The following is an example of the bullwhip effect:
A)Barkley's produces a defective product and thus realizes an excessive increase in consumer returns
B)Barkley's products are so successful that it adds a new retailer for distribution
C)Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers
D)Barkley's is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain

Question

The following is an example of the bullwhip effect:
A)​Barkley's produces a defective product and thus realizes an excessive increase in consumer returns
B)​Barkley's products are so successful that it adds a new retailer for distribution
C)​Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers
D)​Barkley's is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain

Quizplus · Accepted Answer

The bullwhip effect refers to the magnification of demand fluctuations as they move up the supply chain from the customer to the manufacturer. In this scenario, Barkley's incorrectly anticipates consumer demand, which causes stockouts at popular retailers. This creates a situation where the retailers overreact and over-order to compensate, which leads to inflated demand estimates in the supply chain. As a result, the bullwhip effect is observed, where the fluctuation of demand is magnified as it moves up the supply chain.

The Following Is an Example of the Bullwhip Effect