Which of the following is not one of the major causes of the bullwhip effect?

Which of the following is NOT a cause of the bullwhip effect?

Order batching
Inflated orders placed by the retailers
Long lead time
Share demand and inventory data across the supply chain
Minimum order quantities


The correct answer is " Share demand and inventory data across the supply chain ".

Bullwhip effect is the occurrence of variance of the orders sent to the manufacturer and supplier to that sent to the customers. This large variance is identified in supply chain.

There are many factors that contribute to this effect. They are:-

  • Supply chain not organized properly
  • Lack of communication
  • Customer returning the products often due to free return policy.
  • Discounts and promotions may increase the demand for short period of time.
  • Relying more on past demand information.

These are the following measures to overcome bullwhip effect.

  • Focusing more on customer and designing the network accordingly.
  • Based on the demand the inventory should be optimized.
  • Focusing on sharing information and extracting information from partners.
  • Product complexity should be managed appropriately.
  • Maintaining the price of product stable.

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