What is Bullwhip Effect in Retail? Explained

The bullwhip effect, a phenomenon in supply chain dynamics, illustrates the magnification of demand fluctuations as they travel up the supply chain. Triggered by small changes in consumer demand, the effect leads to larger and more erratic swings in orders along the supply chain. Contributing factors include delays in information transmission and inventory fluctuations. Mitigating the bullwhip effect requires enhanced communication and agile supply chain practices to ensure a more accurate and responsive adaptation to demand changes, preventing inefficiencies and unnecessary costs.