KSuppose that in month 1, both the retailer and the wholesaler in a supply chain ordered 20,000 units. Then in month 2, the retailer decreases its ordersize by 500 units. If the wholesaler then decreases its order size in month 2 by 700 units, which of the following is TRUE?OA. The wholesaler is contributing to the bullwhip effect.OB. Neither amplification nor smoothing is present.OC. The bullwhip measure for the wholesaler equals 0.70.OD. The wholesaler is providing both amplification and smoothing.OE. The wholesaler is providing a dampening (anti-bullwhip) effect.

Supply chain inefficiencies are caused by the bullwhip effect, another distribution channel phenomena, which is caused by demand projections. It makes reference to growing stock fluctuations due to changes in customer demand as one advances further up the supply chain. Businesses must project demand in order to strategically place stock and other assets since client demand is occasionally completely consistent. Conjectures are occasionally entirely accurate and rely on insights. Since estimation errors happen, businesses frequently carry "safety stock" as an inventory buffer.Additionally, the question asks that you assume that a supply chain's wholesaler and retailer both placed orders for 20,000 units in the first month. The store then reduces its order quantity by 1000 units in month 2. Option (e): The wholesaler is providing a dampening (anti-bullwhip) effect if it reduces its order amount by 700 units in month 2 after that. Whereas the other options being - The wholesaler is providing both amplification and smoothing; The wholesaler is contributing to the bullwhip effect; Neither amplification nor smoothing is present & The bullwhip measure for the wholesaler equals 0.70; are not in-line with the concept of the question that is being asked here, therefore these options are not chosen here.