The bullwhip effect occurs when demand variability increases at each stage of the supply chain, despite relatively stable consumer demand. As orders move upstream, fluctuations in ordering patterns are amplified, making it difficult for suppliers to match production to customer needs. This summary effect is caused by factors like forecasting errors, batch ordering, promotions, and stockpiling during shortages. Companies can reduce bullwhip through strategies like quick response, everyday low pricing, lead time reduction, vendor-managed inventory, and risk pooling across locations.
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Bullwhip effect, whip effect, whip, supply chain, Haier Group , Bullwhip effect in Haier Group, Supply chain in Haier Group, Whip effect in Haier Group
Growing level of inventory, lack of communication, disorganization, delay in order decisions might just be a result of the dreaded ‘Bullwhip Effect’ in your supply chain.
But, what exactly is ‘bullwhip effect’?
View PPT for a clear idea and steps to avoid it!
Bullwhip Effect In Supply Chain - Haier GroupKrishna Raj
Bullwhip effect, whip effect, whip, supply chain, Haier Group , Bullwhip effect in Haier Group, Supply chain in Haier Group, Whip effect in Haier Group
Growing level of inventory, lack of communication, disorganization, delay in order decisions might just be a result of the dreaded ‘Bullwhip Effect’ in your supply chain.
But, what exactly is ‘bullwhip effect’?
View PPT for a clear idea and steps to avoid it!
A well explained presentation on one of the major Supply Chain challenges, The Bull-Whip Effect, outlining the major causes as well as the methods of coping with the Bull-Whip Effect.
Supply chains invariably demonstrate a demand-supply variability called the bull-whip effect - the effect increases in magnitude as we move farther away from the customer in the supply chain. Some of the causes and implications of the bull whip effect are discussed here.
A well explained presentation on one of the major Supply Chain challenges, The Bull-Whip Effect, outlining the major causes as well as the methods of coping with the Bull-Whip Effect.
Supply chains invariably demonstrate a demand-supply variability called the bull-whip effect - the effect increases in magnitude as we move farther away from the customer in the supply chain. Some of the causes and implications of the bull whip effect are discussed here.
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On October 31st, Julian Edge delivered this presentation at the 3rd National Symposium on Foreign Language Teacher Education and Development, Chengdu, China.
the presentation is about managing coordination between the supply chains for fast movement of resources.factors affecting the coordiantion in supply chain.
Defination : Inventories constitute an important component of a firms working capital .The various features of inventory are inventory as current asssets ,level of liquidity and liquidity lags .
Purpose : The purpose of holding inventoryis to achieve efficiency through cost reduction, increased sales volume ,to avail quantity discounts ,reduce risk of production stoppages ,reducing ordering costs and time .
Inventory Management techniques : 2 types :
1. Economic order quantity : it is the order quantity that minimisesthe total cost associated with inventory management .
2. 2. ABC system : A – items of high value but small in number
B – items of moderate value and size require reasonable attention
C - items of smaller value
Safety stock (also called buffer stock) is a term used by logisticians to describe a level of extra stock that is maintained to mitigate risk of stockouts due to uncertainties in supply and demand
Safety stock is an additional quantity of an item held in the inventory in order to reduce the risk that the item will be out of stock, safety stock act as a buffer stock in case the sales are greater than planned and or the supplier is unable to deliver the additional units at the expected time
Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...CIOWomenMagazine
This person is none other than Oprah Winfrey, a highly influential figure whose impact extends beyond television. This article will delve into the remarkable life and lasting legacy of Oprah. Her story serves as a reminder of the importance of perseverance, compassion, and firm determination.
Modern Database Management 12th Global Edition by Hoffer solution manual.docxssuserf63bd7
https://qidiantiku.com/solution-manual-for-modern-database-management-12th-global-edition-by-hoffer.shtml
name:Solution manual for Modern Database Management 12th Global Edition by Hoffer
Edition:12th Global Edition
author:by Hoffer
ISBN:ISBN 10: 0133544613 / ISBN 13: 9780133544619
type:solution manual
format:word/zip
All chapter include
Focusing on what leading database practitioners say are the most important aspects to database development, Modern Database Management presents sound pedagogy, and topics that are critical for the practical success of database professionals. The 12th Edition further facilitates learning with illustrations that clarify important concepts and new media resources that make some of the more challenging material more engaging. Also included are general updates and expanded material in the areas undergoing rapid change due to improved managerial practices, database design tools and methodologies, and database technology.
Artificial intelligence (AI) offers new opportunities to radically reinvent the way we do business. This study explores how CEOs and top decision makers around the world are responding to the transformative potential of AI.
