What describes the “push” production strategy?

• A. Production based on actual customer orders
• B. Building inventory based on demand forecasts
• C. Minimizing work-in-progress inventory
• D. Producing only when stock is depleted

Answer: (B)

The “push” production strategy is characterized by building inventory based on demand forecasts. This approach relies on anticipating customer demand and producing products accordingly, in advance of actual orders. By creating a stockpile of goods based on predicted market needs, firms aim to meet potential customer demand without delays when orders come in. This strategy allows for a more streamlined inventory management but can also lead to excess inventory if forecasts are inaccurate.

In contrast, producing based on actual customer orders aligns more with a “pull” production strategy, where production is driven by current demand rather than forecasts. Similarly, minimizing work-in-progress inventory focuses on efficiency in production processes rather than anticipating demand. Lastly, producing only when stock is depleted is also indicative of a “pull” system, emphasizing responsiveness to current inventory levels rather than proactive forecasting. Therefore, the emphasis on forecasting and inventory in the “push” strategy makes the second choice the correct description.