Which system is described as functioning in response to forecasts?

The push system is characterized by functioning in response to forecasts. In a push system, production and inventory decisions are based on anticipated demand rather than actual demand. Organizations using this system typically analyze market data and historical trends to predict customer needs, allowing them to proactively produce goods and manage inventory levels accordingly. This approach enables companies to prepare for expected sales and ensures that products are available for customers, but it can also lead to excess inventory if the forecasts are inaccurate.

In contrast, pull systems operate based on actual customer demand, meaning production is initiated only when there is a confirmed order. Hybrid systems combine elements of both push and pull methods, utilizing forecasts as well as responding to real-time demand. Understanding the dynamics of push systems is crucial for effective supply chain management, as it affects inventory levels, production schedules, and overall responsiveness to market fluctuations.