Asked by Nohely Ortiz on May 26, 2024
Verified
The bullwhip effect moves a supply chain away from the efficient frontier by increasing cost and decreasing responsiveness.
Efficient Frontier
In finance and operations, a concept that identifies the optimal portfolio of investments or resources that offers the highest expected return for a given level of risk.
Bullwhip Effect
A phenomenon in supply chains where small fluctuations in demand at the retail level cause progressively larger fluctuations in demand at the wholesaler, manufacturer, and raw material supplier levels.
- Comprehend the precursors and consequences of the bullwhip effect in the framework of a supply chain.
Verified Answer
TJ
Tatyana JonesMay 31, 2024
Final Answer :
True
Explanation :
The bullwhip effect is a phenomenon in supply chain management where fluctuations in customer demand increase as they move up the supply chain from retailers to manufacturers. This leads to higher inventory costs and lower responsiveness to customer demand, thereby moving the supply chain away from the efficient frontier. Therefore, the statement is true.
Learning Objectives
- Comprehend the precursors and consequences of the bullwhip effect in the framework of a supply chain.