The Bullwhip Effect Assignment Example | Topics and Well Written Essays - 1500 words

The Bullwhip Effect - Assignment ExampleThe Bullwhip Effect is of large(p) concern because it can lead to depression profits, increased costs, poor use of transport and storage facilities, inefficiency in the use of limited resources and even crisis in placing orders. All these reasons explain why this is a great area of interest (Bhattacharya & Bandyopadhyay, 2011). It is also a significant area that should be studied in order to increase efficiency in how enterprises carry their twenty-four hour period to day activities. I am also interested in this topic because I would like to contribute to its solution. Moreover, an aspect of academic curiosity sparked my interest in the topic.The research conducted shows a number of similarities with what I learned in the Module. For instance, the definition of the Bullwhip Effect tends to be the same. Even the environment and circumstances in which it occurs is very similar. For both, the phenomenon occurs in a supply chain where there are m embers placing orders to each subsequent member in the upstream. In both, the fact that Bullwhip Effect results in an increased or exaggerated variability in the upstream end more than the downstream is recognized. The Bullwhip effect arises as a result of various factors. Some of the causes are ration and shortage gaming, price fluctuations, demand forecast, updating and order batching. These causes coupled up with the managers decisions, most of which are rational, lead to the Bullwhip Effect. Forecasts made based on information from the member down the stream lead to amplification of demand. Dependence on these downstream pieces of information to plan for inventory often misleads. As such, some(prenominal) upstream members end up having a greater variability of demand (Lee et al., 2014). Another cause is the frequent change in prices in the market. Sometimes the manufacturers overcome the prices of their products. This makes more suppliers in the downstream end to do forward bu ying. This is in a