The bullwhip effect is a phenomenon of demand variation and amplification in the supply chain. It means that when the information flow is transmitted from the final client to the original supplier, the sharing of information cannot be effectively realized, which makes the phenomenon of information distortion amplify step by step, leading to greater and greater fluctuations in demand information.
The bullwhip effect belongs to the situation where Retailer A estimates an order quantity based on the sales volume of the previous month. In order to ensure that the order quantity is available in time, he submits the order to wholesaler B after slightly increasing the order quantity. And B places an order from a merchandise sales center for the same consideration.