WMSL Basic DC Practice Test

The distinction between a push inventory system and a pull inventory system lies in how they manage inventory levels and respond to market conditions. In a push system, inventory is pushed through the supply chain based on predictions and forecasts of future demand. This means that products are manufactured or ordered in anticipation of customer needs, relying heavily on historical data and sales trends to estimate what will be required.

Conversely, a pull inventory system is grounded in actual demand. In this setup, inventory is replenished in response to sales and consumption, meaning that products are only ordered or produced when there is confirmed demand. This approach can lead to reduced excess inventory and lower holding costs since items are produced or ordered specifically as they are needed.

Thus, the correct answer highlights that a push system uses forecasts to determine inventory levels, while a pull system reacts to the actual consumption of goods.