Final answer:
It is important for organizations to establish strategies to manage demand in order to balance supply and demand, optimize resource allocation, and meet customer expectations. The four demand conditions that organizations need to identify before planning demand management strategies are stable demand, seasonal demand, fluctuating demand, and unpredictable demand.
Step-by-step explanation:
It is important for an organization to establish strategies to manage demand because it allows them to effectively balance supply and demand, optimize resource allocation, and meet customer expectations. By implementing demand management strategies, organizations can anticipate and respond to changes in demand, reduce costs, and improve overall operational efficiency.
The four demand conditions that organizations need to identify before planning demand management strategies are:
- Stable demand: When the demand for a product or service remains relatively constant over time, organizations can adopt strategies to ensure consistency in supply and production.
- Seasonal demand: Some products or services have a seasonal demand pattern, where demand fluctuates based on the time of year. Organizations need to plan their production and inventory management accordingly to meet peak demand during specific seasons.
- Fluctuating demand: In certain industries, demand may fluctuate due to external factors such as economic conditions or market trends. Organizations must develop strategies to quickly adjust production levels and supply chain operations to meet changing customer demands.
- Unpredictable demand: In dynamic markets or during product launches, demand may be highly unpredictable. Organizations must be agile in their response and have contingency plans in place to manage sudden surges or drops in demand.