We consider two supply chains that send a product from a manufacturer (or supplier) to a regional warehouse to a local distribution center to a store. Supply chain A operates such that the store sends both their order and their sales to the local distribution center; the local distribution center sends their order, the store's sales, and the orders they have sent to the store to the regional warehouse; and the warehouse sends their order, the store's sales, the orders that were sent to the regional warehouse, and their order to the manufacturer. Supply chain B operates such that the store sends both their order and their sales of the product to the local distribution center. The distribution center only sends their order to the warehouse and the warehouse only sends their order to the manufacturer. Discuss which supply chain will be less affected by the bullwhip effect and the reason why it will be.

A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
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We consider two supply
chains that send a product from a manufacturer (or supplier) to a
regional warehouse to a local distribution center to a store.
Supply chain A operates such that the store sends both their
order and their sales to the local distribution center; the local
distribution center sends their order, the store's sales, and the
orders they have sent to the store to the regional warehouse; and
the warehouse sends their order, the store's sales, the orders that
were sent to the regional warehouse, and their order to the
manufacturer. Supply chain B operates such that the store sends
both their order and their sales of the product to the local
distribution center. The distribution center only sends their order
to the warehouse and the warehouse only sends their order to the
manufacturer. Discuss which supply chain will be less affected
by the bullwhip effect and the reason why it will be.
Transcribed Image Text:We consider two supply chains that send a product from a manufacturer (or supplier) to a regional warehouse to a local distribution center to a store. Supply chain A operates such that the store sends both their order and their sales to the local distribution center; the local distribution center sends their order, the store's sales, and the orders they have sent to the store to the regional warehouse; and the warehouse sends their order, the store's sales, the orders that were sent to the regional warehouse, and their order to the manufacturer. Supply chain B operates such that the store sends both their order and their sales of the product to the local distribution center. The distribution center only sends their order to the warehouse and the warehouse only sends their order to the manufacturer. Discuss which supply chain will be less affected by the bullwhip effect and the reason why it will be.
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