Actual Demand

Certified Inventory Optimization Professional (CIOP) is an end-to-end supply chain certification program. The certification consists of 30 modules focusing both on traditional and futuristic topics. The traditional topics are introduction to supply chain management, all about inventory, strategic business planning, forecasting, demand management, capacity management, sales and operations planning (S&OP), master scheduling (MPS), materials requirements planning (MRP) and production activity control (PAC). It also includes topics on procurement, warehousing, transportation, distribution, and packaging. The topic on the future trends such as Blockchain, Internet of Things (IoT), Robotic Process Automation (RPA), Machine Learning (M/L) and Artificial Intelligence (AI). There is a significant focus on supporting technologies such as forecasting and process mapping tools such as Microsoft Visio. In addition to the above indicated topics the participants need to master over 3000 terminologies in supply chain management.

In economics, actual demand, on the other hand, is the level of supply of a product that consumers can buy at different prices over a given period of time, usually over a lifetime. The relation between supply and demand is called the supply-and-demand curve. Supply is effected by demand. Thus, when more people want a product more quickly, the supply is increased and when people do not want that product very quickly, then the supply is decreased.

There are many economic factors like population growth, unemployment rate, industrial production, budget deficits, balance of trade, international trade, etc., that determine actual demand. Some of these factors like population growth leads to an increase in population, which, in turn, creates employment. Unemployment rate can reduce spending power and lead to reduction of industrial production. On the other hand, budget deficits lead to decrease in industrial production and increase unemployment rate.

One of the main purposes of supply and demand analysis is to determine what the likely real or expected value of a product is. It helps determine how market participants, like customers, decide whether to buy or sell. If the forecasted value of the product is higher than the actual demand, then the price will be lower than the actual demand; and vice versa. Therefore, a higher actual demand usually leads to higher prices. This result is called the mean absolute deviation, which indicates the deviation of the mean average price from its mean absolute value.

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