Question

Which of the following is the prescribed remedy when the bullwhip effect is caused by shortage gaming? a. price stabilization

b. channel coordination
c. share demand information
d. increase capacity
e. allocate orders based on past demand

Answer 1

e.

Step-by-step explanation:

The bullwhip effect refers to drastic swings in regards to inventory based on swings/changes in customer demand. Therefore the best remedy that can be prescribed is to allocate orders based on past demand, as history tends to repeat itself and will give you an informed idea or what you should expect. Therefore you can base your decisions on this information.