Book Ch5: The Value of Information

Question 1

What are five factors that effect variability in the supply chain?

Answer 1

1. Demand forecasting
2. Lead time
3. Batch ordering
4. Price fluctuation
5. Inflated orders

Question 2

What are four methods to cope with the bullwhip effect?

Answer 2

1. Reducing uncertainty: Centralizing demand information
2. Reducing variability: Through everyday low pricing
3. Lead time reduction: Through cross docking
4. Strategic partnership: Changing the way information is shared

Question 3

What are two contracts that provide incentives for buyers to reveal their true forecasts?

Answer 3

1. Capacity reservation contracts

2. Advance purchase contracts