Supply Uncertainty Definition
Supply uncertainty refers to the degree of variability in the supply of a good or service. It is measured as the standard deviation of the historical supply data.
Supply uncertainty can have a significant impact on businesses, as it can lead to disruptions in the production process and fluctuations in prices. This can be a particular problem for businesses that are reliant on just-in-time delivery, as any delays can cause major disruptions.
There are a number of ways to reduce supply uncertainty, such as diversifying suppliers, holding inventory, and entering into long-term contracts.
