Supply curves help firms make production decisions by detailing a customer's willingness to pay (price) for a specific level of output. A better understanding of the customer's willingness to pay allows the firm to maximize (should it choose to do so) the profitability of that specific relationship. In addition, the firm can combine the supply curves of individual customers to create a segment or industry-specific aggregate supply curve.
A supply schedule is simply the relationship of price and quantity supplied detailed in a tabular format. It's helpful for readability, but in essence it provides the same information as the supply curve.
Below are a couple examples of how understanding customer-specific supply curves helps businesses:
1. It can reduce waste. When a firm is producing optimally, there is a reduction of waste throughout the supply chain, such as reduced holding costs and reduced obsolescence.
2. It can maximize profitability. When a firm understands a customer's willingness to pay, it can price at a point that extracts the most value from that specific business relationship.