Demand and supply planners are supporting decision-making efforts that have financial ramifications for the company. The company has many stakeholders who have a financial interest in the company with whom the management must communicate and interact. So, finance is an important skill and language for those who are leaders in the demand planning and supply planning efforts. The ability to measure and address the consequences of their efforts in monetary and financial terms is essential to better decisions. What are the key financial concepts and metrics with which the demand planners and supply planners should be most concerned? How can we enhance communication and performance by using them? These are the primary topics and concerns of this article.

From Issue: Supply Chain Disruptions: Causes, Impacts, and Mitigation Strategies
(Fall 2015)

Financial Metrics for Demand and Supply Planners