Question

Juicebox Inc., a fruit juice processing company, has been facing irregular demand patterns for the last two years. These large fluctuations have created a bullwhip effect for the company. Which of the following steps will Juicebox Inc. most likely take to cope with this effect?

a. reduce the number of employees to cut costs
b. follow the just-in-time inventory policy
c. carry larger inventories
d. reduce its annual production of juice

Answer 1

The correct option is (b)

Step-by-step explanation:

Bullwhip effect is an effect caused as a result of variations in demand. it affects the supply chain management. Bullwhip effect causes as a result of irregular demand that affects retailers and subsequently move above the supply chain to impact manufacturers and wholesalers adversely.

One of the remedies to cope with bullwhip effect is just in time approach as inventory is created when there is an increase in demand keeping erratic demand in control. This will not create large inventory or shortage, thereby reducing the bullwhip effect.