What does variance from plan identify in a supply chain context?

In a supply chain context, variance from plan primarily refers to the difference between what was intended or planned and what was actually achieved in terms of production values. This measure is crucial for evaluating the performance of a supply chain function, as it highlights discrepancies that may affect overall operational efficiency. By analyzing variance from plan, companies can identify where production processes are underperforming or overperforming, allowing them to make necessary adjustments to align actual output with production targets.

This concept is fundamental for effective supply chain management, as it provides insights into the efficiency of operations, resource utilization, and the accuracy of demand forecasting. Recognizing these variances helps organizations to better manage their production schedules, optimize inventory levels, and reduce costs, leading to enhanced responsiveness and competitiveness in the market.

While the other choices address different aspects of supply chain dynamics—such as inventory levels, cost allocations, and demand forecasting—none of them specifically encapsulate the core purpose of identifying production discrepancies, which is the essence of variance from plan.