What is a Pull System?

A Pull System is primarily characterized by its focus on actual customer demand rather than predictions or forecasts. In this approach, production is driven by the real-time consumption of products rather than relying on estimates. This means that inventory levels are closely monitored, and items are produced only when there is a confirmed need, which helps to minimize waste and excess inventory.

Using this method allows organizations to be more agile and responsive to market changes, ensuring that they produce only what is necessary, thus optimizing resource use and enhancing efficiency. The pull system contrasts with push systems, where production is based on forecasts, potentially leading to overproduction or stockouts.

In this context, the other options describe different concepts unrelated to the fundamental structure of a pull system. Option A focuses on forecasted demand, which is a characteristic of push systems. Options C and D pertain to purchasing techniques and cost calculations, instead of production methodologies based on consumer demand.