The bullwhip effect ______.
A)results from information distortion
B)is due to low elasticity of demand
C)is due to low elasticity of supply
D)results from too much information

Question

Quizplus · Accepted Answer

The bullwhip effect is a phenomenon where small changes in demand at the consumer end of the supply chain lead to increasingly larger changes in demand further up the chain. This happens due to information distortion as each stage of the chain tries to anticipate future demand and adjust their production or inventory levels accordingly. This can result in overproduction, stockouts, and inefficient use of resources. Therefore, choice A is the correct answer as the bullwhip effect results from information distortion.

The Bullwhip Effect ______