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Chapter 2: 20Q (page 160)

Question: The customer order decoupling point determines the position of what in the supply chain?

Short Answer

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Answer

The consumer order decoupling point determines the inventory position in the supply chain.

Step by step solution

01

Inventory

Inventory is the stock of goods, i.e., finished products, which the seller's stock to meet an unexpected demand increase. It includes raw materials and the goods or products available for sale. The companies hold onto inventory for either resale or use it to augment the process of production.

02

  Customer order decoupling point

Based on the environment and location of the customer order decoupling point, i.e., the area between make-to-order and make-to-stock, decides the inventory concentration of finished goods, WIP (work-in-progress), and manufacturing raw material in the supply chain.

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