In a supply chain with the sequence of factory, distributor, wholesaler, retailer, which entity is most likely to experience the greatest variability in demand resulting from the bullwhip effect?
In a supply chain with the sequence of factory, distributor, wholesaler, retailer, which entity is most likely to experience the greatest variability in demand resulting from the bullwhip effect?
The entity most likely to experience the greatest variability in demand resulting from the bullwhip effect is the factory. The bullwhip effect describes how small fluctuations in demand at the consumer level can cause progressively larger fluctuations in demand at each upstream stage of the supply chain. Thus, the further up the supply chain you go (towards the factory), the greater the variability in demand experienced.
Correct answer is A. Classic definition of the bull whip effect
Correct answer should be A , at least based on APICS CSCP, part 1, page 34 manual.
Factory