Ravi opened a dairy shop in Jaipur. He planned to buy cottage cheese from a wholesaler and sell it to customers. The current cottage cheese prices are floating at ₹300 per kilogram. To gain the attention of his customers and capture a big market share, Ravi decided to sell the cheese at ₹250 per kilogram for the first month. At this price, he was making neither a profit nor a loss but his shop became extremely popular in Jaipur. On average, he was selling 200 kilograms of cottage cheese every day. Taking this as a positive sign, he got into a contractual agreement with his wholesaler to provide him with 200 kilograms of cottage cheese every day. Once Ravi had captured a significant market share, he started selling the cheese at ₹350 per kilogram. This resulted in a huge loss of sales and his average daily sales fell to only 20 kilograms. He did not know what to do with the excess supply of 180 kilograms (200-20) of cottage cheese. Determine what caused the bullwhip effect in the aforementioned scenario.Price fluctuationsLack of communicationFree return policy
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