Bullwhip Effect Demand Variation and Amplification within Supply Chains

Ionel Elena-Simona () and Miron Alexandra-Dorina ()
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Ionel Elena-Simona: Bucharest University of Economic Studies, Bucharest, Romania
Miron Alexandra-Dorina: Bucharest University of Economic Studies, Bucharest, Romania

Proceedings of the International Conference on Business Excellence, 2023, vol. 17, issue 1, 246-253

Abstract: The consumers of the present, and especially those of the future, no longer expect products and services in themselves, but the maximization of the satisfaction they promise. In addition, today’s consumer has a complex consumption behavior, is increasingly well informed, knows what he wants to receive and reacts quite firmly if his expectations are not considered by suppliers. For these reasons, at the level of specialized literature but also at the level of business practice, an innovative business philosophy, called the bullwhip effect, according to which demand variation or amplification, is progressive augmentation or diminishing of the demand, has become increasingly interesting to study. That is ascendingly propagating within the supply chain driving order variation to grow exponentially from the final consumer to the raw material supplier. The main thematic axes analyzed during this paper concerned: supply chains growing complexity both as an effect and a cause of the asymmetries that are observed at the level of demand-offer equilibrium; relevant correlations and causal relationships identifiable between the determinants of the general or specific environment in which a company is operating and the optimization together with the efficiency of the activities developed by it can be anticipated by adopting various business models; how distorted demand is propagating within the supply chain; the bullwhip effect as an amplification phenomenon inside the supply chain. The authors of this paper opted for a combination of positivist-type research, prioritizing the main causes of the bullwhip effect, and a phenomenological-type research, during which the most robust of the correlations supporting the starting hypotheses were highlighted. Therefore, we believe that increased attention to minimizing the bullwhip effect within organizations will lead to improved performance of supply chains and, implicitly, of the companies involved. This remains an area of significant interest in scientific research as well as in the practice of commercial entities focused on increasing profits.

Keywords: new competitiveness; supply chain; bullwhip effect; demand-offer equilibrium; transaction costs; correlativities and causal relationships (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:poicbe:v:17:y:2023:i:1:p:246-253:n:35

DOI: 10.2478/picbe-2023-0026

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