Which of the following best describes the bullwhip effect?
A) the value of a telecommunications network is proportional to the square of the number of users connected to the system
B) the performance improvement to be gained from using some faster mode of execution is limited by the fraction of the time the faster mode can be used
C) the variability in the size and timing of orders increases at each stage up the supply chain, from customer to supplier
D) improvements in technology lead to new applications, which result in new markets and industries

Question

Quizplus · Accepted Answer

The bullwhip effect refers to the phenomenon where small fluctuations in demand at the customer level can result in large variations in demand further up the supply chain. This is because each stage of the supply chain tends to order larger quantities than necessary to buffer against uncertainties, which leads to an amplification of demand variability.

Which of the Following Best Describes the Bullwhip Effect