Sabrina_Funes_9.3 Assignment Textbook Questions.doc

Sabrina_Funes_9.3 Assignment Textbook Questions.doc - What...

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What is the bullwhip effect and how CPFR can benefit the supply chain partners minimizing the bullwhip effect? Bullwhip effect refers to the failure of the supply chain to adequately recognize customer demands along the supply chain resulting in stock out or overstocking situations. It results in the fluctuation of orders from suppliers down to retailers and indicates the lack of harmonization within the supply chain. Each member of the supply chain, in this case, has a differing idea of customer demands hence the demand estimations are exaggerated and extorted, as the supply chain member is detached from the customers (Chopra & Meindl, 2007). CPFR combines the aptitude of various partners in the preparation and meeting of customer demands. The practice enables supply chain partners to align their goals and allow an effective and efficient exchange of information. It strengthens communication throughout the supply chain thus ensuring efficient management of inventory.
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