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Purchase Order Management Best Practices by Michael Beitler, Arun Gupta, Ehap Sabri

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POM AT THE OPERATIONAL LEVEL

REPLENISHMENT PHILOSOPHIES

Two well-known types of replenishment philosophies are push-driven replenishment and pull-driven replenishment. Push-driven philosophy is primarily forecast driven, whereas pull-driven philosophy is demand driven. Several factors will be considered before a firm decides to adopt the philosophy that best serves their business (Table 2.1). Yet both of these philosophies may exist at the same time in the same firm or supply chain. For example, an automotive firm may use a pull-driven philosophy with suppliers, but continue to apply a push-driven philosophy with dealers. An automotive firm ...

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