Table of contentsIntroductionCauses of the bullwhip effectCountermeasures to the bullwhip effectUnderstanding the bullwhip effect in supply chainsIntroduction An unmanaged supply chain is not inherently stable. Demand variability increases as one moves up the supply chain away from the retail customer, and small changes in consumer demand can lead to large variations in orders placed upstream. Ultimately, the network can oscillate in very large swings as each organization in the supply chain seeks to solve the problem from its own perspective. This phenomenon is known as the bullwhip effect and has been observed across most industries, leading to increased costs and poorer quality service. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Causes of the Bullwhip Effect Sources of variability can be demand variability, quality problems, strikes, factory fires, etc. The transmission of information throughout the supply chain and delays in manufacturing and shipping goods throughout the supply chain create the bullwhip effect. The following can all contribute to the bullwhip effect: Overreaction to delays; Negligence in placing an order for the purpose of reducing inventory; No communication up and down the supply chain. supply chainNo coordination up and down the supply chainDelay times for the flow of information and materialsOrder consolidation – larger orders result in more variation. Order consolidation occurs in an effort to reduce ordering costs, take advantage of transportation savings such as full truckload savings, and benefit from sales incentives. Promotions often result in forward purchases to further benefit from lower prices. Shortage game: Customers order more than they need during a shortage period, hoping that the partial shipments they receive will be sufficient. Demand forecast inaccuracies: Everyone in the chain adds a certain percentage to demand estimates. This results in a lack of visibility into true customer demand. Free return policies Somewhat different reasons for the increased bullwhip effect: Processing demand-induced signals; Non-zero lead time; Order consolidation; Supply deficits and failures; Price changes. Support is being spent by the reasons mentioned above for the most remarks on the remark to predict demand. This reason is most often re-examined using various methods and technologies, as well as models in order to predict the explanation of the influence of demand on the bullwhip effect and at the same time to manage the chain of 'supply. It is possible to deduce from the analysis of the factors contributing to the appearance of the bullwhip effect, to its understanding in general - this effect is the effect of poor circulation of information in the chain supply. Many tolerance possibilities are listed in the literature to reduce it. For example, three different options are possible, the use of which will reduce the usage in the supply chain or almost prevent the bullwhip effect: Changing the design of the physical process (e.g. reducing the main quantity time,.