Giving quantity discounts based on annual volume instead of single order size helps to control which supply-chain issue?
A) control risk
B) environmental risk
C) the bullwhip effect
D) unethical supplier behavior
E) vendor-managed inventory

Question

Quizplus · Accepted Answer

Giving quantity discounts based on annual volume helps to control the bullwhip effect in the supply chain. This is because it incentivizes customers to order in larger quantities and spread out their ordering over a longer period, rather than placing many small orders in quick succession. This can help to smooth out demand and reduce the impact of the bullwhip effect, which is characterized by increasing demand variability as we move upstream in the supply chain. The other options (control risk, environmental risk, unethical supplier behavior, and vendor-managed inventory) are not directly addressed by offering quantity discounts based on annual volume.

Giving Quantity Discounts Based on Annual Volume Instead of Single