List causes of the bullwhip effect, Operation Management

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Question :

(a) The Volume-Variety characteristics in any business operations directly influence the layout and the flow of transformed resources. Discuss the four possible types of layout in an organization.

(b) The Bullwhip effect is a well-established, frequent, and expensive occurrence in a wide variety of companies and industries due to modest fluctuations in consumer demand that are dramatically amplified as they proceed up the supply chain.

(i) List five causes of the Bullwhip effect

(ii) What are the different approaches used by companies to counter this phenomenon?

(c) ACD computer sells Toshiba notebooks which cost the store $300 each time it places an order with the supplier. The annual carrying cost associated with the notebook in inventory is $150. The Procurement manager estimates that the demand for such notebook will be 1500 units yearly. Determine optimal order quantity and total annual inventory costs.


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