What does demand variability refer to?

Demand variability refers to the changes in demand for a product over time, capturing the fluctuations and unpredictability inherent in consumer purchasing behavior. This concept is critical for supply chain management as it influences inventory levels, production schedules, and overall planning.

Understanding demand variability allows businesses to respond effectively to shifts in consumer demand, whether seasonal trends, economic changes, or unexpected global events. By tracking and analyzing these changes, organizations can better forecast future demand, adjust their procurement strategies, and manage their suppliers accordingly, ensuring they are not overstocked or understocked. This adaptability is essential for maintaining efficiency and customer satisfaction in a competitive marketplace.