A retailer notices a small increase in customer purchases and orders double the amount from the distributor. The distributor then orders triple from the manufacturer. This scenario is an example of:

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BlackTom AI · Accepted Answer

In this scenario, you can observe a cascading amplification of orders along the supply chain starting from the retailer and moving up to the manufacturer. The pattern where a small uptick in customer purchases leads to progressively larger orders upstream is characteristic of the bullwhip effect.
Option 1: 'Efficient supply chain design'—While efficiency is desirable, this term does not describe the observed amplification phenomenon. It would imply stable, predictable ordering with minimal variability, which conflicts with the described escalation.
Option 2: 'Postponement'—Postponement refers to delaying final activities or customization until customer demand is known. It is a strategy for managing uncertainty, not an explanation for amplified ordering across tiers.
Option 3: 'Bullwhip effect'—This option directly aligns with the described behavior: small demand changes at the consumer level causing increasingly larger orders upstream, due to factors like demand forecasting, order batching, and lead-time effects. The description matches the core idea of the bullwhip phenomenon.
Option 4: 'Supply chain integration'—Integration pertains to aligning processes and systems across the supply chain for coordination and visibility. It does not specifically describe the amplification of orders or the ripple effect seen in the scenario.

MGS3100W10 25 Fall OM Exam 3 - Requires Respondus LockDown Browser

A retailer notices a small increase in customer purchases and orders double the amount from the distributor. The distributor then orders triple from the manufacturer. This scenario is an example of:

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