The bullwhip effect:
A) occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers.
B) results in increasing fluctuations at each step of the sequence.
C) increases the costs associated with inventory in the supply chain.
D) occurs because of distortions in information in the supply chain.
E) All of these are true.

Question

Quizplus · Accepted Answer

All of the statements are true regarding the bullwhip effect. It occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers, resulting in increasing fluctuations at each step of the sequence. This, in turn, increases the costs associated with inventory in the supply chain. Distortions in information in the supply chain serve as the major cause of the bullwhip effect.

The Bullwhip Effect