Supply chain 6th edition 3rd chapter:
What are the impact of the high-low pricing adopted by major supermarkets on supply chain performance?
Expert Answer
The high low pricing startegy is used in Supermarket for competing with other players in market and gain attention from customers. Some of the supply chain implication are
The dynamic pricing results in demand fluctuation of product and it will create Bull whip effect
This will hit the service level adversly as storage and distribution would be a challenge because of variable demand of the product based on pricing.
Supply chain become directly proportional to price variability or elasticity,
Inventory
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