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SUPPLY REQUIREMENT (DRIVERS OF RISK (Discruptions (*Labor Dispute, Natural…
SUPPLY REQUIREMENT
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BULLWHIP EFFECT
It is an occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance than the sales to the end customer. These irregular orders in the lower part of supply chain develop to be more distrinct higher in the supply chain.
It is bad in logistics as this variance can interrupt the smoothness of the supply chain process as each link in the supply chain will over or under estimate the product demand resulting in exaggerated fluctuations.
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Supply Contracts
Each party in the chain focuses on its own profit and make decisions with little regard to their impact on other supply chain partners.
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