Which one of the following is not a basic option for altering demand?
A. Promotion
B. Backordering
C. Pricing
D. Subcontracting
E. Exporting
The correct answer and explanation is :
Correct Answer: E. Exporting
Explanation:
In operations and supply chain management, altering demand refers to strategies used to adjust customer demand to better match production capacity and resource availability. The basic demand-altering strategies typically focus on influencing customer purchasing behavior, shifting demand over time, or managing order fulfillment.
Analysis of the Given Options:
- Promotion (Option A)
- Promotion includes advertising, discounts, and marketing campaigns to stimulate demand.
- It encourages customers to purchase products, especially during off-peak periods.
- A common demand-shifting strategy used in industries like retail, hospitality, and services.
- Backordering (Option B)
- Backordering allows firms to accept customer orders even when inventory is unavailable, promising future delivery.
- It helps manage demand by deferring fulfillment to a later period when capacity is available.
- Used frequently in manufacturing and e-commerce.
- Pricing (Option C)
- Pricing strategies such as discounts, surge pricing, and dynamic pricing influence demand.
- Lower prices can stimulate demand, while higher prices can suppress it.
- Often used in industries like airlines, hotels, and consumer goods.
- Subcontracting (Option D)
- Subcontracting involves outsourcing production to third-party manufacturers to meet excess demand.
- While it primarily affects supply, it indirectly helps manage demand by ensuring product availability.
- Common in automotive, electronics, and apparel industries.
- Exporting (Option E) – NOT a Basic Option for Altering Demand
- Exporting refers to selling products to international markets.
- It is a market expansion strategy rather than a method to alter demand in an existing market.
- Unlike pricing, promotion, or backordering, exporting does not directly shift or manage demand fluctuations in a company’s primary market.
Conclusion:
Among the given options, Exporting (E) is not a basic option for altering demand, as it focuses on expanding into new markets rather than modifying demand patterns within a specific market.