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The bullwhip effect
AOL
Created on August 24, 2023
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Transcript
The Bullwhip Effect
The Bullwhip Effect describes how small customer demand fluctuations amplify oscillations throughout the supply chain.
It arises due to demand variations, ordering practices, promotions, lead times, and communication failures within the supply chain.
In the '80s, P&G experienced amplified Pampers diaper order oscillations, even though consumer demand was stable.
It can lead to excessive inventories, stock shortages, increased costs, low capacity utilization, and customer service issues.