Question

Topic 3

Book: Operations and Supply Chain Management Jacobs & Chase 14e

5. a. List the three of the six Components of Demand and give an example of each.

b. List the four most common types of trends and explain each.

Answer 1

5. a) Out of all 6 components of demand, the 3 components I would like to explain here are trend, seasonal component and average demand.

Trend means occurence of demand is either increasing or decreasing over the period of time as various factors like advertising, speaking, change in population etc. For example, the demand of clothes increased because there is an increase in population of the country.

2. Seasonal component talks about the seasonal factors and the cyclic months of the year than influences the demand. For example, demand of ice cream increasing in summer season.

3. Average demand is basically the normal or average demand which is being recorded and taking place for any product. For example, in normal circumstances, the average demand of phones.

b) For what I believe there exists 3 main types of trends that exist in the market for any platform or economy which are:

1. Upward trend: This is the trend change in which the price of any good or services increases sharply because of any market factor like increasing the dollar rate or economy. For example, the trend of increase in the share price from $2 per share to $2.5 per share is upward trend.

2. Downward trend: This is the trend change in which the price of any good or services decreases sharply because of any market factor like decreasing the dollar rate or economy. For example, the trend of decreases in the share price from $2 per share to $1.5 per share is downward trend.

3. Sideways: This is the trend change in which the no change could be seen in the price of any good or services. There is neither increase nor decrease just sideways increasing showing the constant price rate of the asset. For example, the share price remains $2 even after a month because no new change came in the market influence.