Question

Answer the following questions around Bull whipping;

A) Price fluctuations help to mitigate the effects of the Bullwhip Effect. True or false

B)The Bullwhip Effect is a supply chain concept that relates to: A)The importance of putting pressure on suppliers to provide better quality inputs. B)The increasing variability in demand orders from downstream customers to upstream suppliers C)The decreasing uncertainty in supply chain ordering based on the adaptation of order whipping D) All of the above

Answer 1

(A) Answer: FALSE

Rationale: Supply chain errors that contribute to the bullwhip effect include lack of communication and coordination, price fluctuations, batch ordering, overreaction to backlogs, inflated orders, errors in forecasting, and product promotions.

(B) Answer: B (The increasing variability in demand orders from downstream customers to upstream suppliers)

Rationale: The bullwhip effect is a distribution channel phenomenon which causes supply chain inefficiencies because of variability in forecasted demand. It refers to increasing variability of customer demand as one moves further up the supply chain.