WHAT IS SOP FPR SUPPLY

SOP for supply chain management is a document that portrays the applicant as career- driven
with some prior knowledge about how the business world works. It also briefs about the
applicant's academics and professional details as well.

What Is Supply?

Supply in economics is the quantity of a particular product or service that suppliers offer to
consumers at a specified price at a certain period of time.or

supply is a fundamental economic concept that describes the total amount of a specific good or
service that is available to consumers. This relates closely to the demand for a good or service
at a specific price.

Types of Supply

Short-Term Supply
Short-term supply is the inventory immediately available for consumption. When short-term
supply has been exhausted, consumers must wait for additional manufacturing or production
for more goods to become available. Short-term supply is the maximum amount consumers
can immediately purchase.

Long-Term Supply
Long-term supply considers consumer demand, material availability, capital investment, and
macroeconomic conditions. These factors all dictate how a company should shift
manufacturing to meet long-term demand. Though long-term supply may only be able to grow
gradually over time, suppliers have greater control over increasing or decreasing long-term
supply by enacting operational strategies.

Joint Supply
Joint supply occurs when the manufacturing of one good will result in the byproduct of another
good. Regardless of the demand for the byproduct good, it may be manufactured and supplied
simply in response for demand of the other product. For example, the production of crude
petroleum results in gasoline, fuel oil, kerosene, and asphalt. The supply of one item may
increase simply due to greater demand of other items.

Market Supply
Market supply refers to the daily supply of goods often with a very short-term usable life. For
example, grocery stores may measure their market supply of fresh produce or fish. Each of
these goods is exclusively dependent on the supplier's ability to harvest these products, as
additional supply may be out of the control of the farmer.

Composite Supply
Opposite of joint supply, composite supply is the offering of a product that is multiple products
packaged together. Both products must be offered together, and the maximum supply is equal
to the smaller of the two products. For example, a company manufacturers pints of ice cream
that are sold along with compostable spoons. Neither product is sold individually. In this
example, the amount of composite supply is the lower of the quantity of pints of ice cream or
composable spoons.
Factors That Affect Supply

As a consumer considers whether or not to increase production, there are a number of items it
must keep in mind. Alternatively, there are considerations from the buyer and external,
independent parties that also dictate levels of supply. Factors that affect supply include:

 Consumer Demand. As more customers demand a good, companies will focus on

increasing the supply of that good. Though this may increase inventory, this may also
be an indicator that high demand will cause inventory shortages until long-term
production can meet short-term market demand.
 Material Costs and Availability. Manufacturers are often limited by the products used
in the manufacturing process. Whether it is shortages of specific goods or delays in the
delivery process, a company can only make a product if it has the consumable goods to
convert into a final product.
 Technological Innovation. Companies that have invested more heavily in technology
and innovation will likely have greater capabilities. Whether it is shorter machine
downtime, more efficient use of materials, or shorter manufacturing time, the equipment
and machinery used directly relate to how many goods a company can expect to
manufacture and supply to the market in a given period of time.
 Government Policy. Some policies may limit production or impose disincentives that
make a company not want to supply markets with specific goods. Alternatively,
companies may receive tax incentives or subsidies to ramp up production. In either
case, the government directly influences the quantity of product released to the market.
 Natural Factors. Should inclement weather damage crops, the agriculture sector may
have no choice but to undersupply the market. On the other hand, favorable weather
may result in the strongest yields.
 Economic Conditions. As macroeconomic conditions worsen, companies may choose
to slow production, decrease long-term investments, or wait to react to consumer
demand and make products accordingly. Alternatively, should credit be easily
accessible for cheap, companies may be more likely to build inventory, incur additional
expenses, and risk manufacturing additional goods to experiment in new markets.

Supply is the number of goods provided to a customer.The idea of supply pairs with the idea of
demand, and these two concepts intertwine to create a market equilibrium that often defines
the prices consumers pay and the supply level manufacturers strive for.

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