Reactions and additional comments: Per the textbook definition, the term bullwhip effect “Describes the distortions in a supply chain caused by changes in customer demand, resulting in large swings in inventory levels as the orders ripple upstream from the retailer to the distributor and manufacturer” (Wallace, 2020, p. 137).  The term is derived from physics. When cracking a whip, someone just has to snap their wrist and it causes a wave like effect that increases with a chain reaction.  The bullwhip effect is a term that was first used in the 1990s. The makers of Pampers had many changes in order volumes, when usually diapers were bought at a constant rate (The Bullwhip effect : History and solutions, 2021). This caused the company to receive hard hits in demand with each new order from the retailers. For example, during the Covid-19 pandemic, everyone was told to stay home, go to school from home, and work from home. This caused the need for many more computers and electronic devices so people can still get an education and make a living. Not only but the need to stay home constantly means you’re gonna get bored. Nowadays electronics are ways to stay entertained, meaning people were buying more video game consoles, computers, tablets, and many wireless devices. This rapid shift in demand caused a bullwhip effect within the semiconductor market since computer chips manufactures could barely keep up with the demand for chips to produce more electronics and keep the shelves stocked (The Bullwhip effect : History and solutions, 2021). Another example, also during the Covid-19 pandemic, was when the public was in a state of panic and everyone thought they wouldn’t have enough essentials to last during the lockdown for them to not have to leave the house during that scary time. The main essential that was demanded was toilet paper. The public was rushing to buy as much toilet paper as possible, this caused sell outs everywhere and for the stores to increase their demand for toilet paper to be stocked on the shelves. Because of the rapid change in demand of toilet paper, toilet paper manufactures everywhere increased their production to keep up with supply and demand. This state of toilet paper panic didn’t last very long and ended up causing a bullwhip effect (Bullwhip Effect: Example, causes, and impact on supply chain - Inbound logistics, 2023). There are many ways to prevent the bullwhip effect from happening. Manufactures can reduce delivery times and avoid products arriving later than needed or expected. This can in turn cause overstock for the retailers (Mooney, 2023). Next, increasing transparency between the customers and the suppliers can aid in preventing the bullwhip effect (Mooney, 2023). Knowing and learning why customers are buying an increased amount of products can help with staying up with trends and keeping the shelves stocked.

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Reactions and additional comments:

Per the textbook definition, the term bullwhip effect “Describes the distortions in a supply chain caused by changes in customer demand, resulting in large swings in inventory levels as the orders ripple upstream from the retailer to the distributor and manufacturer” (Wallace, 2020, p. 137).  The term is derived from physics. When cracking a whip, someone just has to snap their wrist and it causes a wave like effect that increases with a chain reaction.  The bullwhip effect is a term that was first used in the 1990s. The makers of Pampers had many changes in order volumes, when usually diapers were bought at a constant rate (The Bullwhip effect : History and solutions, 2021). This caused the company to receive hard hits in demand with each new order from the retailers. For example, during the Covid-19 pandemic, everyone was told to stay home, go to school from home, and work from home. This caused the need for many more computers and electronic devices so people can still get an education and make a living. Not only but the need to stay home constantly means you’re gonna get bored. Nowadays electronics are ways to stay entertained, meaning people were buying more video game consoles, computers, tablets, and many wireless devices. This rapid shift in demand caused a bullwhip effect within the semiconductor market since computer chips manufactures could barely keep up with the demand for chips to produce more electronics and keep the shelves stocked (The Bullwhip effect : History and solutions, 2021). Another example, also during the Covid-19 pandemic, was when the public was in a state of panic and everyone thought they wouldn’t have enough essentials to last during the lockdown for them to not have to leave the house during that scary time. The main essential that was demanded was toilet paper. The public was rushing to buy as much toilet paper as possible, this caused sell outs everywhere and for the stores to increase their demand for toilet paper to be stocked on the shelves. Because of the rapid change in demand of toilet paper, toilet paper manufactures everywhere increased their production to keep up with supply and demand. This state of toilet paper panic didn’t last very long and ended up causing a bullwhip effect (Bullwhip Effect: Example, causes, and impact on supply chain - Inbound logistics, 2023). There are many ways to prevent the bullwhip effect from happening. Manufactures can reduce delivery times and avoid products arriving later than needed or expected. This can in turn cause overstock for the retailers (Mooney, 2023). Next, increasing transparency between the customers and the suppliers can aid in preventing the bullwhip effect (Mooney, 2023). Knowing and learning why customers are buying an increased amount of products can help with staying up with trends and keeping the shelves stocked. 

 

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