In a pull system, production is determined by what factor?

In a pull system, production is driven primarily by customer demand signals. This approach emphasizes the need to respond directly to actual consumption rather than basing production on forecasts or schedules. In essence, products are created only when there is a confirmed demand from the customer, which helps in reducing waste and excess inventory.

By focusing on real-time demand, a pull system allows for greater flexibility and efficiency in operations, as it ensures that resources are utilized effectively to meet customer needs. This method helps companies produce goods that are necessary to fulfill immediate orders, minimizing the risks associated with overproduction and stockpiling of unsold inventory.

In contrast to a pull system, approaches that rely on sales forecasts, predefined schedules, or production capacity often lead to misalignment between what is produced and what is actually needed in the marketplace, which can result in inefficiencies. Overall, the key aspect of a pull system is its reliance on feedback from customer demand, making it an effective strategy for managing operations in a way that is responsive and efficient.