Mismatch in Supply and Demand (Essay Sample)

Demand Management
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Demand Management
Demand management is organizational efforts to collect new ideas, projects and needs to create a portfolio. The process allows organizations to adjust their abilities to meet varying demands or manage the demand levels using marketing and supply chain management strategies. Demand management depends largely on data accuracy, which requires collaboration on forecasting (Hussein, 2020). In such an effort, organizations align internal management with value chain partners in determining the level, location, mix, and timing of demand. The acquired information is necessary to plan the logistics, merchandise, and budgeting process. Ideal demand management improves forecasting and business efficiency in supply chain operations. It can become a competitive advantage by allowing organizations to anticipate demand accurately and influence proper planning. Demand management can also enable organizations to generate additional revenues by aligning production with market trends.
Mismatch in Supply and Demand
A mismatch in supply and demand arises when the amount supplied does not balance with its need in the market. It arises when a product's inventory surpasses or is below the market needs. The problem is common in business and occurs in along sequences in the supply chain. For example, when Apple launched iPhone 4, 5, 6 &7, consumers were required to wait for between two and four weeks before their orders are fulfilled (Hussein, 2020). The mismatch arose since the company lacked the capacity to produce these new models to meet the market demand.
A mismatch in demand and supply destabilizes the equilibrium of a product or service (goods) because a business cannot deliver what the target market wants. The quantity and price of a good influence this mismatch. The quantity of a product that businesses incur for producing, selling, and delivering a good determines its selling price (Matsebatlela & Mpofu, 2015). It is also influenced by the position of a good or its necessity in the market. For example, if the price for superior goods falls, their demand may also follow because it will not cater to the consumers' aesthetic or prestigious needs. Similarly, if the quality of a good falls, its demand will reduce. A mismatch in demand and supply can result in companies supplying too much when the demand is low, resulting in surplus inventory. This mismatch leads to companies incurring significant losses for overproduction and holding surplus inventory. When demand exceeds the quantity supplied, firms incur potential sales losses, especially in a perfectly competitive market. Aligning the demand and supply requires intensive market analysis to establish the demand patterns of a good.
Strategies for Influencing Demand
Companies use different strategies to influence demand. Among them is assessing the markets of their goods. This strategy involves getting perfectly balanced, which is the equilibrium between demand and supply. It requires significant efforts designed to understand the market (Matsebatlela & Mpofu, 2015). An example is understanding suppliers and other stakeholders involved in the production and delivery of a good. Companies build relationships