The Bullwhip Effect Under Different Supply Chain Structures

This research attempts to determine the relative contribution of each of the causes of the bullwhip effect and to identify which causes of the bullwhip effect have relatively significant impacts on the variability of orders under different supply chain structures. When there are three or more levels of echelons in a supply chain, demand forecast updating is the most significant factor for the bullwhip effect. When there are two levels of echelons in a supply chain, however, price variation is the most significant one. This implies that, when there are three or more levels of echelons in a supply chain, supply chain managers need to share actual demand information and coordinate production and distribution activities with their partners. When there are only two levels of echelons, agility or market responsiveness would be a key to mitigate the bullwhip effect