If the variance of orders of a manufacturer equals 800,and the variance of orders of its supplier equals 750,what is happening at this part of the supply chain?

Question

Quizplus · Accepted Answer

A lower variance in orders from the supplier compared to the manufacturer suggests that the supplier is providing a dampening (anti-bullwhip) effect. This means that the supplier is able to smooth out fluctuations in demand and prevent the bullwhip effect from occurring further upstream in the supply chain.

If the Variance of Orders of a Manufacturer Equals 800,and