The bullwhip effect moves a supply chain
A)away from the efficient frontier by increasing cost and decreasing responsiveness.
B)away from the efficient frontier by decreasing cost and increasing responsiveness.
C)toward the efficient frontier by increasing cost and decreasing responsiveness.
D)toward the efficient frontier by increasing cost and increasing responsiveness.

Question

Quizplus · Accepted Answer

The bullwhip effect in a supply chain refers to the tendency of fluctuations in demand to increase as one moves up the supply chain from the end consumer to the manufacturer. As a result, suppliers further up the chain have to deal with greater variability in demand, leading to inefficiencies such as stockouts, excess inventory, and overproduction. These in turn increase costs and decrease responsiveness, moving the supply chain away from the efficient frontier. Therefore, A is the correct choice.

The Bullwhip Effect Moves a Supply Chain