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Small changes in consumer demand can result in large variations in orders placed because of the Bullwhip Effect. Thus the correct answer is D.
<h3>What is a consumer?</h3>
The consumer is referred as an end user of any product or service. He is the person who utilizes or takes the benefit of the products purchased. The person who buys a product is called a customer.
Demand estimations result in ineffective supply chains due to the bullwhip effect which is a characteristic of distribution channels. As one moves higher up the supply chain, it informs of increasing inventory variations in reaction to variations in consumer demand.
Therefore, option D Bullwhip effect is appropriate.
Learn more about the Bullwhip effect, here:
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The complete question is attached below-
Small changes in consumer demand can result in large variations in orders placed because of the:
A) Supply chain
B) Safety stock requirement
C) Lead time effect
D) Bullwhip effect
E) FCFS scheduling
Answer:
Stephenson Company
The amounts that are relevant for the selection of one contract over another are:
a) Contract revenue and labor costs
Explanation:
a) Data and Calculations:
Contract X Contract Z
Contract Revenue $ 200,000 $ 260,000
Materials 10,000 10,000
Labor 88,000 120,000
Depreciation on Equipment 8,000 10,000
Cost Incurred for Consulting Advice 1,500 1,500
Allocated Portion of Overhead 5,000 3,000
b) The costs of materials and cost incurred for consulting advice, though variable, are equal in each contract. They are not relevant in determining the contract to choose. Contract revenue and labor costs are variable and not equal. They are relevant in determining the contract to select. They make a difference in the decision. Depreciation and overhead costs represent sunk costs. They are not relevant in the decision.
