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What is the 'bullwhip effect' in supply chain management? | QuestionStock

Representative image for question: What is the 'bullwhip effect' in supply chain management?

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What is the 'bullwhip effect' in supply chain management?

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What is the 'bullwhip effect' in supply chain management?

Options:

Amplification of demand variability moving upstream from retailers to suppliers
A method for reducing inventory by frequent small orders
A pricing strategy that increases margins near product launch
A contractual penalty for late deliveries

Correct answer: Amplification of demand variability moving upstream from retailers to suppliers

Explanation: The bullwhip effect is amplified demand variability upstream in a supply chain caused by distorted demand signals and order batching; Jay Forrester described related dynamics in 1961.

Created 2026-03-10T17:34:21.848Z. Updated 2026-03-10T17:34:21.848Z.