Demand Management

Demand is the need of value created by a customer. The better you know your ustomer's perference, the better chance you will supply the goods or services to your customer.

As a manufacturer, you should understand your product's elastricity (elastic or inelastic demand). How will consumers respond to the price offered? Whether you increase your price which will affect the demand? (Assume demand is independent.)

On the other hand, the level of competition in the industry will also affect your position as a supplier. Intense competition (a lot of suppliers) will reduce/limit your orders from customers if the total market is stable.

In the APICS dictionary, it defines the demand management as follow:

"Demand management -1) The function of recognizing all demands for goods and services to support the marketplace. It involves prioritizing demand when supply is lacking. Proper demand management facilitates the planning and use of resources for profitable business results. 2) In marketing, the process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services to bring about transactions that meet organizational and individual needs."

For more definition and meaning on supply chain terminology, you can reach APICS web-site (www.apics.org).

APICS - The Association for Operations Management.