Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ravi has opened a dairy shop in Jaipur. He planned to buy cottage cheese from a wholesaler and sell it to customers. The current cottage

Ravi has opened a dairy shop in Jaipur. He planned to buy cottage cheese from a wholesaler and sell it to customers. The current cottage cheese prices are floating at 300 per kilogram. To gain the attention of his customers and capture a big market share, Ravi decided to sell the cheese at 250 per kilogram for the first month. At this price, he was making neither a profit nor a loss. As a result, his shop became extremely popular in Jaipur. On average, he was selling 200 kilograms of cottage cheese every day. Taking this as a positive sign, he got into a contractual agreement with his wholesaler to provide him with 200 kilograms of cottage cheese every day. After the first month, Ravi had captured a significant market share. Then, to stabilise the prices, he started selling the cheese at 300 per kilogram. This resulted in a huge loss of sales, and his average daily sales fell to only 20 kilograms. He did not know what to do with the excess supply of 180 kilograms (200-20) of cottage cheese. 

Determine what caused the bullwhip effect in the aforementioned scenario.

 



Step by Step Solution

There are 3 Steps involved in it

Step: 1

The bullwhip effect in supply chain management refers to the phenomenon where small fluctuations in ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Frank Woods Business Accounting Volume 2

Authors: Frank Wood, Alan Sangster

10th Edition

0273693107, 978-0273693109

More Books

Students also viewed these General Management questions

Question

Draw a schematic diagram of I.C. engines and name the parts.

Answered: 1 week ago

Question

Identify the most stable compound:

Answered: 1 week ago