Bullwhip Effect in Supply Chains Harvard Case Solution & Analysis

A huge variety of orders throughout the supply chain can plague companies are trying to eliminate excess inventory, product demand forecast, and simply make their supply chain more efficient. What causes the bullwhip effect, which distorts, it is passed up the chain? The authors identify four main reasons: demand forecast updating to dosing, price fluctuations, and rationing and a shortage of games. The authors suggest several ways in which companies can counteract the bullwhip effect. First, to avoid multiple demand forecast updates. Companies can request data from the available downstream upstream. Or, they can bypass the downstream site by selling directly to consumers. In addition, they can increase the efficiency of the reduction is highly variable demand and the long-term recruitment. Second, the parties to violate the order. Companies can use EDI to reduce the cost of placing orders and place orders more frequently. And they can ship the product range in the truck to confront the high transport costs or use third-party logistics companies to handle the load. Third, price stabilization. Manufacturers can reduce the frequency and level of wholesale price discounting in order to prevent customers from stock. They can also use activity-based costing system to recognize when companies buy in bulk. Finally, deficits games, however. In deficit, suppliers can provide a product based on past sales records, not on orders, so customers do not exaggerate their orders. They can also eliminate their generous return policies, making it less likely for retailers to cancel orders. "Hide
by V. Padmanabhan, Seungjin Whang, Hau Lee Source: MIT Sloan Management Review 12 pages. Publication Date: April 1, 1997. Prod. #: SMR029-PDF-ENG

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