Which of the following strategies can help reduce the bullwhip effect in line control?

Which of the following strategies can help reduce the bullwhip effect in line control?

• A. Increasing order batch sizes
• B. Enhancing communication among supply chain partners
• C. Diminishing the accuracy of demand forecasting
• D. Limiting vendor collaboration

Answer: (B)

Enhancing communication among supply chain partners is a key strategy to mitigate the bullwhip effect in line control. The bullwhip effect refers to the phenomenon where small fluctuations in consumer demand at the retail level can lead to significant variances in orders placed at the wholesale, distributor, and manufacturer levels. This can result in inefficiencies such as excess inventory or stockouts. Improved communication among supply chain partners allows for better visibility into actual consumer demand, which helps in aligning production and inventory management accordingly. Sharing information related to sales data, forecasts, and inventory levels can enable all parties involved to make more informed decisions, reducing the delay and discrepancies that often exacerbate the bullwhip effect. In contrast, strategies like increasing order batch sizes or diminishing the accuracy of demand forecasting can lead to greater variability in order quantities and further amplify the distortions in the supply chain. Additionally, limiting vendor collaboration restricts the flow of information, which is counterproductive to reducing the bullwhip effect. Therefore, fostering clear communication among all stakeholders in the supply chain is vital to ensure smooth operations and accurate demand-supply alignment.

Enhancing communication among supply chain partners is a key strategy to mitigate the bullwhip effect in line control. The bullwhip effect refers to the phenomenon where small fluctuations in consumer demand at the retail level can lead to significant variances in orders placed at the wholesale, distributor, and manufacturer levels. This can result in inefficiencies such as excess inventory or stockouts.

Improved communication among supply chain partners allows for better visibility into actual consumer demand, which helps in aligning production and inventory management accordingly. Sharing information related to sales data, forecasts, and inventory levels can enable all parties involved to make more informed decisions, reducing the delay and discrepancies that often exacerbate the bullwhip effect.

In contrast, strategies like increasing order batch sizes or diminishing the accuracy of demand forecasting can lead to greater variability in order quantities and further amplify the distortions in the supply chain. Additionally, limiting vendor collaboration restricts the flow of information, which is counterproductive to reducing the bullwhip effect. Therefore, fostering clear communication among all stakeholders in the supply chain is vital to ensure smooth operations and accurate demand-supply alignment.