A large manufacturing company offered a 40 percent discount on all its products for a short period of time.As a result,the retailers ordered and stocked more products than needed to cash in on the opportunity.This scenario exemplifies the ________.

Question

Quizplus · Accepted Answer

The scenario mentioned in the question exemplifies the bullwhip effect. The bullwhip effect occurs when a small change in consumer demand causes a ripple effect and amplifies up the supply chain. In this case, the retailer's overstocking was a result of the perception that the offer was time-limited and was unlikely to be repeated in the future. The resulting surge in orders was not based on actual demand, and it caused a bullwhip effect up the supply chain, leading to distortions in production and inventory levels.

A Large Manufacturing Company Offered a 40 Percent Discount on All