A supply chain strategy known as a “push system” bases decisions about inventory and production on projected demand rather than actual customer orders. In order to predict demand and guarantee availability at the point of sale, products are “pushed” through the supply chain. Push systems run the risk of overproduction and excess inventory if forecasts are off, even though they can avoid stockouts during times of high demand. For these systems to strike a balance between cost effectiveness and service levels, precise demand forecasting and meticulous inventory control are necessary.
