Please state which letter choice. The bullwhip effect can be measured by compari
ID: 352699 • Letter: P
Question
Please state which letter choice.
The bullwhip effect can be measured by comparing the variance of orders to the variance of demand at different stages in a supply chain. Which of the following phenomena is typical for measures of the bullwhip effect?
(A) They are larger downstream in the supply chain
(B) They are largest at opposite ends of the supply chain.
(C) They are smallest at opposite ends of the supply chain
(D) They are larger upstream in the supply chain.
(E) They are largest in the middle of the supply chain.
Explanation / Answer
Answer: Option (D) - They are larger upstream in the supply chain.
Explanation: Bullwhip effect refers to the phenomenon of increasing distortions in order fluctuations as one moves upstream in a supply chain. The swings are larger and larger towards the upstream in comparison to the downstream of the supply chain.