Final answer:
The bullwhip effect refers to the magnification of demand variability as it moves upstream in the supply chain, where slight consumer demand changes can result in larger changes in manufacturers' orders.
Step-by-step explanation:
The phenomenon where fluctuations in customer demand cause larger variations in demand further up the supply chain is known as the bullwhip effect. This effect occurs because each upstream participant in the supply chain (from retailers to manufacturers) tends to order more than needed as a way to hedge against potential supply shortages. As a result, even slight changes in consumer demand can lead to much larger changes in the orders placed from manufacturers, causing the bullwhip effect.