Exam CSCP topic 1 question 444 discussion

Decoupling is a function of inventory that will assist the manufacturer in achieving economies of scale by enabling it to produce large quantities without being overly constrained by the downstream demand. Decoupling inventory acts as a buffer between different stages of production or supply chain, allowing for the independent operation of each stage. This enables a manufacturer to produce large quantities of goods without being overly concerned about downstream demand, as the decoupling inventory can absorb any imbalances between production and demand.

Balancing supply and demand involves maintaining an optimal level of inventory to meet customer needs while minimizing holding costs.