Last year the retailer's weekly variance of demand was 190 units. The variance of orders was 480, 590, 770, and 1 comma 320 units, for the retailer, wholesaler, distributor, and manufacturer, respectively. (Note that the variance of orders equals the variance of demand for that firm's supplier.) The bullwhip measure for the retailer is?
Bullwhip effect refers to the phenomenon in which the fluctuations in orders increase as orders move through the supply chain. Bullwhip effect is a major issue in supply chain management. The extent of bullwhip effect can be measure by the ratio of the variance of orders to the variance of demand.
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fromChapter 11 / Lesson 4
Failure to manage a supply chain effectively can lead to inefficiencies. In this lesson, you'll learn about the bullwhip effect, including what it is, its causes and effects, and what to do to stop it. A quiz follows.