Factors Affecting Bullwhip Effect: Indian Sectoral Study

Abstract

Amplification of demand, as we move up (from customer to supplier) in a supply chain, is considered as the bullwhip effect. It causes inefficiencies in the supply chain as the entire supply chain gets disturbed due to demand amplification. It results in either overproduction or shortage at each echelon present in the supply chain. Huge amount of research is available to mitigate the bullwhip effect in supply chain management. The reasons for the occurrence of bullwhip effect vary from sector to sector. Bullwhip effect has already been explored within the organisation as well as between the organisations. The present study examines the various factors that cause a bullwhip effect in 10 different Indian sectors. It has been found that the bullwhip effect varies from sector to sector, and the factors that are causing bullwhip effect also vary from sector to sector with a differently explained variability. Further, factor analysis is performed on selected sectors to see how these factors vary among the companies that are having bullwhip effect from those which are not having the bullwhip effect.

Keywords: Bullwhip Effect, Mitigation of Bullwhip Effect, Factor Affecting Bullwhip Effect, Supply Chain Management

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