What are push and pull systems, and name at least one inventory ...

[cherise1989]

What are push and pull systems, and name at least one inventory management system that is a push or pull system.

Question 2

Advertising time costs more during popular TV shows because a larger audience is reached.
 a. True
  b. False
 Indicate whether the statement is true or false

[ktidd]

Answer to Question 1

The pull approach relies on customer orders to move product through a logistics system, while the push approach uses inventory replenishment techniques in anticipation of demand to move products.

A principal attribute of pull systems is that they can respond quickly to sudden or abrupt changes in demand because they produce to an order and have very little, if any, finished goods inventory. This is especially true for products where the final addition of value can be postponed. Alternatively, push systems produce to inventory in anticipation of demand, thus making their ability to adapt to changing demand volumes and preferences limited.

Pull systems usually run on short-term forecasts, allowing them the flexibility to adapt to swings in demand. On the other hand, push systems use longer-term forecasts that allow for scale economies in manufacturing but result in high finished goods inventories. These high levels of finished goods inventories can make shelf life a problem in push systems, while this is not an issue for pull systems.

Characteristically, JIT is a pull system since organizations place orders for more inventory only when the amount on hand reaches a certain minimum level, thus pulling inventory through the logistics system as needed. Having established a master production schedule, MRP develops a time-phased approach to inventory scheduling receipt. Because they generate a list of required materials in order to assemble or manufacture a specific amount of finished products, MRP and MRP II approaches are push based.

Answer to Question 2

True