The following graphs were constructed for two supply chains A and B. Customer\'s
ID: 393323 • Letter: T
Question
The following graphs were constructed for two supply chains A and B. Customer's demand was almost flat. Answer the following based on the graphs provided a) Briefly explain the Bullwhip phenomenon in terms of the graphs provided for both supply chains b) Which supply chain has less of a Bullwhip effect? Explain your answer c) According to these graphs, which supply chain performed better in terms of the total cost of inventory and backlogs/stockouts? Briefly explain how you came up with your conclusion Supply Chain A Wholesaler Order Requests over 40 weeks Retailer Order Requests over 40 weeks 300 250 200 300 250 150 100 50 150 100 50 1 3 5 79 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 1 35 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 Factory Order Requests over 40 weeks Distributer Order Requests over 40 weeks 300 300 250 250 200 200 150 150 100 100 50 50 1 357 9 111315 17 1921 23 25 27 293133 35 37 39 41 4345 47 4951 1 3 5 7 9 1113 15 17 19 21 23252729 31 33 35 37 39414345 47 4951Explanation / Answer
Answer a: when the orders sent to the manufacturer, distributer or up in the supply chain create larger variance as compared to low of supply chain- Bullwhip occurs. In these supply chain A & B- in supply chain A bullwhip occurs between 14th week and 29th week orders. Answer b: Supply chain A has higher bullwhip effect, because bullwhip effect is measured by the ratio of the variance in order along the supply chain. In supply chain A- retailer highest orders are near to 10, whereas Factory received the highest order of 300 units (10:300). But in supply chain B order ration of retailer to factory was 11:45 Answer c: Supply chain A has performed better in terms of total cost of inventory and backlogs/stockouts. Because Chain A understood the bullwhip effect and started maintaining the regular orders as before, whereas in supply chain B, bullwhip was happening regularly hence creating high inventory levels and stockouts periodically.
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