Asked by Rachael Petersen on May 20, 2024

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The fact that each stage in a supply chain forecasts demand based on the stream of orders received from the downstream stage results in

A) forecasts based on actual consumer demand patterns.
B) a reduction in demand as we move up the supply chain from the retailer to the manufacturer.
C) a magnification of fluctuations in demand as we move up the supply chain from the retailer to the manufacturer.
D) an increase in forecast accuracy.

Supply Chain

The entire system comprising people, organizations, resources, processes, and technology responsible for bringing a product from its raw material state, through manufacturing, to its final delivery to the consumer.

Demand Forecasts

are predictions about future consumer demand for products or services, based on historical data, market trends, and analysis, used for planning purposes.

Consumer Demand

Consumer demand refers to the desire and ability of purchasers to acquire goods or services at a given price.

  • Understand the mechanisms of demand forecast amplification and its consequences on supply chain performance.
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AA
Aleesha ArmstrongMay 24, 2024
Final Answer :
C
Explanation :
The fact that each stage in a supply chain forecasts demand based on the stream of orders received from the downstream stage causes a magnification of fluctuations in demand as we move up the supply chain from the retailer to the manufacturer. This is known as the bullwhip effect, where small changes in consumer demand can result in significant changes in demand orders up the supply chain.