### Understanding the Bullwhip Effect in Supply Chains#### Problem Statement3. **Consider the supply chain illustrated below:**- Manufacturer: Variance of orders = 1150 units- Wholesaler: Variance of orders = 1200 units- Retailer: Variance of orders = 600 units_Last year, the retailer's weekly variance of demand was 500 units._ The variance of orders was 600, 1200, and 1150 units for the retailer, wholesaler, and manufacturer, respectively. (Note that the variance of orders equals the variance of demand for that firm’s supplier.)**Tasks:**a) Calculate the bullwhip measure for the retailer. Is the bullwhip effect present here?b) Calculate the bullwhip measure for the wholesaler. Is the bullwhip effect present here?c) Calculate the bullwhip measure for the manufacturer. Is the bullwhip effect present here?d) Which firm appears to be contributing the most to the bullwhip effect in this supply chain? Why?#### Explanation of Graphs/Diagrams:- **Flowchart of the Supply Chain:** ``` 1150 1200 600 Manufacturer -> Wholesaler -> Retailer -> Retailer ``` This flowchart demonstrates the flow of goods from the manufacturer to wholesaler to the retailer, with respective order variances indicated.#### Key Concepts:**Bullwhip Effect:**The bullwhip effect is a phenomenon in supply chains where small variances in consumer demand cause progressively larger variances upstream in the supply chain. It can lead to inefficiencies and higher costs.**Calculating Bullwhip Measure:**The bullwhip measure can be calculated using the formula:\[ \text{Bullwhip Measure} = \frac{\text{Variance of orders}}{\text{Variance of demand}} \]**Calculations:**1. **Retailer:** \[ \text{Bullwhip Measure} = \frac{600}{500} = 1.2 \] The bullwhip effect is present if the measure is greater than 1.2. **Wholesaler:** \[ \text{Bullwhip Measure} = \frac{1200}{600} = 2 \] The bullwhip effect is indicated due to a measure greater than 1.3

Answered: Image /qna-images/answer/2504b154-7e42-448a-82f8-d0b0a9545dcb.jpg

Answered: 3. Consider the supply chain…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

Which are some of the things that drive variability in demand management and forecasting? 1. MOQs 2. Promotional sales on products 3. Supplier contracting 4. Order fulfillment 5. Network planning 6. None of the above Please give me answer ASAP with clear explanation.
Reactions and additional comments: Per the textbook definition, the term bullwhip effect “Describes the distortions in a supply chain caused by changes in customer demand, resulting in large swings in inventory levels as the orders ripple upstream from the retailer to the distributor and manufacturer” (Wallace, 2020, p. 137). The term is derived from physics. When cracking a whip, someone just has to snap their wrist and it causes a wave like effect that increases with a chain reaction. The bullwhip effect is a term that was first used in the 1990s. The makers of Pampers had many changes in order volumes, when usually diapers were bought at a constant rate (The Bullwhip effect : History and solutions, 2021). This caused the company to receive hard hits in demand with each new order from the retailers. For example, during the Covid-19 pandemic, everyone was told to stay home, go to school from home, and work from home. This caused the need for many more computers and electronic…
The supply chain includes not only distribution channels but also the suppliers who deliver raw materials and other inputs to producers. () a) True () b) False
[8] United States. Your harvest has just come in and you picked 795,000 pounds of apples. You need to distribute the harvest to the appropriate warchouse locations. You manage an apple orchard that distributes fruit throughout the southeast part of the [A] Using the following warchouse information, allocate the apples to their appropriate locations. DEMAND STANDARD DESIRED WARE CURRENT STOCK DEVIATION OF DEMAND HOUSE INVENTORY FORECAST AVAIL- ABILITY Atlanta 35,000 lbs 190,000 lbs 20,000 lbs 95% Miami 10,000 Ibs 170,000 lbs 18,000 lbs 95% Columbia 45,000 lbs 155,000 Ibs 10,000 lbs 85% Memphis 5,000 lbs 145,000 Ibs 25,000 lbs 80% [B] Discuss two additional methods to push inventory into a network.
Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 1,100 valves; order cost is $10 per order; and annual inventory holding costs are $7.55 per unit. D D Vendor A Quantity 1-14 15-24 25-99 100-199 200-399 400+ Price $35.00 34.75 33.55 32.35 31.15 30.75 Vendor C Vendor D Vendor A D Vendor B Vendor B Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? Chris Sandvig Irrigation should order units at a time from (enter your response as a whole number). Quantity 1-24 25-99 100-199 200-399 400+ Price $34.75 34.00 32.80 31.60 30.50 MacBook Air O Vendor C Quantity 1-49 50-149 150-299 300+ Price $34.50 33.75 32.50 31.10 Vendor D Quantity 1-149 150-299 300+ Price $34.25 33.00 31.00 Next
1. A local producer of vegetables is deciding how much inventory to have to meet the next week's demand. Vegetable products are perishable with a shelf-life of a week. Based on the historical observations, the company expects the weekly demand to follow a normal distribution with mean 4500 pounds and standard deviation of 400 pounds. The price of the product is $14 per pound in the store, and it costs $6 to produce. If there are any leftovers, the company is required to dispose them safely to avoid any pollution. This process costs $0.5 per pound. Answer the following questions. a) What is the cost of overage per pound? b) What is the cost of underage per pound? c) What is the optimal order quantity?
Consider that a company produces a certain component in batches of 795 units (Q) for its computer products. The annual demand for this component is 2,049 units. The annual inventory rate is 13%. The machine used to produce this part has a production rate of 13,655 units/year and a cost of $15/unit. b) How long (years) does it take to produce the batch considering the Q provided? Report your answer to 3 decimal places
What type of warehouse storage system (e.g., static, mobile, mezzanine flooring, wire partitions) you will use for the following product categories- i) Wooden Furniture ii) Chemical container.Describe why?
please help to answer below question
What is the distinction between simulated and anticipated average demand:
As manager of the St. Cloud Theatre Company, you have decided that concession sales will support themselves. The following table provides the information you have been able to put together thus far. Item % of Revenue Selling Price $1.20 $2.00 $1.00 $1.00 Variable Cost Soft Drink $0.60 24 25 $0.90 $0.30 Wine Coffee 31 Candy $0.35 20 Last year's manager, Scott Ellis, has advised you to be sure to add 10% of variable cost as a waste allowance for all categories. You ostimate labor cost to be $260.00 (5 booths with 2 people each) Even if nothing is sold, your labor cost will be $280.00, so you decide to consider this a fixed cost Booth rental, which is a contractual cost at $80.00 for each booth per night, is also a fixed cost. a) Based on the information available, the per night break-oven point in dollars for the St. Cloud Theatre Company = $(round your response to two decimal places).

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS