APICS Supply Chain Professional CSCP Question # 190 Topic 20 Discussion

Given the context of introducing a new product family with no existing competitors and uncertain demand patterns, the most appropriate strategy is to:

Current Product Family (To Forecast): Continue producing the established product family based on demand forecasts. This approach leverages historical sales data and existing market understanding to maintain efficient production and distribution.

New Product Family (To Order): Produce the new product family only after receiving orders from distributors. This minimizes the risk associated with overproduction and inventory holding costs for a new product with uncertain demand.

Producing both product families to forecast (A) or to order (B) does not account for the differing levels of market maturity and demand predictability. Producing the new product family to forecast (D) would be risky due to the lack of historical data and demand uncertainty.

References

"Supply Chain Management: Strategy, Planning, and Operation" by Sunil Chopra and Peter Meindl.

APICS Dictionary, 16th edition.