La Belle Inc.introduced a new line of accessories for teenage girls the last season.Following its immense popularity with the targeted group,the company anticipated high sales in the current season and ordered raw materials accordingly..However,the success of the new line turned out to be a fad as the teens soon turned to other products offered by competing brands and La Belle's sales declined.This forecasting error caused a huge discrepancy in the amount of raw materials they needed and the amount of inventory they had already piled up in anticipation of good sales.This is an example of ________.

Question

Quizplus · Accepted Answer

This scenario is an example of the bullwhip effect, where a small change in consumer demand can cause a ripple effect up the supply chain, leading to forecast errors and inventory imbalances. La Belle's overestimation of sales resulted in them ordering too many raw materials, leading to excess inventory and financial losses.