what is the difference between demand uncertainty and implied demand uncertainty? And what benefits can be achieved by forecasting them?
Answers
Answer:
Implied demand uncertainty is demand uncertainty imposed on the supply chain because of the customer needs it seeks to satisfy.
Difference: demand uncertainty reflects the uncertainty of customer demand for a product, whereas implied demand uncertainty is the resulting uncertainty for only the portion of the demand that the supply chain plans to satisfy (customer needs).
Certain benefits can be achieved:
owing factors:-
When a company projects its sales considering the desire factor it creates a level of high implied uncertainty.
When the product’s demand exceeds its supply. Sometimes a product is so successful that the demand increases many folds in no time. The manufacturer cannot accurately predict such outbursts hence in turn the supply is low and demand remains high causing imbalance. For example in India when Mahindra first launched XUV 500, it was such a hit that the company had long waiting periods.
Implied uncertainty is highly influenced when several rival companies launch a latest design in the same segment. For example it can be boldly seen between mobile companies like apple, Samsung, htc, etc. Many times it happens all these companies launch their phones at short intervals and in this case no one company can be sure of maintaining a monopoly in the market in that period as there are lots of uncertainties in predicting a customer’s mind when there is so much variety available to him at once.