Question

Consider a three-firm supply chain consisting of a retailer, manufacturer, and supplier. The retailer's demand over an 8-aweek period was 105 units each of the first 2 weeks, 220 units each of the secand 2 weeks, 280 units each of the third 2 weeks, and 420 units each of the fourth 2 weeks. The following table presents the orders placed by each firm in the supply chain Notice, as is often the case in supply chains due to economies of scale, that total units are the same in each case, but firms further up the supply chain (away from the retailer) piace larger, less frequent, orders. EEB Click the icon to view the orders placed by oach firm in the supply chain. Click the icon to view the ways of caiculating the variance. a) What is the bullwhip measure for the retailer? More Info -x The bulwhip measure tor the retaler is 1 (Enter your response rounded to two decimal ptaces) Week Retailer ManufacturerSupplier b) Whal is the bullwhip measure for the manufacturer? 210 550 105 105 220 220 280 280 420 The bullwhip measure for the marvulacturer is . (Enter your response rounded to two decirmal places.) 410 1,400 840 Print Done Enter your answer in the answer box and then click Check Answer

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c) What is the bullwhip measure for the supplier? (Enter your response rounded to two decimal places)

d) What conclusions can you draw regarding the impact that economies of scale may have on the bullwhip effect? (select all the correct statements below)

>A. Larger less frequent orders imply a smaller variance of orders.

>B. The effect of increasing variance of orders with the less frequent orders could be reduced via channel coordination by determining lot sizes.

>C.   Larger less frequent orders imply a larger variance of orders.

>D. The effect of decreasing variance of orders with the less frequent orders could be reduced via channel coordination by determining lot sizes.

Answer 1

a)

Variance of orders = VAR(105,105,220,220,280,280,420,420) = 14,734

Retailer placed orders as per demand. So demand is equal to order. Therefore, Variance of orders = Variance of demand

Bullwhip measure for the retailer = Variance of orders / Variance of demand = 14734/14734 = 1.00

b)

Variance of orders =VAR(210,0,440,0,560,0,840,0) = 104,513

Bullwhip measure for the manufacturer = Variance of orders / Variance of demand = 104513/14734 = 7.09

c)

Variance of orders =VAR(650,0,0,0,1400,0,0,0) = 265,313

Bullwhip measure for the supplier = Variance of orders / Variance of demand = 265,313/104513 =2.54

d) Following two conclusions can be drawn regarding the impact that economies of scale may have on the bullwhip effect

B. The effect of increasing variance of orders with the less frequent orders could be reduced via channel coordination by determining lot sizes.

C.   Larger less frequent orders imply a larger variance of orders.