Final answer:
Quantity discounts based on annual volume control the bullwhip effect by encouraging stable order patterns, which help in planning production and inventory. Improving information flow through better labor policies and technology sharing can reduce the impact of imperfect information on supply chains.
Step-by-step explanation:
Giving quantity discounts based on annual volume instead of single order size helps to control the bullwhip effect in the supply chain. Offering incentives for larger cumulative orders encourages steadier order patterns, as opposed to erratic single-order quantities that can lead to inventory oscillations up and down the supply chain. By focusing on long-term volume, companies can plan production and inventory management more effectively, mitigating the risk of stockouts or excess inventory and contributing to a more stable supply chain.
To reduce the risk of imperfect information, which can affect price, quantity, and quality, companies must commit to changes in labor policies and invest in their labor force, both through international agreements and at national levels. These improvements in labor relationships and technology sharing with developing countries can foster more refined and faster product distribution, strengthening the global supply chain.