How is uncertainty manifested in supply chain management, and how have you managed it? Please provide an example.

Question

Accepted Answer

Uncertainty in supply chain management arises from various factors, requiring strategic approaches to mitigate risks effectively.

Demand variability: Fluctuations in customer demand can lead to stockouts or excess inventory. Example: Implementing demand forecasting tools.
Supply disruptions: Natural disasters or supplier failures can halt production. Example: Diversifying suppliers to reduce dependency.
Lead time variability: Unpredictable shipping times can affect delivery schedules. Example: Establishing safety stock levels to buffer against delays.
Regulatory changes: New regulations can impact sourcing strategies. Example: Staying updated on compliance requirements to avoid disruptions.
Market volatility: Economic changes can affect pricing and availability. Example: Using hedging strategies to manage price fluctuations.

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