The "Bullwhip" Effect

question 140

Multiple Choice

The "bullwhip" effect

• A) occurs as orders are relayed from retailers to wholesalers
• 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

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit.

Equity Multiplier

A financial ratio indicating how much of a company's assets are financed by shareholders' equity.

Total Assets

The sum of all resources owned by a company, valued in terms of the financial benefits they bring, and listed on the balance sheet.

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including debts and other financial commitments.