Two additional variables are related to push vs pull: demand information visibility
and cost of good sold. Demand information visibility is the extent that actual demand
information penetrates a supply chain towards the initial supplier. This concept is also
known as demand decoupling point (Christopher, 2000) or order penetration point
(Sharman, 1984). The key idea is that companies rely on planning inventories in the
absence of actual demand information. Recall that the cost of good sold represents the
amount of working capital required to produce an additional unit. A higher cost of
good sold may lead to pull decision because the expensive inventory is an incentive to
react to demand rather than to plan and inventory products (Pires, 1999).