APICS Certified Supply Chain Professional (CSCP) — Question 399

Which of the following factors is most likely to be the cause of upstream variation in demand along the supply chain?

Answer options

• A. A liberal return policy
• B. Use of postponement technique
• C. Small size of order batching
• D. Stabilization of prices

Correct answer: B

Explanation

The correct answer is B, as the use of postponement techniques can help align production with actual demand, reducing upstream variations. The other options, such as a liberal return policy (A) and stabilization of prices (D), do not directly impact demand variation, while small order batching (C) tends to increase variability rather than decrease it.