The Bullwhip Effect: Managerial Insights on the Impact of Forecasting and Information on Variability in a Supply Chain
An important observation in supply chain management, popularly known as the bull-whip effect, suggests that demand variability increases as one moves up a supply chain. For example, empirical evidence suggests that the orders placed by a retailer tend to be much more variable than the customer demand seen by that retailer. This increase in variability propagates up the supply chain, distorting the pattern of orders received by distributors, manufacturers and suppliers.
KeywordsSupply Chain Lead Time Inventory Level Customer Demand Inventory Policy
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