, March 24th, 2023
A fundamental goal for supply chains of physical goods is matching up available inventory with demand.
You can have too little of something (understock). During the pandemic, everyone became familiar with this scenario, whether it involved waiting months for a new car or scrounging all the local markets for toilet paper. These examples illustrate two of the ways in which businesses can fail to align with customer demand. In the case of automobiles, shortages in key components like microprocessors constrained what manufacturers could build. In the case of toilet paper, because people weren't in offices (and were maybe hoarding a bit) caused a spike in consumer demand.