The Bullwhip Effect describes amplification of order variability upstream in a supply chain.

The Bullwhip Effect describes amplification of order variability upstream in a supply chain.

• A. Forecast Bias
• B. Seasonal Variation
• C. The Bullwhip Effect
• D. Random Variation

Answer: (C)

The main idea here is how demand signals become more volatile as they move upstream in a supply chain. The Bullwhip Effect describes exactly that: small changes in what customers actually want can cause ever larger swings in orders sent from retailers to wholesalers and manufacturers because of forecasting, lead times, order batching, and reactions to perceived demand. That amplification leads to bigger oscillations in production schedules, inventories, and costs than the original consumer demand signal. So this description matches the Bullwhip Effect. Forecast bias is about a systematic over- or under-forecast, not the amplification of variability. Seasonal variation refers to predictable patterns tied to seasons, not the broad amplification of orders as you go upstream. Random variation is unpatterned noise, not the structured amplification described by the bullwhip phenomenon.

The main idea here is how demand signals become more volatile as they move upstream in a supply chain. The Bullwhip Effect describes exactly that: small changes in what customers actually want can cause ever larger swings in orders sent from retailers to wholesalers and manufacturers because of forecasting, lead times, order batching, and reactions to perceived demand. That amplification leads to bigger oscillations in production schedules, inventories, and costs than the original consumer demand signal.

So this description matches the Bullwhip Effect. Forecast bias is about a systematic over- or under-forecast, not the amplification of variability. Seasonal variation refers to predictable patterns tied to seasons, not the broad amplification of orders as you go upstream. Random variation is unpatterned noise, not the structured amplification described by the bullwhip phenomenon.