The Bullwhip Effect and the EBBD Simulation
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Question 1:
Focuses on beer as an end item, for the consumer. And you have to become familiar with part of the supply chain with you as a wholesaler. You will also experience the Bull-Whip Effect as you practice in the EBBD simulation. Consider the idea of feedback within a system. Feedback as some form of information that is used to make decisions about controlling rates of flow.
How does feedback, or the absence of it, help to create the bull-whip effect? What feedback would you like to have, specifically, as you determine your weekly orders for Kentucky Swamp Brew? How would you get such information? When would you like to have it?
Question 2:
The EBBD Simulation is intended to help you learn about the Bull-whip effect as you experience what it is like to be responsible for ordering a product to distribute to your customers.
Comment on this simulation. Did it help you learn? What did you like about it, not like? What are some ideas you have for making the simulation better?
Would you like to also play the role of one of the retail customers, ordering beer to stock in your store and having to deal with not getting your orders from EBBD on time?
Any other ideas or comments?
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Solution Summary
The expert examines the Bullwhip effects and the EBBD simulations. The role of retail therapy is determined. The solution is answered in 655 words.
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Question 1
The bullwhip effect is a problem caused by inaccurate forecasts made throughout the supply chain. When one supplier in the supply chain makes a forecast, the next supplier upstream relies on that forecast to make its own forecast. This string of forecasts creates a bullwhip-like effect where the quantities ordered start swinging wildly. Ultimately, this affects whether each supplier or customer would be able to receive the required quantities needed to fulfill orders.
Fluctuating levels of demand can lead to changes in inventory which in turn lead to the need to change the amounts ordered. A typical reason for the bullwhip effect is that errors in forecasting are amplified through the supply chain. By investing more effort and resources into forecasting accurately, a company can decrease the probability of having to deal with the bullwhip effect, and instead have optimal inventory levels that are based on accurate demand forecasts.
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Education
- MSc, California State Polytechnic University, Pomona
- MBA, University of California, Riverside
- BSc, California State Polytechnic University, Pomona
- BSc, California State Polytechnic University, Pomona
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