Concept on Bullwhip Effect

BULLWHIP EFFECT

The problem frequently observed in unmanaged supply chains is the bullwhip effect. It can be described as a series of event that leads to supplier demand variability up the supply chain. The reasons for this variability include the frequency of orders, varying quantities ordered, or the combination both of event by downstream partners in a supply chain. As the orders make their way upstream, the perceived demand and is amplified and produces what is known as the bullwhip effect. The bullwhip effect has been perceived as an unavoidable effect of demand variation.