bullwhip effect

Definition

The unexpected distortion of the supply chain caused by demand oscillations that can have a negative effect on business performance, such as inventory disruptions, quality control problems, diminished customer service, and increased costs of materials and manpower. For example a successful sales promotion can reverberate up the supply chain to disrupt inventory, production and supply ordering.

Use bullwhip effect in a sentence

The bullwhip effect was something that we had to pay a lot of attention to because it impacted our company.

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Mary's promotion had resulted in a bullwhip effect that caused the inventory to run out more quickly than the company had anticipated.

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The bullwhip effect had dramatically affected our company as many elements and variables affected our bottom line, some of which negatively affected us.

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