Certified Supply Chain Professional (CSCP) Practice Exam

In supply chain terminology, what does demand pull refer to?

1. The proactive management of stock levels

2. Triggering material movement only when ready

3. Initiating production based on forecasts

4. A method for reducing waste in production

The correct answer is: Triggering material movement only when ready

Demand pull in supply chain terminology specifically refers to a system where the movement of materials and the initiation of production are triggered by actual customer demand, rather than forecasted demand. This approach ensures that production is aligned with current market needs, allowing for more efficient use of resources and reducing the likelihood of excess inventory. When the demand pull system is in place, materials and products are only moved or produced when there is a confirmed need, which helps minimize waste and reduces costs associated with overproduction or holding excess stock. This method contrasts with traditional inventory systems that often rely on forecasts that can be inaccurate, leading to potential overproduction or stockouts. Thus, demand pull reflects a more responsive and efficient supply chain strategy that emphasizes the importance of customer-driven processes in driving the flow of materials and production activities.