4 Flashcards
1
Q
To solve P&G problem, they introduced
Pros
Cons
A
VMI
Vendor-Managed Inventory System
Pro = more efficient system Con = Trust issues
2
Q
4 Major causes of bullwhip effect
A
- Forecasting based on orders, not customer demand
- Batch ordering
- Price fluctuation
- False order (stock up when rationing)
3
Q
Moving average bullwhip effect is the ratio of
A
variance of orders / variance of demand by customer
4
Q
What’s bigger bullwhip effect or lower bound
A
bullwhip effect always
5
Q
Exponential smoothing used when
A
actual demand has large variations
6
Q
(for bullwhip effect)
When alpha approaches 0…
A
forecasted data is better than actual data
7
Q
Moving average and exponential smoothing will have same variance of forecasting errors if
A
a = 2/(p+1)
8
Q
variance increases up the supply chain..
for centralization
for decentralization
A
Additively
Multiplicatively
