The bullwhip effect is reduced by:

Question

BlackTom AI · Accepted Answer

The question asks about factors that reduce the bullwhip effect in supply chains.
Option 1: 'Order batching' typically increases bullwhip, because aggregating orders causes irregular, larger fluctuations upstream even if customer demand is steady. Delays and batch sizes create amplified variability for suppliers.
Option 2: 'Long lead times' generally worsen the bullwhip effect. When lead times are long, information becomes outdated more quickly and forecasts rely on more uncertain data, amplifying order variability upstream.
Option 3: 'Price promotions' can trigger forward buying and demand spikes, which propagate as larger, more erratic orders up the supply chain, increasing oscillations rather than dampening them.
Option 4: 'Better information sharing' helps align orders with actual demand, reduces distortions from forecasting, and stabilizes production and ordering—this is a classic mechanism to dampen the bullwhip effect by providing accurate, timely data to all stages of the chain.
In summary, the incorrect options describe practices that tend to amplify fluctuations, while the correct approach to reducing bullwhip is to improve information flow across the supply network.

The bullwhip effect is reduced by:

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