BUSA 356 Lecture Notes - Lecture 5: Operations Management, Supply Chain, Westjet
15 Jul 2016
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Demand: number of bananas daughter going to eat at any given week. Supply: the number of bananas he buys in the grocery store. Never going to know how many supply to get in real world. Ex: never going to know how many of the same size shoes going to sell. Supply: how many retail stores are going to put into a store. Disadvantages of stocking too much: supply is bigger to demand resulting in markdown, sales, discount price down. Disadvantages of supplying too little: loosing profits on how many short (tradeoff) Ordering too much loosing money equal to discount. Product with high margins usually managers want the first situation. Take the risk of trying to advance the ball then opposing team starts the game games them the opportunity to shoot. Tradeoff if tried there might be a touchdown. Doesn"t just apply to products and supply chains.
