Define the Bullwhip Effect

question 50

Essay

Define the bullwhip effect. Draw a supply chain and the impact of the bullwhip effect in the downstream segment of the supply chain. How can organizations mitigate the bullwhip effect? Provide an example of an organization that successfully manages the bullwhip effect.

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Definitions:

Indirect Method

The indirect method is a way of calculating cash flows from operating activities by starting with net income and adjusting for non-cash transactions.

Indirect Method

A way of reporting net cash flow from operating activities by starting with net income and adjusting for changes in balance sheet items.

Direct Method

A accounting approach for creating the cash flow statement, which lists major classes of gross cash receipts and payments.

Operating Activities

Activities related to the day-to-day functions of a business involved in producing and selling its products or services, which are reflected in its cash flow.