Question

Situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits are referred to as

Answer 1

Your answer is, the bullwhip effect.

The bullwhip effect

The bullwhip effect is to increase swings in inventory in response to shifts in consumer demand as one moves further up the supply chain. The concept first appeared in Jay Forrester 's Industrial Dynamics (1961) and thus it is also known as the Forrester effect.

The example of the bullwhip effect

Example of the bullwhip effect The products actual demand and that of its materials begin with the customer even though the products demand is affected the supply chain. For instance downwards when the actual customer's demand is eight, and the retailer might order ten from the distributor having extra two units are for stock safety.

Thus, The Bullwhip Effect is the correct answer.

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