Question

Advantage and disadvantage of supply and demand

Answer 1

Supply and demand is an economic model. Customers have demand and producers will supply. The quantity demanded by customers and the quantity supplied by producers in a competitive market play significant role to the pricing. 

Price will function to equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity. 

To your question, there is no such advantage and disadvantage of these two notions as such.

Answer 2

Answer:

Advantages

Effective demand planning can assist supply chain managers by accurately forecasting product production and expected company’s revenue.

For example, if a company has consistently forecasted too many products for a monthly promotion, demand planning allows for two things:

A framework to investigate previous forecasts and identify why the forecasted amounts were predicted in this manner.

A methodical approach to adjust forecasts based on actual company data and more

Explanation:

Disadvantages

. More Complicated Than Helpful

Numbers are Full of Uncertainty

Cognitive BiasKeep it Simple

Many businesses, especially smaller ones, believe that demand planning is far too complex. They do not have the manpower nor the time to invest in creating a viable demand planning forecast.

A statistical approach may be the right idea for certain campaigns, but to keep each campaign consistent, it is best to keep the planning process as simple as possible.

Here are some other common methods that businesses use:

Time series methods (Looking at historical data.)

Regression methods (Examining historical averages to hypothesize future relationships based on common variables.)

Heuristic methods (Leveraging the experience and expertise of company leaders to execute off their ideas and projections.)

Consensus approach method (Voting among key players across the organization.)