SOLVED

Section 3Â Â Managing the Bullwhip Effect 1) The bullwhip effect describes the tendency for larger order size fluctuations in the supply chain as orders move from suppliers toward retailers. 2) The bullwhip effect can occur when orders decrease as well as when they increase. 3) The overarching solution to the bullwhip effect is simply for supply chain members to share information and work together. 4) A bullwhip measure value greater than zero indicates that the bullwhip effect exists. 5) Which of the following is NOT a potential cause of the bullwhip effect? A) shortage gaming B) channel coordination C) order batching D) demand forecast errors E) price fluctuations 6) Which of the following is NOT a remedy for the bullwhip effect? A) share demand information B) channel coordination C) order batching D) price stabilization E) allocate orders based on past demand 7) Which of the following is the prescribed remedy when the bullwhip effect is caused by shortage gaming? A) share demand information B) channel coordination C) increase capacity D) price stabilization E) allocate orders based on past demand 8) What is the formula for the bullwhip measure? A) variance of orders / variance of demand B) variance of orders – variance of demand C) variance of demand / variance of orders D) variance of orders2 / variance of demand2 E) variance of demand – variance of orders 9) What value of the bullwhip measure would indicate that the bullwhip effect exists? A) greater than 1 B) greater than 0 C) less than 0 D) less than 1 E) 1 10) What value of the bullwhip measure would indicate that a dampening scenario exists? A) greater than 1 B) greater than 0 C) less than 0 D) less than 1 E) 0 11) What is the value of the bullwhip measure for a company with a standard deviation of demand equal to 20, and a variance of orders equal to 450? A) 0.889 B) 22.5 C) 1.125 D) 0.044 E) 50 12) 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? A) The bullwhip effect is present. B) The supplier is providing a dampening (anti-bullwhip) effect. C) The bullwhip measure for the supplier equals 1.067 D) Neither amplification nor smoothing is present. E) Both amplification and smoothing are present. 13) Suppose that in month 1, both the retailer and the wholesaler in a supply chain ordered 20,000 units. Then in month 2, the retailer decreases its order size by 1000 units. If the wholesaler then decreases its order size in month 2 by 700 units, which of the following is TRUE? A) The wholesaler is contributing to the bullwhip effect. B) The wholesaler is providing a dampening (anti-bullwhip) effect. C) The bullwhip measure for the wholesaler equals 0.70. D) Neither amplification nor smoothing is present. E) The wholesaler is providing both amplification and smoothing. 14) The U.S. ________ program, designed to stimulate the economy and improve fuel efficiency, produced an unintended bullwhip effect in the automobile industry.