...Part 1. Report to Danny Wilco To: Danny Wilco From: Kay Smith Subject: Re: Ordering product for EBBD from the Kentucky Hooch and Beer Company Background: Our efforts to increase sales of Kentucky Swamp Brew, for our college aged customers, Brew received mixed support from area retailers. For example, our advertising campaign was initially productive, we received a 75% increase in retail orders for three continuous weeks (the duration of the advertising campaign). However, retail orders dropped off 20% when the advertising campaign ended. We appeared to have limited insight on customer interest in Kentucky Swamp Brew and we also failed to properly coordinate with the brewery so they can have supplies on hand to meet projected and actual retail orders. Strategy: For product ordering, I employed a three phase strategy. The first phase was to order more products from KHBC Brewery then current retail order level so we would have inventory on hand to support increased orders, when the advertising efforts took effect. The second phase was to order products based on increased retail order level while adjusting the final order to compensate for brewery delivery in efficiencies. The third phase, towards the end of the Kentucky Swamp Brew sales campaign was to adjust ordering so excess inventory would be controlled. Results: From the attached excel product you will see that our ordering strategy was effective as we were able to stay up with customer demands, compensate...
Words: 932 - Pages: 4
...A bullwhip consists of a handle section, a thong, a fall, and a cracker. A wrist loop may also be present, although its chief purpose is for hanging one's whip on a hook. Aesthetically, it finishes the handle. The main portion of the bullwhip's length is made up of a braided body or thong. Made of many strips of leather, the number of braids or plaits is an important factor in the construction of the whip. Often the thong is multi-layered, having one or more "bellies" in the center. Quality whips have at least two bellies, made of braided leather like the surface of the whip, though with fewer plaits. Lower-quality whips may have no bellies at all, and are sometimes stuffed with materials such as newspaper which will break down with use. Unlike in the Australian stock whip, the thong connects in line with the handle (rather than with a joint), or sometimes completely covers the handle. The handle is usually short, being between 8 and 12 inches long. While some whips have an exposed wooden grip, others have an intricately braided leather covered handle. Leather-covered handles usually contain a butt foundation, which is held in the palm of the hand when cracking, and can have a wrist loop, used for hanging the whip at the end of the day, not for putting around the wrist during use. Some handles swivel, making it easier to do certain types of unsophisticated cracks but making it harder to do others, or to use the whip for any type of accurate targeting. The Australians introduced...
Words: 857 - Pages: 4
...Flowers in the Attic Wendy Lupton ENG 225 Introduction to Film Jonathan Beller March 25, 2012 Flowers in the Attic Introduction The movie in this essay will be on the 1987 movie the Flowers in the Attic by Jeffrey Bloom. It is a movie where you will feel very suspenseful with all the drama that is happening to the children and what their mother does to stop it. Their grandmother treat’s them very awful when their mother is not home. Storytelling The story of the Flowers in the Attic is four children that fight to survive when slowly forgotten about by their mother played by Victoria Tennant. The mother of four children, who loses her husband and father of the kids, returns to her mother’s mysterious family mansion hoping to regain the love from her father to receive an inheritance. But when the children are imprisoned and abandoned by their evil grandmother, the children must find a way to survive a nightmare of brutal cruelty, forbidden passion and final shocking discovery that will shatter their innocence forever. The children consist of Chris, Cathy, and the two younger children, Cory and Carrie. Little do the children know, their mother has essentially given them over to their abusive, religiously-fanatical grandmother (played by Oscar winner Louise Fletcher), and they are locked away in the attic and kept there, while their health deteriorates and they are abused constantly. All the while, their evil mother conspires to receive the inheritance from her...
Words: 905 - Pages: 4
...Introductions of bullwhip effect According to Lee et al. (1997b) there is a phenomenon that the variance of orders may be larger than that of sales, and the distortion tends to increase as one moves upstream which is called bullwhip effect. It is a distortion in the sharing of information from downstream to upstream in the whole supply chain system; the effects can propagates the enterprise’s marketing, logistic and manufacture. Despite There are lots of factors 9 which could affect the efficiency of supply chain, like organization structure, channel of information, geographical distribution, industry characteristics etc., the bullwhip effect is still one of the most deep-rooted influence factor for the whole system. You cannot find another such kind of element like the bullwhip effect which could affect all parts of the whole supply chain system. No matter what kind of industry the firm are, what place does the firm in or how hard does the firm try by its own, the processes inside of the firm from producing plan to all kind of inventory must be all influenced by the bullwhip effect and hard to avoid. That is why the bullwhip effect is one of the most deep-rooted influence factor. QUESTION 1 (A) Discuss the term “bullwhip effect” and its causes. The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as you move further up the supply...
Words: 1610 - Pages: 7
...BUULLWHIP EFFECT BACKGROUND The bullwhip effect occurs when the demand is amplified in the supply chain as they move up in the channels of the supply chain of a firm. Distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies. Companies can effectively counteract the bullwhip effect by thoroughly understanding its underlying causes. Procter & Gamble (P&G) introduce this term. Logistics executives at Procter & Gamble (P&G) examined the order patterns for one of their best-selling products, Pampers. Its sales at retail stores were fluctuating, but the variabilities were certainly not excessive. However, as they examined the distributors' orders, the executives were surprised by the degree of variability. When they looked at P&G's orders of materials to their suppliers, they discovered that the swings were even greater. At first glance, the variability did not make sense. While the consumers, in this case, the babies, consumed diapers at a steady rate, the demand order variability in the supply chain were amplified as they moved up the supply chain. P&G called this phenomenon the "bullwhip" effect. (In some industries, it is known as the "whiplash" or the "whipsaw" effect.) Causes of the Bullwhip Effect Researchers found out that the factors which cause the bullwhip effect are the demand forecasting and amplification of oeders to the upper level of the supply chain. The best illustration of the bullwhip effect is the well known "beer...
