Variability in demand in the supply chain is amplified as orders move up the supply chain.This phenomenon is called __________.
A)market shifts
B)the bullwhip effect
C)continuous replenishment
D)demand forecasting

Question

Quizplus · Accepted Answer

The bullwhip effect refers to the phenomenon where small fluctuations in demand at the customer end of the supply chain can lead to bigger and bigger fluctuations further up the supply chain. This happens because each layer of the supply chain amplifies the fluctuations by ordering more than they need to compensate for uncertainty in demand. This can result in unnecessarily high inventory costs, poor customer service, and inefficient operations.

Variability in Demand in the Supply Chain Is Amplified as Orders