Consider the supply chain illustrated below:
Last year, the retailer’s weekly variance of demand was 200 units. The variance of orders was 500, 600, 750, and 1,350 units for the retailer, wholesaler, distributor, and manufacturer, respectively. (Note that the variance of orders equals the variance of demand for that firm’s supplier.)
a) Calculate the bullwhip measure for the retailer.
b) Calculate the bullwhip measure for the wholesaler.
c) Calculate the bullwhip measure for the distributor.
d) Calculate the bullwhip measure for the manufacturer.
e) Which firm appears to be contributing the most to the bullwhip effect in this supply chain?
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