IGNOU BRL 115 2026 - Explain the Bullwhip Effect in supply chains. How does infor

Question

Explain the Bullwhip Effect in supply chains. How does information sharing and demand forecasting help in minimizing its impact on a retail business?

12 Feb 2026

Answer :

Word Count : 469

The Bullwhip Effect is a phenomenon in supply chain management where small fluctuations in customer demand at the retail level cause progressively larger variations in orders and inventory as one moves upstream through the supply chain. In the context of retail business, this means that a minor increase or decrease in customer purchases can result in exaggerated responses from wholesalers, distributors, and manufacturers. For example, if a retail store experiences a sudden surge in sales of a particular product, it may place larger-than-necessary orders with its supplier to avoid stockouts. The supplier, in turn, interprets this as a sustained increase in demand and produces even more, which can

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