A retailer could misread a demand signal doubling its normal order, and the wholesaler could respond and also double its order resulting in four times the retail order. This is an example of the bullwhip effect.

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This is a classic example of the bullwhip effect, where small fluctuations in demand at the retail level can result in larger and more amplified fluctuations in orders at the wholesale and manufacturing levels.

A Retailer Could Misread a Demand Signal Doubling Its Normal