Which scenario best demonstrates a pull inventory system?

• A. Producing products to stock in anticipation of demand.
• B. Ordering raw materials only after customer order is received.
• C. Inventory is replenished based on actual demand signals.
• D. Carrying high levels of finished goods to hedge against supply disruption.

Answer: (C)

In a pull inventory system, replenishment happens only in response to actual demand. This means you don’t stock up in advance; you wait until there is a signal from sales or the next step in the process that more inventory is needed, and then you replenish just enough to meet that need.

The scenario described aligns with this idea because inventory is replenished based on real demand signals. It reflects the responsive nature of a pull system, where production and ordering are driven by actual consumption rather than forecasted demand. This approach helps minimize excess stock and waste, since nothing is tied up in inventory until there’s a concrete demand.

The other scenarios illustrate push or buffering strategies instead: producing to stock in anticipation and carrying high levels of finished goods are classic push behaviors, while ordering raw materials only after a customer order is received focuses on sourcing tied to demand but doesn’t as clearly capture the broad replenishment principle across the entire inventory system.