Study On Control Policy Of Bullwhip Effect In Supply Chain

Firms have been gradually regarding the competition as part of a supply chain against other supply chains, rather than as a single firm against other individual firms since the 1980s. It brings much new hard work for the supply chain management. Supply chain management has been the most important subject all over the world. The bullwhip effect takes place when the members of a supply chain try to coordinate the relation between supply and demand. It is identified by the phenomenon that the variability of demand is largely increasing while orders are sent from the downside to the upside in a supply chain.Bullwhip effect makes the level of the storage of enterprise's production higher, and the level of service lower. Then the whole cost of supply chain will be made too high. All these will make the enterprises in supply chain less competitive. At last, every member in the supply chain will sustain losses. Therefore reducing the bad influence of bullwhip effect is a new measure to improve the efficiency of supply chain management and gain preponderance in market competition. It will bring the supply chain more acumen, reduce the cost of the supply chain, and shorten the time of supply and so on.