Buy custom What Is Bullwhip Effect?
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| Topic: |
Business
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| Number of pages / Number of words: |
5 / 1142 |
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However when demand cools down the company faces more than normal order cancellations and returns. This causes a fluctuation in order stock and adds to the effect. Companies and individuals often guess the demand of any product, which is known as “gamingâ€. When doing this if they predict or anticipate that the product will be short in coming future the companies will place multiple orders with suppliers and as soon as one supplier fulfills their order they usually cancel with all others...
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This action adds a big variability in demand and supply in the supply chain leaving some hugely overstocked with products.
Techniques to reduce or eliminate Bullwhip effect
Now that this effect is recognized there are measures taken to minimize the bullwhip effect. Understanding the causes has given an insight into the problem and thus many companies have adopted innovative programs to address the effect to some extent...
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