The bullwhip effect is characterized by:
A) ordering patterns that experience increasing variance as you proceed downstream in the chain.
B) ordering patterns that experience increasing variance as you proceed upstream in the chain.
C) purchasing patterns that experience increasing variance downstream in the chain.
D) purchasing patterns that experience decreasing variance as you proceed upstream in the chain.

Question

Quizplus · Accepted Answer

The bullwhip effect refers to the increase in demand variability that occurs as you move upstream in a supply chain. This means that as you move from the end customer to the wholesaler, distributor, manufacturer, and supplier, the demand variability increases, leading to a distortion of the demand signal. As a result, each level in the supply chain must carry more safety stock, resulting in higher inventory holding costs and reduced efficiency. Choice B accurately describes this effect.

The Bullwhip Effect Is Characterized By