Random fluctuations usually are caused by factors beyond management control. However analysis will sometimes reveal that a predictable demand cycle for one segment is concealed within a broader, seemingly random pattern. This fact illustrates the importance of breaking down demands on a “segment-by-segment” basis.
For instance, a repair and maintenance shop that services industrial electrical equipment may already know a certain proportion of its work consists of regularly scheduled contracts to perform preventive maintenance. The balance may come from “walk-in” business and emergency repairs.
* Demand patterns allows the firm to schedule less preventive maintenance work on days with high anticipated demands of typically more profitable emergency repairs.
Understanding patterns of demand
To understand the patterns of demand by segment, research should began by getting some answers to a series of important questions about the patterns of demand and their underlying causes.
1. Do demand levels follow a predictable cycle? if so, is the duration of the demand cycle - One day (varies by hour) - One week (varies by day) - One month (varies by day or week)-One year (varies by month or by season or reflects annual public holidays) 2. What are the underlying cause of these cyclical variations? - Employment schedules -Billing and tax payment/refund cycles -Wage and salary payment dates -School hours and vacation -Seasonal changes in climate - Occurrence of public or religious holidays - Natural cycles, such as costal tides 3. Do demand levels seem to change randomly? if so, could the underlying causes be - Day-to-day changes in the weather - Health events whose occurrence cannot be pointed exactly - Accidents, fires, and certain criminal activities - Natural disasters (e.g earthquakes, storms, mudslides, and volcanic eruption
4. Can demand for a particular service