Differentiate between a push system and a pull system. Include the advantages of each.

A push system produces goods in advance of customer demand using a forecast of sales and moves them through a supply chain to points of sale where they are stored as finished-goods inventory. A push system has several advantages, including immediate availability of goods to customers and the ability to reduce transportation costs by using full-truckload shipments to move goods to distribution centers. Push systems work best when sales patterns are consistent and there are a small number of distribution centers and products.

A pull system produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages. Pull systems can greatly lower cost by reducing inventory requirements and ensuring that the customer has the latest possible technology or the freshest goods if they are perishable.

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