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Supply Requirement (The key issues in supple chain (Distribution Strategy,…
Supply Requirement
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What is bullwhip effect?
It is a distribution channel phenomena in which forecasts yield supply chain efficiency. it refers to increasing swings in inventory in response to shift in customer demand as one moves further up the supply chain
Is is bad in logistics. Because the demand was not really correct and the producer will cause extra stock if the produce due to the bullwhip effect. When customer demand suddenly change a bit, the retailer will order more in order to fulfill, then the wholesaler will also demand for more to fulfill retailer. thus, the producer will produce more due to the demand change in wholesaler.