Which of the following is NOT a solution to the bullwhip effect in supply chains?

Prepare for the FBLA Supply Chain Management Test with flashcards and multiple choice questions. Each question includes hints and explanations. Ensure your success and confidence on the exam day!

Increasing inventory levels indiscriminately does not address the root causes of the bullwhip effect and can potentially exacerbate the issue. The bullwhip effect occurs when small fluctuations in demand at the consumer level cause larger and larger fluctuations in demand at the wholesale, distributor, and manufacturer levels. Solutions to mitigate this effect include improving inventory planning, evaluating order batching, and stabilizing price fluctuations.

Improving inventory planning allows for better alignment between supply and demand, reducing excess stock and shortages. Evaluating order batching helps in recognizing how large orders can lead to overreaction in inventory levels, promoting a more steady flow of orders. Stabilizing price fluctuations contributes to maintaining consistent purchasing patterns, preventing shock waves throughout the supply chain. Therefore, option C is not a viable solution, as indiscriminately increasing inventory does not address demand signals effectively and can create further complications within the supply chain.

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