at 1:04 AM

Bullwhip/Whiplash Effect & The Factors Contributing to Bullwhip Effect

A Phenomenon in forecast driven distribution channels/ A problem in forecast driven supply chains.

In periods of rising demand, down stream participants will increase their orders. In periods of falling demand, orders will fall or stop in order to reduce inventory.

The effect is that; variations are amplified the farther one gets from the end-consumers.

Factors Contributing To Bullwhip Effect -

 

  • Forecast Errors
  • Reducing Uncertainties
  • Lead Time Variability
  • Variability & Lead Time
  • Batch Ordering
  • Price Fluctuations
  • Product Promotions
  • Inflated Orders
  • VMI
  • JIT
  • SP

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