Bullwhip Effect – Do you really know your consumer?
I remember when I was first introduced to this term during a Supply Chain/Operations class at the University of Wisconsin - Madison . It sounded unusual. It makes you think - "What could be the relationship between bull whips and Ford car sales?". Wikipedia defines it as follows:"The Bullwhip Effect (or Whiplash Effect) is an observed phenomenon in forecast-driven distribution channels. The concept has its roots in J Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester Effect. Since the oscillating demand magnification upstream a supply chain reminds someone of a cracking whip it became famous as the Bullwhip Effect." Feel free to read the full article on Bullwhip Effect at this link . The article is well written and provides a good high level overview. In layman terms consider the following example. You are thinking about buying a Ford Mustang - more specifically you are looking for a " Red " Ford Mustang. You go to the on...