Question

La Belle Inc. introduced a new line of accessories for teenaged girls last season. Following its immense popularity with the targeted group, the company anticipated high sales this season. It ordered raw materials accordingly, and even ensured that they had sufficient inventory to meet excess demand, if any. However, the success of the new line turned out to be a fad, as the teens soon turned to other products offered by competing brands, and La Belle's sales declined. This caused a huge discrepancy in the amount of raw materials they needed and the amount of inventory they had piled up in anticipation of good sales. This is an example of ________.

Answer 1

The bullwhip effect.

Step-by-step explanation:

This effect ocurs when a company orders more goods to meet the anticipated new demand. It happens because the demand for goods is based on demand forecasts from companies, rather tah actual consumer demand. (They end with a lot of storage and no one is buying, in this example.)

Hope this is usefull!