The bullwhip effect

1. Definition:

"It is a phenomenon observed in forecast driven supply chain and describes that the variation in demand increases up the supply chain from consumer to supplier." [http://www.scribd.com/doc/17392509/Bullwhip-Effect]

-> the more steps that are in between of the consumer and the supplier, the bigger the variation gets

[http://www.scribd.com/doc/17392509/Bullwhip-Effect]

[http://maja.uni-mb.si/files/apem/APEM3-1_045-055.pdf]

Therefore it can be said that the bullwhip effect is an inefficiency of the supply chain and small changes in customer demand can result in large swings in orders placed upstream.