The basic approaches to handling predictable variability in demand

predictable variability refers to the changes in demand that can be forecasted, e.g. seasonal variation in demand. If not dealt with properly, it can cause increased costs and decreased responsiveness in the supply chain.

A firm can handle predictable variability using two broad approaches:
-Manage supply using capacity, inventory, subcontracting, and backlogs.
-Manage demand using short-term price discounts and trade promotions

Managing supply is done through the management of capacity and inventory
-Managing capacity
----time flexibility from workforce
----use of seasonal workforce
----use of subcontracting
----use of dual facilities - dedicated and flexible
----designing product flexibility into production processes