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Push-based and pull-based supply chains are two important approaches to managing the flow of products, information, and resources from suppliers to retailers and ultimately to customers. In retail trade, the choice between these approaches directly affects inventory levels, product availability, operating costs, customer satisfaction, and the overall efficiency of supply chain management. The major difference between them lies in what triggers the movement of goods. A push-based supply chain is driven mainly by forecasts and anticipated demand, whereas a pull-based supply chain is driven by actual customer demand and sales. In a push-based supply chain, products are manufactured, transported, and stocked in advance on the basis of expected future demand. Retailers and manufacturers forecast how much customers are likely to purchase and arrange production and distribution accordingly. The movement of goods begins from the supplier or producer and moves toward the retailer and customer. Therefore, the system is called “push” because products are pushed through the supply chain before actual customer demand occurs. For example, a retail store may estimate that customers will purchase a large quantity of winter clothing during the coming season. On the basis of this forecast, the retailer places large orders with suppliers before winter begins. The supplier manufactures and ships the products, and the retailer stores them in warehouses and stores. The goods are therefore available before customers actually demand them. Forecasting is ________ _________ __________ _____ __________ _________ __________ ______ _________.
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