To avoid this situation, which of the following should the organization have considered?

A home goods manufacturer runs an annual sales promotion, and the promotion achieves success beyond the firm’s expectations. As a result, the firm runs short of a critical material. The firm purchases additional material, only to be left with excess inventory once the promotion runs its course.

To avoid this situation, which of the following should the organization have considered?
A . Kepner-Tregoe cycle
B . Demand planning
C . Seasonal demand
D . Product life cycle

View Answer

Answer: B

Explanation:

Demand planning is a vital process that helps a company predict future demand for its products. By accurately forecasting demand, the company can adjust its production and inventory levels, avoiding both shortages and excess inventory. In this case, better demand planning would have allowed the firm to anticipate the impact of the sales promotion, preventing excess inventory.