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Demand Management: Integrating Demand And Supply In Real Time

Demand Management: Integrating Demand and
Supply in Real Time
A Symposium by the
MIT Center for Transportation & Logistics
Cambridge, Massachusetts
September 22-23, 2004
This report was prepared October 2004 by Andrea and Dana Meyer of Working Knowledge®
meyerwk@workingknowledge.com for the Center for Transportation & Logistics (CTL), and
edited by Larry Lapide and James B. Rice, Jr. of CTL. Please contact Jim Rice (jrice@mit.edu
or 617.258.8584) if you have any questions or if you would like to discuss this report.
Table of Contents
Background..................................................................................................................................................1
Executive Summary .....................................................................................................................................2
Themes.........................................................................................................................................................3
1. The Gap between Supply and Demand................................................................................................3
Out of Stock ...................................................................................................................................................3
Overstocks......................................................................................................................................................3
Low Margins ..................................................................................................................................................3
2. Causes of the Gap ...............................................................................................................................4
Biased and Rogue Forecasts...........................................................................................................................4
An Incentive to Cause Problems...