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Symptoms of the Bullwhip Effect
•Excessive Inventory
•Poor Forecasts
•Insufficient and/or excessive capacities
•Unavailable Products
•Long Backlogs
•Costs for Expedited
•Shipments and Overtime




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Structure Drives Behavior:
Causes of the Bullwhip Effect
•Lack of visibility
•Long lead time
•Many stages in the supply chain
•Lack of pull signals
•Order batching
•Price discount and promotions
•Forward buying
•Rationing

Other Behaviors that Cause the Bullwhip Effect
•Over-reaction to backlogs
•Neglecting to order to reduce inventory
•Hoarding customers
•Shortage gaming for customers
•Demand forecast inaccuracies
•Attempts to meet end-of-month metrics

Ways to Mitigate the Bullwhip Effect
•Reduce lead times
•Use/sharing of POS data
•Smaller orders
–Work with suppliers on more frequent deliveries of smaller order increments
•Use stable pricing, “everyday low prices”
–Levels out customer demand
•Allocation based on past sales
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