When developing a functional strategy, such as operations strategy, one of the most important considerations for a firm is that its functional strategy: supports the overall (organizational) strategy of the firm. has the firm use as much automation as possible. requires the use of an equal amount of labor and automation in the various production processes, remains unchanged throughout the life of the firm. imposes a minimal requirement of capital. The Bullwhip Effect: is the benefit received from the supplier's offering of a quantity discount. occurs when finished goods inventory exceeds the amount of storage space available. has to do with inventory oscillations or variability in order quantities becoming progressively larger as one moves backwards (upstream) through the supply chain. is felt when a customer is dissatisfied because a product malfunctions is an outcome of delay in launching a product to market