THE OPTIMAL ROLE OF OPTIMAL INVENTORY IN SUPPLY CHAINS AND BUSINESS

The Bullwhip Effect Increasing Variability of Order Sizes in the Supply Chain

The Bullwhip Effect is a reference to the propagating and increase of order sizes in supply chains as orders move wholesalers to retailers to consumers. As order sizes increase, inventory levels increase accordingly. from suppliers to manufacturers to

8000.00

Consumer Demand Retail to Wholesale Wholesale to MFG. Mfg. to Supplier

7000.00

6000.00

5000.00

4000.00

3000.00

2000.00 Order Quantity

1000.00

0.00

1000.00

Jul-95

Jul-96

Jul-97

Jan-96

Jan-97

Jan-95

Mar-95

Mar-96

Mar-97

Sep-95

Nov-95

Sep-96

Nov-96

Sep-97

Nov-97

May-95

May-96

May-97

Period

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