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SUPPLY REQUIREMENT (Key issues in supply chain (Configuration of…
SUPPLY REQUIREMENT
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Bullwhip Effect
Its a distribution channel phenomena in which forecast yield supply chain efficiency. It also refers to increasing swings in inventory in response to shift in customer demand as one moves further up the supply chain.
It also has disadvantages 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.