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2. Bull-Whip Effect
Increase in Variability as we go up in the supply
Chain is called Bull-Whip Effect
• Customer demand for specific products does
not vary much, Inventory levels fluctuate
considerably across their supply chain
4. Effect of Order Variability
Increase in variability in the supply chain
5. Proctor & Gamble Case
• Disturbing and often inexplicable variations in
supply and ordering figures on diapers,
• Relatively stable demand from consumers
• Variability increased further when examining its
own orders to its suppliers.
6. Example:
• The Barilla company(Italy)a major pasta
producer
• Offered special discounts to customer who
ordered full truckload of goods
Results:
• Created highly peaked and volatile customer
demand-patterns
• The supply chain costs outstripped the
benefits from full truckload transportation.
7. Reasons for Bull-Whip Effect
1. Demand Forecasting
In almost all forecasts, estimates of mean and standard
deviation(variability) of customer demand get modified as
more and more data becomes available
8. • Increase in variability is magnified with increasing lead
time.
• Safety stock and base-stock levels have a lead time
component in their estimations.
• With longer lead times:
– a small change in the estimate of demand variability implies
a significant change in safety stock and base-stock level, which
implies
– significant changes in order quantities
– Which in turn leads to an increase in variability
2. Lead Time
9. 3. Batch Ordering
• If Retailer uses batch ordering, as with a (Q,R) policy
• Then Wholesaler observes a large order, followed by
several periods of no orders, followed by another
large order, and so on.
• Wholesaler sees a distorted and highly variable
pattern of orders.
• Firms use Batch Ordering because:
– Firms faced with fixed ordering costs need to apply
(Q,R)inventory policy which leads to batch ordering
– Transportation discounts with large orders
– Periodic sales quotas/incentives
10. 4. Price Fluctuations
• Retailers often attempt to stock up when prices
are lower.
– Accentuated by promotions and discounts at certain
times or for certain quantities.
– Such Forward Buying results in:
• Large order during the discounts
• Relatively small orders at other time periods
11. 5. Inflated Orders
• Inflated orders during shortage periods
• Common when retailers and distributors
suspect that a product will be in short supply
and therefore anticipate receiving supply
proportional to the amount ordered.
• After period of shortage, retailer goes back to
its standard orders
– leads to all kinds of distortions and variations in
demand estimates
12. Methods for Coping with the Bullwhip
1. Reducing uncertainty. Centralizing information
Quick Response Strategy
• Suppliers receive POS data from retailers
• Suppliers use this information to synchronize their
production and inventory activities with actual sales at the
retailer
Ex. Milliken & Company (a textile & chemicals company)
2. Reducing variability.
– Reducing variability inherent in the customer demand process.
– “Everyday low pricing” (EDLP) strategy.
– Ex. WALMART
13. Methods for Coping with the Bullwhip
3. Lead-time reduction
– Lead times magnify the increase in variability due to
demand forecasting.
– Two components of lead times:
• order lead times i.e time to produce & ship the item [can be
reduced through the use of cross-docking]
• Information lead times i.e time it takes to process an order [can be
reduced through the use of electronic data interchange (EDI).]
4. Strategic partnerships
– Vendor managed inventory (VMI)
• Manufacturer manages the inventory of its product at the retailer
outlet
• VMI the manufacturer does not rely on the orders placed by a
retailer, thus avoiding the bullwhip effect entirely.
Wal-Mart (buyer) and Procter & Gamble (supplier)
14. Risk Pooling
• A tool for reducing variability in Supply Chain
• It suggests that demand variability is reduced if
one aggregates demand across locations, as high
demand from one customer will be offset by low
demand from other
• Reduction in variability allows decrease in safety
stock and therefore reduces average inventory
15. Few Critical Points:
• Centralized Inventory reduces both safety stock
and average inventory in the system as there are
possibilities of reallocation of inventory from the
centralized warehouse from one market area of
having low demand to other having high demand
• Higher the coefficient of variation, greater the
benefit from centralized systems or risk pooling
• Benefit from risk pooling depends on behavior of
demand from one market relative to other. It
decreases if demand from both is showing very
high positive correlation
16. Centralized Vs. Decentralized Systems
Parameter Centralized Decentralized Remarks
Safety Stock Low High Amount of decrease
depends on coefficient of
variation & correlation
between demand from
different markets
Service Level (at same
total safety level
stock)
High Low Amount of increase
depends on coefficient of
variation & correlation
between demand from
different markets
Overhead Costs Low High* *due to low economies of
scale
Customer Lead Time High Low
Transportation Cost
Outbound
Inbound
High
Low
Low
High