How do push supply chains make inventory decisions?

Push supply chains make inventory decisions primarily using forecasts for inventory levels. This approach relies on data analysis and predictions about demand to determine how much inventory to produce and stock ahead of time. By anticipating demand, push systems aim to ensure that products are available when needed, allowing for efficient production scheduling and inventory deployment.

In this model, decisions are driven by projected sales and anticipated needs rather than immediate consumer demand. For example, a company might use historical sales data and market research to predict how much of a product will be required over a certain period, thus establishing inventory levels that align with these forecasts.

This contrasts with other inventory decision-making strategies, such as responding directly to actual demand, which is characteristic of pull supply chains, where production is based on current customer orders. Additionally, randomness or cost-minimization strategies alone do not address the systematic, predictive nature of the decisions in a push supply chain framework.