The Bullwhip Effect

question 130

Multiple Choice

The bullwhip effect:

• A)occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers.
• B)results in increasing fluctuations at each step of the sequence.
• C)increases the costs associated with inventory in the supply chain.
• D)occurs because of distortions in information in the supply chain.
• E)All of the above are true.

---

Definitions:

Breakeven Chart

A graphical representation that shows when total cost and total revenue are expected to be equal, indicating no net loss or gain.

Cost-Volume-Profit

Analysis that examines the effects of changes in costs and volume on a company's profit.

High-Low Method

An accounting technique used to estimate the fixed and variable costs associated with producing goods or services by analyzing the highest and lowest levels of activity.

Variable Cost

Costs that vary directly with the level of production or volume of output, such as materials and labor directly involved in manufacturing.