The bullwhip effect describes how variation in demand and orders increases as you move up the supply chain from customers to suppliers. It occurs as a result of inaccurate demand forecasts, hoarding and rationing behavior, batch ordering policies, price variations, and is inherent in supply chain systems with long lead times. Potential remedies include reducing uncertainty and variability, shortening lead times, strategic partnerships, and advanced IT.

1. Bullwhip Effect
Presented by-
ANKIT WALIA

2. Evolution of Supply Chain

4. Bullwhip Effect
• Amplification of variation as we move
towards the upstream side of the supply
chain is called a Bullwhip Effect or
Whiplash Effect.
• Variation of stocks and orders increases
up the supply chain from customer to
supplier.
• The longer lead times of information and
material are, the stronger the effect is.

5. Amount Of Order Variability

6. Major reasons for the Bullwhip
Effect
1. The inaccurate forecasts of demand called
“demand signal processing”.
2. “Hoardings and rationing game”.
3. The ordering policy used by retailers called
“order batching”.
4. Discounts and seasonal price variations
5. It is inherent in the System

7. Possible Remedies
1. Reducing Uncertainty
2. Reducing Variability
3. Lead Time Reduction
4. Strategic Partnering and Buying
5. Advanced Information Technology

8. Conclusion

9. THANK YOU
08/12/14 9

10. QUESTIONS???