What distinguishes push supply chain systems from pull supply chain systems?

The distinction between push and pull supply chain systems primarily revolves around how they manage production and inventory in relation to demand. In a push system, production is driven by forecasts. Companies predict demand for their products and manufacture items accordingly, storing inventory to meet anticipated needs. This approach often leads to the risk of overproduction or underproduction if the forecasts are inaccurate.

On the other hand, pull supply chain systems operate on actual demand. They manufacture and deliver products in response to customer orders or consumption patterns, which means they are more reactive and can adapt to changes in consumer behavior more effectively. This can lead to more efficient use of resources and less waste since production aligns more closely with real-time demand.

Therefore, the correct answer highlights that push systems produce based on forecasted demand, while pull systems are designed to respond to actual demand, leading to a fundamental difference in how both systems operate in terms of inventory management and production strategy.