ConceptsNest

The  bullwhip effect   is one of the most well-known supply chain concepts. Proctor & Gamble (P&G) coined the term when studying the demand fluctuations for Pampers, their disposable diapers. Despite the fact that babies use diapers at a very predictable rate and therefore retail demand is flat, P&G observed that this product created a wave of changes up the supply chain due to very minor changes in demand. Behavioural Causes The first theories focusing onto the bullwhip effect were mainly focusing on the irrational behavior of the human in the supply chain, highlighting them as the main cause of the bullwhip effect. Since the 90’s, the studies evolved, placing the supply chain’s mis-functioning at the heart of their studies abandoning the human factors. Previous control-theoretic models have identified the following causes:- 1)       The trade-off between stationary and dynamic performance , as well as, 2)       The use of independent controllers In accordance w