Managers can encourage the bullwhip effect by devising pricing strategies that encourage retailers to order in smaller lots and reduce forward buying.

Question

Quizplus · Accepted Answer

Managers should aim to reduce the bullwhip effect by implementing pricing strategies that encourage retailers to order in larger quantities and reduce the frequency of orders. This will lead to more stable demand and reduce fluctuations in orders up the supply chain. Encouraging smaller lots and forward buying can exacerbate the bullwhip effect.

Managers Can Encourage the Bullwhip Effect by Devising Pricing Strategies