Strategic Supply Chain Management Practice Exam

What are push processes also referred to as?

1. Reactive processes

2. Forecasted processes

3. Demand-driven processes

4. Customer-responsive processes

The correct answer is: Forecasted processes

Push processes are often referred to as forecasted processes because they rely on demand forecasts to drive production and inventory decisions. In a push system, products are made in anticipation of customer demand. This means that companies produce goods based on projected sales rather than actual customer orders. The term "forecasted" reflects the reliance on estimates of future demand to determine how much product to manufacture and when to distribute it. By producing items in advance of actual sales, organizations aim to maintain a steady supply of products, albeit with the risk of surplus inventory if the forecasts do not match actual consumer behavior. Understanding this concept is essential for managing supply chain efficiency, as miscalculations in forecasts can lead to either excess inventory or stockouts, both of which can negatively impact customer satisfaction and profitability. In contrast, the other options describe different systems where demand drives processes rather than forecasts, highlighting the unique nature of push processes in supply chain management.