Imagine a simple scenario: a clothing store experiences a slight increase in demand for a trendy t-shirt design. This week, ten additional customers purchase that t-shirt. To avoid running out of stock, the store manager places a larger-than-usual order with their wholesaler. The wholesaler, seeing what appears to be an increased demand, doubles down and places an even larger order with the manufacturer. The manufacturer, in turn, interprets this as a signal to ramp up production and orders a surplus of fabric from suppliers. The result? The supply chain spirals…
Read MoreDo You Know the Bullwhip Effect? How an Order of 10 T-Shirts Can Ruin an Entire Factory – Welcome to the Whiplash Effect!
