What occurs when distorted product-demand information ripples from one partner to the next throughout the supply chain?

Question

BlackTom AI · Accepted Answer

When considering how distorted product-demand information propagates through a supply chain, the scenario involves amplifying variations as information moves from one stage to the next.
Option 1: 'Predictive analytics effect' claims a specific analytics-related phenomenon. While analytics can influence decisions, the classic amplification of demand variability across the chain is not typically labeled this way, making this option misaligned with the standard concept.
Option 2: 'The bullwhip effect' directly describes the phenomenon where small changes in consumer demand cause progressively larger fluctuations in orders and inventories as you move upstream in the supply chain. This matches the described ripple of distorted information and is the established term for this pattern.
Option 3: 'EDI effect' suggests an impact arising from electronic data interchange processes. EDI facilitates information flow but does not by itself characterize the amplification of demand signals across multiple trading partners.
Option 4: 'Call scripting effect' implies an impact related to standardized call scripts, which is unrelated to supply chain demand signal distortion and does not explain ripple effects across partners.
In summary, the core idea is a systematic amplification of demand information as it travels through the chain, which aligns with the bullwhip effect rather than the other listed possibilities.

What occurs when distorted product-demand information ripples from one partner to the next throughout the supply chain?

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