The bullwhip effect is a central phenomenon of supply chain management, arising out of the dynamic processes of the supply chain.[6] It describes that different demand patterns and even small changes in consumer demand can lead to fluctuations in order volumes, which can rise along the chain. This means there are small changes at the end-consumer, but as one moves up the supply chain to the manufacturer it can lead to large variations, as shown in figure 1. [10] As every organization attempts to solve its problem from its own perspective, the network oscillates in large swings. [10]
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10 QuickMBA, 2010, accessed 09.09.2012 http://www.quickmba.com/ops/bullwhip-effect/
I Contents
1. Definition
2. History of the Bullwhip effect
3. The Beer game
3.1 Example from class
4. Causes of the Bullwhip effect
4.1 Demand forecast updating
4.2 Order batching
4.3 Supply Shortage
4.4 Price Variations
5. How to counteract the bullwhip effect:
5.1 Avoid multiple demand forecast
5.2 Break order batches
5.3 Stabilize price
5.4 Eliminate gaming in shortage situations
6. Conclusion
II. Bibliography
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