Question

Small changes in consumer demand can result in large variations in orders placed because of the:...

Small changes in consumer demand can result in large variations in orders placed because of the:

supply chain

safety stock requirements

lead time effect

bullwhip effect

FCFS scheduling
Business   Operations-Management   
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Answer #1

The bullwhip effect is a supply chain phenomenon describing how small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels. Inaccurate demand forecasting is the most common cause for the bullwhip effect. The result: excess inventory investment, poor customer service and lost revenue.

The example will for a case of major desktop printer manufacturer. It found that retailers were estimating sales and including safety stock in their projections. When distributors upstream padded their own forecasts, that amplified distortion even more. The manufacturer and its suppliers responded with changes in production which accounted for all the padding done so far down the chain.

Therefore , correct answer would be “ Bullwhip effect”

ANSWER : BULLWHIP EFFECT
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