False. A reduction in lot sizes does not enhance the amount of variation that can build up between any two supply chain stages, hence enhancing the bullwhip effect.
According to the bullwhip effect, which is a characteristic of the suppliers chain, modest changes in demand at the retail level can lead to steadily increasing changes at the wholesale, distributor, manufacturer, and raw material supplier levels. The physics of cracking a whip are referenced in the effect's name. The comparatively tiny movement of the whip's wave patterns increasing in size as a result of the person holding it snapping their wrist. In supply chain management, salespeople, manufacturers, suppliers, and customers all have a partial understanding of demand and limited direct control over it.
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