Exam 10: Coordination in a Supply Chain

The bullwhip effect causes

The bullwhip effect moves a supply chain away from the efficient frontier by increasing cost and decreasing responsiveness.

The bullwhip effect decreases

With an uncoordinated supply chain each stage tries to maximize its own profits, resulting in actions that often diminish total supply chain profits.

Actions taken in the course of placing and filling orders that lead to an increase in variability are referred to as

The lack of supply chain coordination on various measures of performance has costs associated with it. Which of the following is one of these costs?

If retailers sell products from competing manufacturers in a VMI system,

When a single stage controls replenishment decisions for the entire chain, the problem of multiple forecasts is magnified and coordination within the supply chain follows.

One appropriate measure to reduce replenishment lead times is to

When a firm places orders in lot sizes that are much larger than the lot sizes in which demand arises,

The lack of information sharing between the retailer and manufacturer

Successful collaborative planning, forecasting and replenishment must be built on a foundation of

The most common form of collaboration observed in practice is

Improperly structured sales force incentives are a significant obstacle to coordination in the supply chain.

A reduction of lot sizes increases the amount of fluctuation that can accumulate between any pair of stages of a supply chain, thus increasing the bullwhip effect.

Managers can encourage the bullwhip effect by devising pricing strategies that encourage retailers to order in smaller lots and reduce forward buying.

Operational improvements that reduce lot sizes can dampen the bullwhip effect by

The bullwhip effect

Sharing of POS data helps reduce the bullwhip effect because it allows each stage of the supply chain to use orders from the previous stage to forecast future demand.

Trade promotions and other short-term discounts offered by a manufacturer result in large orders during the promotion period followed by very small orders after that.