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The Bullwhip Effect In Supply Chain

Author

Listed:
  • Janusz Grabara

    (Czestochowa University of Technology)

  • Marta Starostka-Patyk

    (Czestochowa University of Technology)

Abstract

In a supply chain the variability of the orders received by the supplier can be greater than the demand variability. This phenomenon is named bullwhip effect. Some researchers are quantified the bullwhip by measuring the differences between observed variances in the different stages of the supply chain. The bullwhip effect refers to the phenomenon of amplification and distortion of demand in a supply chain. By eliminating or controlling this effect, it is possible to increase product profitability reducing useless costs such as stock-out and obsolescence costs. The bullwhip itself it is not a good index of the chain’s performance, because it does not consider the oscillations that occur in the inventories, which also may affect the supply chain performance.

Suggested Citation

  • Janusz Grabara & Marta Starostka-Patyk, 2009. "The Bullwhip Effect In Supply Chain," Advanced Logistic systems, University of Miskolc, Department of Material Handling and Logistics, vol. 3(1), pages 127-133, December.
    • Handle: RePEc:pcz:alspcz:v:3:y:2009:i:1:p:127-133
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    References listed on IDEAS

    as
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    5. Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
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