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.) 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 bullwhin effect present here?
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.) 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 bullwhin effect present here?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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.)
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?
Retailers Weekly Varience of Demand
500 Units
Varience of Orders for:
Retailer
600 Units
Wholesaler
1200 Units
Manufacturer
1150 Units
Bullwhip Measure of the Retailer
1.2 Bullwhip effect is prresent
2
Bullwhip Measure of the Wholesaler
Bullwhip Measure of the Manufacturer
0.96
The wholesaler is the firm that is
contributing more to the bullwhip effect
because the Bullwhip value is the
highest.
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