Amongst others, the causes of the Bullwhip effect are known to be error in demand forecasting, order batching, price fluctuation, rationing and shortage gaming. Supply Chains function in a way analogous to control systems, wherein the information from the downstream (sales) acts as a feedback to the manufacturing processes upstream. It is empirically seen and complex simulation using mathematical models tend to indicate the effect can’t completely be done away with . However, the effect itself can be dampened by collaboration and effective sharing of real-time information. For supply chain mangers, the optimization problem of taming the bullwhip is indeed the dominating operations strategy for avoiding undesirable costs.
- "The McKinsey Quarterly." Building a Flexible Supply Chain for Uncertain times. N.p., n.d. Web. 12 Feb. 2013.
- Lee, Hau L., V. Padmanabhan, and Seungjin Whang. JSTOR. N.p., n.d. Web. 12 Feb. 2013
- "So Why Do We Call It a 'Supply Chain' Anyway?" IndustryWeek Home Page. N.p., n.d. Web. 12 Feb. 2013.