Please enable JavaScript.
Coggle requires JavaScript to display documents.
SUPPLY REQUIREMENT (Key Issues in SC (Distribution Strategy, Product…
SUPPLY REQUIREMENT
-
Bullwhip Effect
Definition
The bullwhip effect (also known as demand amplification, whip-saw, whiplash effect, or Forrester effect) refers to the phenomenon of demand variability amplification as moving up in the supply chain: from the point of actual (final) demand to the point of origin.[
It means that variability at the "end" of supply chain (closer to consumption, e. g. retailer) is much less, than at the other "end", where it begins (far from consumer, e. g. producer or supplier).
The bullwhip effect on the supply chain occurs when changes in consumer demand causes the companies in a supply chain to order more goods to meet the new demand. The bullwhip effect usually flows up the supply chain, starting with the retailer, wholesaler, distributor, manufacturer and then the raw materials supplier. This effect can be observed through most supply chains across several industries; it occurs because the demand for goods is based on demand forecasts from companies, rather than actual consumer demand.
-
Drivers of Risk in SC
-
-
-
Forecast
Inaccurate Forecasts Due to Long Lead Times, Seasonality, Product Variety, Short Life-Cycle
-