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Matching Demand and Supply

CashOS: Matching Demand and Supply

One of the major concepts in economics is that of ‘Demand and Supply’. Everything in our economy depends on these two factors. If there is too much Demand and supply, prices increase. If the other way round, ie. Too much supply and no Demand, then prices drop.

If we look at any area, there is some kind of equilibrium between these two. For example, there are cases when farmers have a bumper crop of a certain product and the prices drop drastically. However, if we look at history, most of the cases these are cyclical and tend to settle down at a level where no one makes exorbitant profits for a prolonged period of time. However, when it tends to go out of control, the Government steps in to control the situation.

Now let’s look at the Demand-Supply question when it comes to a Business. Every business has several stakeholders. At a minimum, it could be the customers, the business itself and the suppliers. If it is more complex, there could be multiple entities at each stage.

The Demand as we know if the ‘pull’ from the Customers or market. This is often translated to the production needs by the Sales team. In a simple structure where there is only Distribution, it could be a simple operation of procurement and warehousing that serves this function.

Now let’s say there is too much ‘Demand’ from the Sales guys, the Supply may be adequate or may not. However, if this was not planned, then the Warehouse people will most probably include a ‘buffer’ to cater to such additional Demand from the market.

However, if there is no proper communication, and planning then this tends to swing too much thereby leading to loss of sales or excessive inventories. Both of which are dangerous for the Business’s operations. The best way is to match Demand and Supply so that there is a balance that is maintained at all times.

Now how can you maintain this balance? There is no Government which comes to the help of a Business. The best way is to have a simple, technology-driven process which ensures all of this happens automatically, without depending on any individuals.

How can a Business achieve this balance without having to invest tons of money? Try CashOS.

You can learn how you can match Demand and Supply in your business at less than the cost of a cup of coffee? Try CashOS

Please reach out to us at info@CashOS.com for more details.

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