APICS Certified Supply Chain Professional (CSCP) — Question 490

Which of the following methods is used to minimize the bullwhip effect?

Answer options

• A. Outsourcing noncore business activities
• B. Reducing the number of stock keeping units (SKUs)
• C. Reducing lead time
• D. Increasing factory inventory

Correct answer: C

Explanation

Reducing lead time is effective in minimizing the bullwhip effect as it allows for quicker response to changes in demand, thus stabilizing inventory levels. The other options, such as outsourcing or increasing inventory, do not directly address the fluctuations in demand and can potentially worsen the bullwhip effect.