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Demand Management Process- (1) The function of recognizing all demands for…

- - - - Order entry and tracking- needs to accurate and be available on demand by the customer. Minimizing entry time and subsequently the lead time.
        
        Order Promising- System should lint to ERP to show actual inventory and production status so customers can be given accurate promises of delivery dates and quantities. Realistic expectations promotes customer satisfaction.
        
        Customer service- will handle inquiries and complaints and authorize returns or repairs.
        
        Documentation and reporting- Order management releases electronic and paper records, including shipping documentation, invoices, and sales orders. Sales orders are usually used internally to authorize release of inventory or to authorize production planning. It is also sent to customers stating terms and conditions of acceptance.
- - - - Product- Products and services designed to determine the combination if features that will make a product a order qualifier along with some competitive differentiators
        
        Price- Determining the price at which the product will make the highest profit. which is a combination of both the profit margin and the number of units sold at the price.
        
        Place- includes both where to sell products and what lead times to offer.
        
        Promotion- Includes sales promotions, advertising, sales incentives for sales persons or retailers, campaign management and public relations.
        
        Selection of sales channels - online, retail etc.
        
        Determine the delivery modes - speed, flexibility and dependability.
        
        Setting inventory policies for distribution inventory.
        
        Cost-volume-profit-analysis- to determine the combination of sales volume and sales price that should be profitable.
        
        Two curves are compared
        
        Break Even Point - the level of production or the volume of sales at which the operation is neither profitable nor unprofitable. The break even point is the intersection of the total revenue and total cost curves.
        
        Above this, the organization will be profitable and below this there will be loss.
        
        Break even in units = (Fixed cost) / (Price per unit - Variable cost per unit)
        [ 500,000/ (40-10) = 16,667]
        
        Total revenue curve
        
        Market penetration pricing or loss leader- marketing may decide to accept loss or low margins to gain market share
        
        1 more item...
        
        There is usually a optimum prize point that maximizes profits at an acceptable level of risk.
        
        Increasing prices will make this curve rise more quickly and shift the break even point.
        
        Based on the assumption of the sales price.
        
        Total cost curve
        
        In inventory theory, the total cost curve for an inventory item is the sum of the costs of acquiring and carrying the item.
        
        In cost-volume-profit (breakeven) analysis, the total cost curve is composed of total fixed and variable costs per unit multiplied by the number of units provided.
        
        Note that grade differs from quality
        
        Selecting names, varieties, sizes, grades, return and warranty policies and service levels.
    - - If demand outstrips supply for a product, demand side can adjust prices and quoted lead times.