Asked by Nicki Gagliano on May 25, 2024
Verified
The "bullwhip" effect occurs when forecast errors are magnified and demand variability increases as orders move upstream from retailers to distributors to producers.
Bullwhip Effect
A phenomenon where inaccurate or distorted demand information in the supply chain causes drastic swings in inventory levels upstream.
Demand Variability
Fluctuations in customer demand over a period, impacting inventory management, production planning, and supply chain efficiency.
- Identify the causes and consequences of the "bullwhip" effect in supply chains.
Verified Answer
PV
Ph?m V?n Ph?ngMay 29, 2024
Final Answer :
True
Explanation :
This statement accurately describes the bullwhip effect, which is a common phenomenon in supply chain management. As demand signals move upstream from retailers to wholesalers to manufacturers, small fluctuations can be amplified into significant swings in inventory levels and procurement decisions. This can lead to inefficiencies, excess inventory, and stockouts.
Learning Objectives
- Identify the causes and consequences of the "bullwhip" effect in supply chains.