Question

Define the bullwhip effect and discuss its impact on the measures of supply chain performance.  

From COURSE: Reg Compliance Logistics Mgrs

Answer 1

BULLWHIP EFFECT:It is a phenomena which includes distribution channel in which forecasted demand yield inefficiency of supply chain management. It also defines increasing trend in inventory in comparison or response to change in demand of consumer as one change or move increase up the supply chain.

  

The Impact of Bullwhip effect on the measures of Supply Chain Performance are listed below which are as follows:

1. INVESTMENT OF INVENTORY/STOCK IN EXCESS

2. CUSTOMER SERVICE IS POOR OR INEFFICIENT.

3. REVENUE ARE LOST/FOREGONE

4. TRANSPORTATION INEFFECTIVENESS

5. SCHEDULE OF PRODUCTION ARE MISSED AND FORGOTTEN.

6. CAPACITY PLANS ARE MISGUIDED.