PSU 006 Business Simulation Paper

PSU 006 Business Simulation Paper - PSU 006 Business...

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PSU 006 Business Simulation Paper In business, the supply chain department is extremely important. In many cases there are certain things that must be addressed within the supply chain that can benefit or destroy a business. A lot of times, smaller problems within a chain can cause larger problems if they are not fixed. In addition, if something is not noticed, this could potentially be catastrophic. One such example of a small problem creating a much larger one is called the bullwhip effect. The bullwhip effect is one of the problems in a supply chain that could destroy a business. This happens when a certain item becomes backlogged, and one department decides to make up for it greatly without waiting for there previous order to come in. This department is basically putting the business on a path for destruction if it is not fixed. This is because once the orders do come in, they pile in, and inventory will increase immensely. Having a backlog or having an inventory costs the company money, so anything in excess is bad, and that is why the bullwhip effect can be so destructive.
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