Which statement best defines a pull model in the supply chain?

Which statement best defines a pull model in the supply chain?

• A. Production is based on forecasted demand.
• B. Production based on actual customer demand.
• C. Production is driven by supplier capacity alone.
• D. Production is driven by random variability in demand.

Answer: (B)

A pull model is driven by actual customer demand. In this approach, production starts in response to a customer order or a clear demand signal, not because we forecast what might be needed. This keeps inventory smaller, reduces waste, and improves responsiveness because you’re aligning output with what customers are actually requesting rather than with predictions that can be wrong. Producing based on forecasted demand is a push approach, where items are built in anticipation of future sales. Relying on supplier capacity alone centers the flow on what suppliers can supply rather than what customers want. Producing due to random variability isn’t a deliberate system; it reflects unpredictable demand rather than a controlled pull mechanism.

A pull model is driven by actual customer demand. In this approach, production starts in response to a customer order or a clear demand signal, not because we forecast what might be needed. This keeps inventory smaller, reduces waste, and improves responsiveness because you’re aligning output with what customers are actually requesting rather than with predictions that can be wrong.

Producing based on forecasted demand is a push approach, where items are built in anticipation of future sales. Relying on supplier capacity alone centers the flow on what suppliers can supply rather than what customers want. Producing due to random variability isn’t a deliberate system; it reflects unpredictable demand rather than a controlled pull mechanism.