Asked by Keandra Moffitt on Apr 24, 2024
Verified
If the variance of orders of a manufacturer equals 800, and the variance of orders of its supplier equals 750, what is happening at this part of the supply chain?
A) The bullwhip effect is present.
B) The supplier is providing a dampening (anti-bullwhip) effect.
C) The bullwhip measure for the supplier equals 1.067
D) Neither amplification nor smoothing is present.
E) Both amplification and smoothing are present.
Bullwhip Effect
A phenomenon where small fluctuations in demand at the retail level significantly amplify as they move back through the supply chain towards manufacturers.
Variance of Orders
The statistical measure that represents the variability or spread in the number of orders received over a certain period of time.
- Acquire knowledge on the theory and aftermath of the bullwhip effect in supply chain management.
- Measure and evaluate the bullwhip phenomenon to analyze instability in supply chain dynamics.
Verified Answer
RK
Rehaß KhaLed7 days ago
Final Answer :
B
Explanation :
A smaller variance in orders at the supplier level suggests that the supplier is providing a dampening effect on the bullwhip effect. This means that the supplier is able to maintain a more stable supply chain by reducing the variability in orders that are passed on to the manufacturer.
Learning Objectives
- Acquire knowledge on the theory and aftermath of the bullwhip effect in supply chain management.
- Measure and evaluate the bullwhip phenomenon to analyze instability in supply chain dynamics.