One Way to Reduce the Bullwhip Effect Is for Supply

question 30

Multiple Choice

One way to reduce the bullwhip effect is for supply chain members to

• A)make ordering decisions independently of each other.
• B)create demand forecasts independently of other supply chain members.
• C)share demand forecasts with other supply chain members.
• D)restrict information flows between supply chain members.

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Definitions:

Risk Aversion

A preference for options that offer more certainty and less potential for loss.

Insurance Policy

A contract between an individual or entity and an insurance company, outlining the terms under which insurance coverage is provided.

Adverse Selection

A situation where incomplete or asymmetric information leads to a market failure, typically in insurance markets, where riskier individuals are more likely to select into plans.

Insurance Companies

Organizations that provide financial protection and compensation for losses to individuals and entities in exchange for premiums.