Life span of supply and demand
A supply of items is good only while the items are consumable. Some items degrade over time.
Examples include pharmaceuticals, food stuffs, beverages, and flowers. The time period during which an item can be kept stocked for consumption is known as its shelf life. The expiration date marks the end of the shelf life of an item.
The time window in which current supply can be used to fulfill demand is referred to as the life span. The date beyond which a supply can no longer be shipped to customers because supply has degraded is called the ship-by date. The ship-by date is always earlier than or equal to the expiration date of the supply.
Sterling Order Management System Software allows users to specify a minimum ship-by date during order creation, which takes into consideration the preferred remaining life span of a time-sensitive item at the time of its shipment during the promising and scheduling processes.
Demand has a life span too. For example, a customer may order a product today contingent on delivery within two weeks from the date of the order. The life span of the demand is two weeks.
One of the most important aspects of inventory management is managing and understanding the life span of supplies and demands.
A demand is fulfilled if and only if the following are true:
- The quantity of the supplies is sufficient to fulfill demand.
- The life span of one or more supplies overlaps the life span of the demand.
Consider the following example:
The life span of Supply 1 does not overlap with the life span of Demand 1. Therefore, the demand remains unfulfilled. Demand 1 cannot be fulfilled because there is no available supply to cater to it and a freshly ordered supply does not arrive within the lead + processing time.
The life span of Supply 2 overlaps with the life span of its demand. Therefore, Demand 2 can be fulfilled.