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Even Steven

A balance between supply and demand is essential to your company's well-being.

This story appears in the August 2008 issue of Entrepreneur. Subscribe »

As a Marine Corps pilot in Vietnam, I was acutely aware of the balance between supply and demand. Stationed on an aircraft carrier, we had to order supplies from warehouses on land. It was frustrating to regularly receive aircraft parts for the wrong model of aircraft. My commanding officer wasn't interested in my problems with the supply chain; all he wanted was for my gunships to be ready when he needed them. Because the Army had a large supply of parts in its aircraft graveyard, we often kept our fleet flying by borrowing parts from the Army. Although this didn't follow Marine Corps directives, we kept our aircraft in the air with or without parts from our own supply chain.

One very important job of an entrepreneur is to coordinate the forces of supply and demand in his or her business. If there's too much supply, or inventory, the business suffers. If there's too much demand and not enough supply, the business also suffers because the customers aren't being supplied with what they want and may go to a competitor. If there's no demand or supply, the business will soon be out of business.

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