IS. A manufacturer, distributor, wholesaler, and retailer all agree to base thei

Question

IS. A manufacturer, distributor, wholesaler, and retailer all agree to base their orders on actual consumer orders instead of performing detailed forecasts based on each party's Tier 1 customer's actual orders. Which of the following will result, and what are the likely risks of this method? A. The push/pull line moves back to the manufacturer but at the risk of greater overtime or B. The push/pull line moves back to the manufacturer but at the risk of inventory C. The push/pull line moves toward the retailer but at the risk of inventory obsolescence or D. The push/ pull lne moves toward the retailer but at the risk of excessive safety stock. rush orders. obsolescence or the bullwhip effect. the bullwhip effect ??

Explanation / Answer

Manufacturer, distributor, wholesaler and retailer all agree to base their orders on actual consumer orders instead of performing detailed forecasts based on each party tier 1 customers actual orders. Which of the following will result, and what they likely risks of this method.

B.- The Push/Pull line moves back to the manufacturer but at the risk of inventory obsolescence or the bullwhip effect.

Explanation- in this specific incident, all the defect would be taken by the manufacturer as the order is totally based on actual customers orders which would be fire in Tier 1 customer actual orders.

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