Why is Demand Variability a Concern for Business Leaders?
For executives and business leaders, managing demand variability is crucial because it directly affects the company's operational efficiency and profitability. High demand variability can lead to overstocking or stockouts, both of which are costly. Overstocking ties up capital in unsold inventory, while stockouts can lead to missed sales opportunities and customer dissatisfaction. Leaders must balance these opposing risks to maintain a healthy supply chain.