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What is push and pull systems?

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Question added by Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company
Date Posted: 2014/09/29
SREEDEVI SUNILKUMAR
by SREEDEVI SUNILKUMAR , Business finance officer , Emirates Airline

Push type" means Make to Stock in which the production is not based on actual demand. "Pull type" means Make To Order in which the production is based on actual demand.

amer jayyousi
by amer jayyousi , Business Development Consultant , freelance

Push Pull systems in manufacturing and stock and parts movement is a manufacturing system where parts and supplies are either pushed into production  or assembly where car bodies are pushed forward and parts are assembled into these bodies .or pulled forward based on demand of assembly or manufacturing from the source or inventory.which means required supplies and parts are pulled based on demand,.

Sara Naeem
by Sara Naeem , Trainee Finance officer , Wah Brass Mill

Thanks for the invitation..

A Push System is based on foretasted demand that is completed and send to the next work station or in the case of final work station it goes to finished good inventory...in it all information moves from managers to market.

In Pull System the movement of work (sales) based on the demand of following work station.in this system information flows from market to managers.

georgei assi
by georgei assi , مدير حسابات , المجموعة السورية

Agreed with the answers to colleagues and the sum of these answers constitute a good material for the study

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

An inventory manager must be able to develop an effective inventory control system to manage customer demand. The demand for the product will control inventory costs, carrying costs, ordering costs and storage costs. Inventory control systems are generally categorized as push or pull models. Knowing the definitions, advantages and disadvantages of each system will help a company establish which inventory control method works best for their organization.

Push System

The push system of inventory control involves forecasting inventory needs to meet customer demand. Companies must predict which products customers will purchase along with determining what quantity of goods will be purchased. The company will in turn produce enough product to meet the forecast demand and sell, or push, the goods to the consumer. Disadvantages of the push inventory control system are that forecasts are often inaccurate as sales can be unpredictable and vary from one year to the next. Another problem with push inventory control systems is that if too much product is left in inventory. This increases the company's costs for storing these goods. An advantage to the push system is that the company is fairly assured it will have enough product on hand to complete customer orders, preventing the inability to meet customer demand for the product.

An example of a push system is Materials Requirements Planning, or MRP. MRP combines the calculations for financial, operations and logistics planning. It is a computer-based information system which controls scheduling and ordering. It's purpose is to make sure raw goods and materials needed for production are available when they are needed.

Pull System

The pull inventory control system begins with a customer's order. With this strategy, companies only make enough product to fulfill customer's orders. One advantage to the system is that there will be no excess of inventory that needs to be stored, thus reducing inventory levels and the cost of carrying and storing goods. However, one major disadvantage to the pull system is that it is highly possible to run into ordering dilemmas, such as a supplier not being able to get a shipment out on time. This leaves the company unable to fulfill the order and contributes to customer dissatisfaction.

An example of a pull inventory control system is the just-in-time, or JIT system. The goal is to keep inventory levels to a minimum by only having enough inventory, not more or less, to meet customer demand. The JIT system eliminates waste by reducing the amount of storage space needed for inventory and the costs of storing goods.

 

 

Deleted user
by Deleted user

Pull system is (just in time )  JIT system cause its take the customer order first and then produce . and we can consider process costing as a push system .

Abdallah Abu Zeyad CMA
by Abdallah Abu Zeyad CMA , Finance Account Manager , Toyota - Abdul Latif Jameel Motors - KSA

Push System Mean Production depends on Sales forecasting and this way may result in buildup inventory

Pull System its mean the department in production produce based on actual demand ( Just in Time method)

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

push system = production of merchandise then sell it  ( biscuits manufacture ) 

pull system = ordering  from customers first   first then production  ( planes production )

FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

AGREE WITH MRS SREEDEVI ANSWER 

Mohammed Ismael
by Mohammed Ismael , Finance Manager , confidintional

in simple way depend on the market demand pull or our active to make market demand on our product push

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