Efeito Chicote Ballou 5ed

BULLWHIP EFFECT

BALLOU, 5TH EDITION

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Question A

The main reasons to the bullwhip effect are demand forecast updating, long lead time, order batching, price fluctuations, rationing and shortage gaming/inflated orders.  The bullwhip lead high costs to the supply chain because a distortion and miscommunication of demand information between suppliers can cause excessive inventory, lost revenues, missed production schedules and poor customer service.

Question B

a. E-commerce and the Internet  can reduce the bullwhip effect because suppliers have access to more accurate demand information and  it can prevent distortion and miscommunication of demand information, and it reduces the lead time in order processing.

b. Express delivery reduces delays along the supply chain, this also reduces lead times and the associated demand variance.

c. Collaborative forecasts help all stakeholders in the supply chain to arrive at a common, agreed-upon forecast of end-customer demand and reduce the bullwhip effect.

d. Everyday low pricing could prevent demand fluctuations, which reduce the bullwhip effect , because  periodic promotions change forecasts by stimulate purchase creating artificial demand peaks and bottoms  increasing the variance in customer demand.

e. Vendor-managed inventory allows the supplier to monitor downstream demand and to make a well-informed decision about how much to keep on-hand and how much to ship to its customers. Thus, the supplier does not have to rely on order data to forecast demand and thus reduces the bullwhip effect.

f. Supply contracts align incentives in the supply chain, and reduce the uncertainty in demand by determining agreed-upon supply limits, thereby reducing the bullwhip effect.

Question C

a. Patients seeking services at a medical clinic: establish a priority of patient care can positively affect the processing time due to the limited number of resources (doctors, nurses, stretchers, operating rooms). A possible organization would be: attend the patients in order of arrival and prioritize patients care of serious medical conditions. In addition, many patients can be treated simultaneously, which speeds up the process, because while a patient is being examined other is at the same time receiving medication. And the clinic must ensure that the diagnoses are made accurately, which facilitates and accelerates the treatment of their patients. On the other hand, the strategies of "order batching" and "shipment consolidation" are not suitable for this process, due to the urgency of patient care and limited human and physical resources to attend them, then these strategies would probably increase the processing time.

b. Purchasing sheet steel from a steel manufacturer for use in auto body manufacture: The first strategy used by the steel manufacturer should be related to the accuracy of the customers’ orders, mainly in relation to size and number of steel plates. The next strategy can be the organization of production in batches, grouping several requests with the same size of the plates, reducing the setup time of the machines between different orders. Another operating procedure that positively influence the processing time is the fact that various processes are performed simultaneously accelerating the formation of batches.