to determine price of goods there must be match between supply and demand to maintain

equilibrium in market. If demand increases then price decreases, ultimately available supply
decreases so manufacturer increase prices to maintain their supply.if supply is more than demand
then product remain unsold or retain to manufacturer and they bear loss in terms of manufacturing
cost. If demand increases, supply decreases than customer will bear loss in terms of unavailability of
products, also manufacturer loss revenue in both conditions overall economic growth impact overall
GDP rate will decline.

Managers should take some measure to maintain equilibrium position.

1. Forecast demand: industry analyst must forecast future demand of goods to fix price and
also for stock availability.
2. Sales and operating plans: sales managers must forecast sales of every region and make a
back up plan to maintain target level.
3. Supply planning: there must be operational effectiveness in whole system in order to
maintain supply and reduce cost level.