Question

Which of the following best describes how information sharing helps eliminate the bullwhip effect? a) Information sharing reduces information lead time, enabling each organization to plan according to end demand and not according to the orders placed immediately downstream. b) Information sharing reduces price fluctuations by ensuring that all members of the supply chain have access to price and cost information along the entire supply chain. c) Information sharing supports activity-based costing. d) None of these answers are correct.

Answer 1

Information sharing reduces information lead time, enabling each organization to plan according to end demand and not according to the orders placed immediately downstream.

Explanation:

The Bullwhip effect is a trend of the distribution channel where estimates result of inefficiencies in the supply chain. Of reaction to fluctuations the market demand the inventory swings are growing, as the supply chain continues to grow.

The effect of the bullfight generally flows up the supply chain, starting from the retailer, wholesaler, dealer, producer and then the supplier of the raw materials.

This method does not include daily fluctuations to run level. Another way of reducing the bullwhip effect is by eliminating the delays along the supply chain. In general, the fluctuations in the supply chain can be reduced by 80% by cutting order to supply time by half in both real supply chains and supply chain simulations