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Bullwhip Effct

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Introductions of bullwhip effect
According to Lee et al. (1997b) there is a phenomenon that the variance of orders may be larger than that of sales, and the distortion tends to increase as one moves upstream which is called bullwhip effect. It is a distortion in the sharing of information from downstream to upstream in the whole supply chain system; the effects can propagates the enterprise’s marketing, logistic and manufacture. Despite There are lots of factors 9 which could affect the efficiency of supply chain, like organization structure, channel of information, geographical distribution, industry characteristics etc., the bullwhip effect is still one of the most deep-rooted influence factor for the whole system. You cannot find another such kind of element like the bullwhip effect which could affect all parts of the whole supply chain system. No matter what kind of industry the firm are, what place does the firm in or how hard does the firm try by its own, the processes inside of the firm from producing plan to all kind of inventory must be all influenced by the bullwhip effect and hard to avoid. That is why the bullwhip effect is one of the most deep-rooted influence factor.
QUESTION 1 (A) Discuss the term “bullwhip effect” and its causes.
The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as you move further up the supply chain. The concept first appeared in Jay Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester effect. The bullwhip effect was named for the way the amplitude of a whip increases down its length. The further from the originating signal, the greater the distortion of the wave pattern. (July 2013) The bullwhip effect on the supply chain occurs when changes in…...

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