The factory produces product and ships it to the distributor. The distributor sends it to the wholesaler when they receive an order. The wholesaler ships the product to the retailer as the retailer requests replenishment. The customer visits the retailer's bricks and mortar store to purchase the product when they run out. According to the bullwhip effect, which of these supply chain members is most likely subjected to the greatest variability in customer demand?
A)retailer
B)wholesaler
C)distributor
D)factory

Question

Quizplus · Accepted Answer

The bullwhip effect describes how small variations in demand at the retail level can cause progressively larger fluctuations in demand at the upstream stages of a supply chain. Therefore, the factory, being furthest upstream, is most likely to experience the greatest variability in customer demand.

The Factory Produces Product and Ships It to the Distributor