List and explain TWO of the causes of the bullwhip effect.

What will be an ideal response?

a.Demand Forecast Updating ? Using varying customer orders to create an updated forecasts, production schedules, and purchased requirementsb.Order Batching ? Ordering in large amounts in order to decrease order and transportation costsc.Price fluctuations ? Price incentives may cause erratic buying patterns when buyers attempt to stock up on inventory in order to take advantage of low costs, even though demand remains low/constantd.Rationing and Shortage Gaming ? shorting buyer orders when demand exceeds supply. This may cause buyers to over-inflate order sizes in an attempt to meet their demand during these times of short supply.

Business

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