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by aasasd 2244 days ago
> “The town might have a 100-gallon swing in demand for milk from one week to the next without any explanation of why. One week, nobody wants whole milk; the next week, everyone wants 2%.”

IIRC it's a known phenomenon, but I can't remember the name right now. Buyers overestimate the demand, then the next cycle they have stock left, then again buy double because the shop might not have the thing next time. So the demand keeps swinging thereafter.

In fact, the dude is sorta lucky since he can just ask everyone what they want, no need to guess from jumping numbers.

1 comments

That's exactly where I learned of the effect—the game was probably recently mentioned on HN.

https://en.wikipedia.org/wiki/Bullwhip_effect is the article specifically about the fluctuations.

Come to think of it, apparently in the case of the Alaskan dude just one level of interaction is enough to summon the effect with 100% variation. I wonder what the Costco managers think of the picture on their end and whether they in turn order even more reserves.