Bullwhip Effect in a Supply Chain

Abstract

An important phenomenon in supplychain management, known as the bullwhip effect, suggests that demand variabilityincreases as one moves up a supply chain. This paper gives a review of bullwhip effect, from its causes to its consequences and finally cures, which can dampen its negative effects. Part of its causes can be attributed to demand variability and the lack of communicating the actual demand between a supply chain partners. The other part is linked with obstacles to coordination in a supply chain.We suggest that orientation towards common management of information and application of managerial levers to achieve coordination, can limit the bullwhip effect and make asupply chain more profitable