Which system produces goods based on actual demand signals?

A pull system is designed to produce goods based on actual demand signals, meaning that production is initiated only when there is a direct request from the customer or downstream processes. This approach aligns closely with the principles of just-in-time (JIT) production, which aims to minimize waste by reducing excess inventory and only manufacturing what is needed when it is needed.

In a pull system, goods are "pulled" through the production process as customer demand increases, allowing for a more responsive and flexible manufacturing environment. This not only helps in reducing the costs associated with holding inventory but also enhances customer satisfaction, as products can be tailored more closely to actual preferences and needs.

In contrast, push systems operate on forecasts and predetermined schedules, producing goods based on expected demand rather than actual customer needs. Lean systems focus on efficiency and waste reduction but can encompass both push and pull methodologies. Kanban, while also related to pull systems, specifically refers to a visual signaling system that facilitates pull production but does not itself define the production system as a whole. The concept of a pull system encapsulates the very essence of responding to real-time demand, distinguishing it as the correct choice.