1.) The bullwhip effect

occurs only when orders are relayed from retailers to wholesalers.

increases the costs associated with inventory in the supply chain and reduces the cost of backorders.

sometimes occurs because of price changes to a product in the supply chain.

is only an issue if you have more than three companies in the supply chain.

2.) Companies using electronic data interchange communicate by

faxing information between partners.

phoning orders on a daily basis.

creating a local area network.

exchanging documents in a standard format