Bullwhip effect.docVIP

 PAGE \* MERGEFORMAT 11 ‘Bullwhip’ effect Hewlett-Packard Company, where a major retailer, check the sales of printers and found that fluctuations in retail sales over time, and when they inspect the retailer’s order found that fluctuations of the order than the fluctuations of its sales even more significant. But also the surprise, the company supplies the printer production department to the Ministry of fluctuations in the order than the fluctuations in the former two are large. This is the so-called ‘bullwhip’ effect. ‘Bullwhip’ effect occurs because the demand information along the supply chain, passing up the process of being has been tampered with. Company’s products retailers distribution become a victim of inflated orders; turn it further exaggerates the supplier orders. ‘Bullwhip’ effect could lead to the supply chain resulting excess inventory. The study shows that the entire supply chain, from product left the manufacturer’s production line to its reach retailers shelves, the product of the average stock for more than 100 days. Is a distortion of demand information in the supply chain is a corresponding increase in each individual stock. The report estimates that in the United States alone more than 300 billion U.S. dollars deposited in the food supply chain, the situation in other industries are not comparable to mine. ‘Bullwhip’ effect has also led to poor production forecasts. In the absence of stock or can not deal with the backlog of orders in time, increasing the uncertainty of production plans, such as excessive revised scheme to increase the costs of remedial measures, overtime costs and speed up the transportation costs. In a typical consumer goods supply chain, even though no significant change in consumer demand, retailers and wholesalers will be issued by the greater fluctuations in orders, manufacturers and their suppliers received the order even volatility more. To understand the ‘bullwhip’ effect, companies must first figure out it