University of Central Florida (UCF) MAR3203 Supply Chain and Operations Management Practice Exam 2

Order batching practices significantly contribute to larger order size fluctuations in a supply chain. When companies use order batching, they tend to accumulate inventory over time and then place larger orders at once rather than ordering smaller quantities regularly. This approach can create variability in order sizes, leading to irregular supply chain flows.

As demand for products fluctuates, businesses might find themselves purchasing in bulk to take advantage of discounts or to reduce ordering frequency, which further exacerbates this issue. These larger, less frequent orders can disrupt the flow of goods through the supply chain, causing inefficiencies in production schedules, transportation planning, and inventory management.

In contrast, practices like consistent inventory turnover and price stability typically promote smoother operations and may help mitigate fluctuations. Open communication channels can facilitate better coordination amongst supply chain partners, potentially aligning orders more closely with actual demand and reducing variances in order sizes.