The bullwhip effect occurs when slight to moderate demand variability becomes magnified as demand information is transmitted back upstream.

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The bullwhip effect is a well-known phenomenon in supply chain management where small variations in demand can lead to exaggerated swings in inventory levels as the information travels upstream from the end customer through the supply chain. This can occur due to a lack of communication and coordination between different players, leading to overproduction, excessive stockholding, and inefficiencies in the supply chain.

The Bullwhip Effect Occurs When Slight to Moderate Demand Variability