Which of the following is TRUE about the bullwhip effect?
A)Variability in demand increases from the factory stage downstream to the customer stage
B)This cycle is prevalent in just about every industry
C)Lead times between the stages of the supply chain tend to be very short
D)Information lags stemming from large lot sizes with infrequent orders may be a cause

Question

Quizplus · Accepted Answer

The information lags caused by large lot sizes and infrequent orders are one of the main causes of the bullwhip effect. A lack of communication and delayed information between the different stages of the supply chain can lead to an increase in demand variability as we move downstream. Options A and C are incorrect as variability tends to increase as we move downstream, and lead times are typically longer rather than shorter. Option B is also incorrect as some industries may not experience the bullwhip effect.

Which of the Following Is TRUE About the Bullwhip Effect