Suppose That in Month 1, Both the Retailer and the Wholesaler

question 27

Multiple Choice

Suppose 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 order size by 1000 units. If the wholesaler then decreases its order size in month 2 by 700 units, which of the following is true?

• A) The wholesaler is contributing to the bullwhip effect.
• B) The wholesaler is providing a dampening (anti-bullwhip) effect.
• C) The bullwhip measure for the wholesaler equals 0.70.
• D) Neither amplification nor smoothing is present.
• E) The wholesaler is providing both amplification and smoothing.

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