40 lines
1.5 KiB
Markdown
40 lines
1.5 KiB
Markdown
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<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-22 source=coordination-mechanisms -->
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# Demand Signal
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## Definition
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Information about consumer purchasing activity that propagates upstream
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through a supply chain to inform supplier replenishment and production
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decisions. A demand signal may be a point-of-sale data feed, a retailer's
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replenishment order, or a forecast. Signal quality — latency, accuracy,
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and granularity — determines how well upstream production can be
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synchronised with downstream consumption.
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## Source
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Coordination Mechanisms in Modern Supply Chains, §Demand Signals and
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Information Flow
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## Supply Chain Domain
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Coordination
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## VSM Assignment
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S2 — The demand signal is the primary coordination variable of the supply
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chain, analogous to the price signal in a market. It tells each upstream
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node what the downstream node requires, enabling synchronised response
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without central direction.
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## WoN Concept
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Effectual Demand — Smith's effectual demand — the demand of those willing
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and able to pay — is the signal that calls productive resources into action.
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The modern demand signal is effectual demand made explicit and machine-readable:
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instead of inferring demand from price movements, modern supply chains
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transmit demand data directly. Both serve the same coordination function
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(telling producers how much to produce), but where Smith's effectual demand
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works through price as a lagged, aggregated signal, the modern demand signal
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aims for real-time, granular transmission.
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