What term describes the phenomenon where demand fluctuations amplify up the supply chain?

The term for the phenomenon where demand fluctuations amplify up the supply chain is the bullwhip effect.

A small change in consumer purchases can become a much larger change in orders placed by retailers, wholesalers, distributors, and manufacturers. Each participant forecasts demand separately and may add safety stock, batch orders, or overreact to shortages. As a result, upstream suppliers see more volatility than exists at the point of sale.

The name compares the pattern to cracking a whip: a small movement at the handle produces a much larger motion at the tip. Management scholar Jay Forrester described the underlying dynamics in Industrial Dynamics in 1961, so the phenomenon is also called the Forrester effect. Later research, notably by Hau Lee and colleagues in 1997, identified demand-signal processing, order batching, price variation, and rationing as major causes.

A commonly confused idea is a simple ripple effect. That phrase can describe spreading consequences generally, but bullwhip effect specifically concerns amplified demand or ordering variability within a supply chain. Better information sharing and smaller, more frequent replenishment orders can reduce it.