Which of the following is not a remedy for the bullwhip effect?

Which of the following is NOT a remedy for the bullwhip​ effect? price stabilization B. share demand information C. allocate orders based on past demand D. order batching E. channel coordination

Answer

C. allocate orders based on past demand

Explanation:-

The bullwhip effect occurs when small decisions at the end of the supply chain increase the impact on the supply chain as they continue to operate. There is a particular danger of this problem when demand in the supply chain increases. Retailers can order an additional 5 percent of the stock, forcing the manufacturers who supply it to order an additional 10 percent of the raw material to make the product, assuming the market for the product is growing. Then the raw material producers order 20% more than the raw materials for the production of raw materials and so on. At some point, when demand slows and traders order less stock, downstream producers are stuck with an increase in excess stock that needs to be processed. A slightly increased effect can be healthy because it forms a pillow in case the situation jumps to extreme. However, it can often get out of hand and put companies at risk in the supply chain, especially at the extreme whiplash end.

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