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What is Bullwhip Effect

Chapter 181
Encyclopedia of Networked and Virtual Organizations
The variability in demand is magnified as we move from the customer to the producer in the supply chain
Published in Chapter:
Revision of the Bullwhip Effect
David de la Fuente (Oviedo University, Spain)
Copyright: © 2008 |Pages: 7
DOI: 10.4018/978-1-59904-885-7.ch181
Abstract
A supply chain is composed of all the stakeholders and processes involved in satisfying consumer demand: wholesaler, retailer, warehousing, transport and so on. A classic method to understand the internal workings of a supply chain is the much-used beer distribution game that came out of MIT during the sixties. In this game, each player takes on the role of one of the members of the chain (consumer, retailer, wholesaler and manufacturer). The aim is for each of them to coordinate their actions in such a way as to satisfy the demands of the upstream member of the chain at the least possible cost. Sterman (1989) provided evidence of an effect that had already been described by Forrester (1961) whereby initial consumer demand is distorted and amplified as it passes along the chain. This increment is known as the Forrester or Bullwhip effect.
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Chapter 9
Bullwhip Effect Performance of Supply Chains Under Statistical Process Control-Based Policy
Increase in order variability from the downstream stage to upstream in a supply chain.
Published in Chapter: Bullwhip Effect Performance of Supply Chains Under Statistical Process Control-Based Policy; From: Leadership Strategies for Global Supply Chain Management in Emerging Markets
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Chapter 193
Sentiment Analysis in Supply Chain Management
An observed trend of increasingly larger oscillations in inventory the further a firm is from consumers, in response to changes in consumer demand.
Published in Chapter: Sentiment Analysis in Supply Chain Management; From: Encyclopedia of Business Analytics and Optimization
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Chapter 213
Supply Chain Integration, Collaboration, and Coordination
An observed phenomenon in forecast-driven distribution channels. It refers to a trend of larger and larger swings in inventory in response to changes in demand, as one looks at firms further back in the supply chain for a product.
Published in Chapter: Supply Chain Integration, Collaboration, and Coordination; From: Encyclopedia of Business Analytics and Optimization
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Chapter 13
Supply Chain Relationships: From Conflict to Collaboration
Common in supply chains that rely on forecasts, this occurs when variability continually increases as one progress upstream in a supply chain from the customer to the raw materials suppliers due to orders that are exaggerated in order to provide buffer stock.
Published in Chapter: Supply Chain Relationships: From Conflict to Collaboration; From: Handbook of Research on Global Supply Chain Management
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Chapter 13
Defense Supply Chain Operations: Analytical Architectures for Enterprise Transformation
A system dynamics concept first explored by MIT Professor Jay Forrester in Industrial Dynamics (1961) AU8: The in-text citation "Industrial Dynamics (1961)" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. , the effect refers to the amplitude of a whip as it increases down its length: the further from the originating signal, the greater the distortion of the wave pattern. The phenomenon is also applied to supply chain concepts to explain increasing inventory swings in response to customer demand as one moves further up the supply chain.
Published in Chapter: Defense Supply Chain Operations: Analytical Architectures for Enterprise Transformation; From: Analytics, Operations, and Strategic Decision Making in the Public Sector
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Chapter 6
Controlling Bullwhip Effect in Supply Chain by BANDAI Co: Lessons From the Tamagotchi™ Case
A phenomenon in which upstream members of a supply chain might experience much more damage than the downstream members because of demand variation in the market. The term derives from the bullwhip whose tip moves much more than the handle.
Published in Chapter: Controlling Bullwhip Effect in Supply Chain by BANDAI Co: Lessons From the Tamagotchi™ Case; From: Frameworks and Cases on Evolutional Supply Chain
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Chapter 13
Retail Procurement Strategies in Disruptive Environments: Concepts and Best Practices
A supply chain phenomenon describing how small fluctuations in the retail demand results in progressively larger fluctuations in the upstream supply chain demand at the wholesale, distributor, manufacturer, and raw material supplier levels.
Published in Chapter: Retail Procurement Strategies in Disruptive Environments: Concepts and Best Practices; From: Digital Supply Chain, Disruptive Environments, and the Impact on Retailers
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Chapter 1
Strategic Perspectives of the Digital Supply Chain
A situation in which ineffective network effects occur because each successive node in the supply chain orders more supplies than the previous one based on wrong assumptions, a lack of communication and flawed planning processes.
Published in Chapter: Strategic Perspectives of the Digital Supply Chain; From: Technology Optimization and Change Management for Successful Digital Supply Chains
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Chapter 135
Prevalence of Bullwhip Effect in Hospitals
Represents the tendency for demand variability to increase, often considerably, as you move up the supply chain (from retailer, to distributor, to factory, to raw material suppliers, etc.).
Published in Chapter: Prevalence of Bullwhip Effect in Hospitals; From: Encyclopedia of Healthcare Information Systems
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