The Strategy of Bullwhip Effect Minimization in Livestock Feed Supply Chain

Joanna Nowakowska-Grunt () and Robert Sa³ek ()
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Joanna Nowakowska-Grunt: Czestochowa University of Technology
Robert Sa³ek: Czestochowa University of Technology

from Óbuda University, Keleti Faculty of Business and Management

Abstract: The studies in the literature that have analysed distorted information in supply chains reported the presence of the Forrester effect, or the bullwhip effect. In the systems theory, this phenomenon is termed the butterfly effect. Regardless of its name, the effect causes that small disturbance in initial conditions causes significant disturbances in operation of the whole system through system amplification and feedback. In the logistics chain, this effect manifests itself in the transfer of the amplified changes in the demand towards the initial part of the chain. This mechanism results from a marketing approach to the customer's need and the highest possible level of customer service and striving for rational business activities in the enterprises in individual cells of the logistics chain. Readiness of individual links in the chain for meeting the expectations of the recipients causes that each entity attempts to collect the amount of product equal to individual sales plus a specific reserve in case of unexpected fluctuations in supply.

Keywords: enterprise strategy; management of supply chain; logistics management (search for similar items in EconPapers)
Date: 2014
ISBN: 9786155460067
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Persistent link: https://EconPapers.repec.org/RePEc:pkk:meb014:327-336

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