Supply Chain and Demand Model - Essay Example

Supply Chain and Demand Model There is a relationship between supply chain and the supply and demand model. Indeed, a supply chain involves a system that seeks to supply products or services that are in demand as presented in a demand model. A reliable supply chain integrates suppliers with consumers with the aim of reducing delays and inventory costs (Versloot, 2013). Moreover, supply chain management controls the supply of products or services with the aim of meeting the customers’ demand.

An efficient supply chain allows suppliers and consumers to share demand information that enhances market efficiency. Notably, the supply chain eliminates unsuitable suppliers and consumers that demean effective supply chain management. In a demand driven supply chain, consumers control the supply chain since the supply must provide everything that the consumer needs.Indeed, a demand-driven network forces the supply chain to produce new products at a speed defined by the demand model (Versloot, 2013).

To enhance sustainable profits, an organization must ensure that its supply responds to demand. Since the supply chain is nonlinear, suppliers focus on the actual demand and purchase patterns as defined in the demand model (Versloot, 2013). Supply meets demand forecast in lead times. However, there is a need to adjust the supply at each level of the supply chain since actual demand is different from forecasted demand (Versloot, 2013). Notably, the relationship between supply chain and the supply and demand model determines the prices and quantities of products in the market.

ReferenceVersloot, P. (2013). Exploring the Supply Chain as a Demand Chain: A 4-part Series. Retrieved from: http://www.e-consolutions.com/blog/2013/supply-vs-demand-chain-management-blog-1/