Although a forward buy is often the retailer's appropriate response and increases their own profits,it usually increases demand variability with a resulting increase in inventory and flow times within the supply chain.

Question

Hayley Pfaff · Accepted Answer

Final Answer : True, Explanation :  A forward buy, which involves purchasing large quantities of a product at a discounted price for future inventory needs, may lead to increased demand variability due to factors such as changes in customer preferences or market conditions. This, in turn, can result in an increase in inventory levels and longer flow times within the supply chain. While a forward buy may benefit the retailer's profits in the short term, it can also create challenges for the supply chain in managing inventory and meeting customer demand.

Although a forward buy is often the retailer's appropriate response and increases their own profits,it usually increases demand variability with a resulting increase in inventory and flow times within the supply chain.

Definitions

Learning Objectives

Learning Objectives

Related questions