The Following Is an Example of the Bullwhip Effect

question 25

Multiple Choice

The following is an example of the bullwhip effect:

• A)​Barkley's produces a defective product and thus realizes an excessive increase in consumer returns
• B)​Barkley's products are so successful that it adds a new retailer for distribution
• C)​Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers
• D)​Barkley's is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain

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Definitions:

GDP Deflator

An index reflecting the price levels for all newly produced, domestic, final goods and services within a country.

Per Capita Real GDP

Real GDP divided by population.

Deflation

A drop in the average cost of goods and services, typically connected with a boost in the purchasing power of money.

Real GDP

An economic metric that measures the value of all goods and services produced by a country in a year, adjusted for inflation, reflecting the real growth.