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Assume that the sales orders will fluctuate during the year. To avoid the bullwhip effect, we...

Assume that the sales orders will fluctuate during the year. To avoid the bullwhip effect, we would ideally like to apply "pure" production smoothing such that we produce exactly the same every quarter. If demand for quarters 1 through 4 is 1,000, 1,200, 800, and 1,400 respectively, then what should our production be every quarter?

a. 1,400 - the maximum demand

b. 1,100 - the average demand

c. Exactly equal to the demand of the corresponding quarter

d. 800 - the minimum demand

business   Operations-Management   
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Answer #1

c. Exactly equal to the demand of the corresponding quarter

As your other options can't fulfill the demand of the sales.

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