The Phenomenon That Occurs When Small Changes in Demand Occur

question 70

Multiple Choice

The phenomenon that occurs when small changes in demand occur, the variation in production and inventory levels becomes increasingly amplified upstream at distribution centers, factories, and suppliers, that results in unnecessary costs and difficulties in managing material flow is known as:

• A) bullwhip effect.
• B) upstream variation.
• C) simulation.
• D) under-dumping.

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Definitions:

Balance Sheet

A financial statement that provides a snapshot of a company's financial position at a specific point in time, outlining assets, liabilities, and shareholders' equity.

Current Asset

An asset that can reasonably be expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Fixed Asset

A fixed asset is a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income, and is not expected to be consumed or converted into cash within a year.

Usefulness

The degree to which something serves a practical purpose or satisfies a need.