Words: 1029 - Pages: 5
...Matthias Spleit (0966118) The Bullwhip Effect What is the bullwhip effect? The bullwhip effect is an observed phenomenon in supply chains and points out the magnification of demand fluctuations, especially when demand increases and decreases. The main reason for this phenomenon is a lack of demand information in the supply chains. FORRESTER was the first who mentioned the bullwhip effect in the literature.1 He studied the behaviour of dynamic systems in industrial organisations, by analysing different parameters like stock sizes, production rates and time delays and demonstrated the effects on these parameters, whenever modifications are applied. The outcome of his analysis was, that in a simple production- and distribution system, a small interruption or fluctuation in demand at the retail stage can cause a significantly stronger fluctuation in the whole system.2 These fluctuations have first been considered to be unavoidable and beyond the control of the respective companies. Forrester cleared up that misunderstanding on the basis of a four level dynamic system, showing the organisational structure of a production- and distribution system: Illustration: Bullwhip Effect3 1 2 Forrester, J. (1972), 21ff. Forrester, J. (1972), 22. 3 http://sinaslogisticsblog.blogspot.co.at/2010/04/bullwhip-effect.html (13.01.2015) 1 Matthias Spleit (0966118) There are four main operational factors that stimulate the bullwhip effect:4 1. fixed costs in production, ordering...
Words: 600 - Pages: 3
...What is the Bullwhip Effect? The bullwhip effect is the magnification of demand fluctuations, not the magnification of demand. The bullwhip effect is evident in a supply chain when demand increases and decreases. The effect is that these increases and decreases are exaggerated up the supply chain. The essence of the bullwhip effect is that orders to suppliers tend to have larger variance than sales to the buyer. The more chains in the supply chain the more complex this issue becomes. This distortion of demand is amplified the farther demand is passed up the supply chain. Proctor & Gamble coined the term “bullwhip effect” by studying the demand fluctuations for Pampers (disposable diapers). This is a classic example of a product with very little consumer demand fluctuation. P&G observed that distributor orders to the factory varied far more than the preceding retail demand. P & G orders to their material suppliers fluctuated even more. Babies use diapers at a very predictable rate, and retail sales resemble this fact. Information is readily available concerning the number of babies in all stages of diaper wearing. Even so P&G observed that this product with uniform demand created a wave of changes up the supply chain due to very minor changes in demand. EXPLAINATION OF THE BULLWHIP EFFECT The graphical representations above show the bullwhip effect between two supply chain partners. It can be seen that the Distributor orders to the factory experience demand fluctuate far...
Words: 1895 - Pages: 8
...companies and commercial. With the development, together with development of the information technology, among other factors, show up the possibility of supply chain managed, which is know as Supply Chain Management. It is very important to understand first the objectives of the Supply Chain Management therefore give a close up at the Bullwhip Effect and understand its causes and understand how to minimize it. 2. Bullwhip Effect Supply Chain coordination functions well as long as all stages of the chain take actions that together increase total supply chain profits. Each part of the chain should maintain its actions in a good relation to other participants and the supply chain in general and make decisions beneficial to the whole chain. If the coordination is weak or does not exist at all, a conflict of objectives appears among different participants, who try to maximize personal profits. Besides, all the relevant information for some reason can be unreachable to chain participants, or the information can get deformed in non-linear activities of some parts of chain which leads to irregular comprehension. All these lead to the so-called Bullwhip Effect resulting from information disorder within a supply chain. Different chain phases have different calculations of demand quantity, thus the longer the chain between the retailer and wholesaler the bigger the demand variation. It is possible to say...
Words: 1882 - Pages: 8
...9/27/2010 I. Product Availability The Bullwhip Effect does impact the supply chain performance measure of product availability, when the demand is overestimated due to BWE, there is an increase on the PA. When the demand is underestimated due to BWE, there is a decrease on the PA. Amplification (demand inflation) can increase service level at least on a temporary basis because there will be more supply produced to keep up with demand. Oscillation (demand variability) would usually lead to stock outs and hence reduced PA. Product availability can be measured by service level, and stock outs would lead to a decrease in PA and a decrease in customer satisfaction. Forecasting demand becomes increasingly difficult as the bullwhip effect is incurred, creating variability in the true demand downstream. This will impact the product availability because without understanding the true demand actual demand forecasts may be inflated or under forecasted depending on the nature of the bullwhip effect. This can also be seen when product rationing is in effect, the customers might inflate their order quantities to get a larger ration of product and thereby inflating demand even further. The sudden surge of orders during times of product rationing would create unrealistic demand projections. As the gap between the actual demand of product vs supply decreases the ‘phantom’ orders would start to disappear and the manufacturer is left with an overstock of inventory. II. Sharing Sales...
Words: 301 - Pages: 2
...Bullwhip Team Assignment Answer 1: Customer necessities are in continuous change, which are transmitted to the supplier as unstable demand. Along with this, a business has a very complex task to do, predict their replenishment orders (how much and when) to satisfy their clients. This prediction is based on the customer’s data from prior activity, the unstable demand, so are inaccurate. As we look futher from the customer, up the chain the demand increases (bullwhip effect) as a result the Inventory cost and the shipping and receiving cost, increases too. Increase in the Inventory Cost In order to handle unstable demand and no lost sales or even worst, customers; the replenishment orders increase the inventory, creating a safety stock that carries out cost, of products that are not being sold. In addition of the cost of using a warehouse (rent, insurance, etc.) space that is not being use or utilized more efficient (such as different products that might be in short inventory). Indeed materials here are in risk to be damaged for being stocked for a long period of time, or deteriorate, which will bring more cost. Even more, if we need to repackage or give a special price so the customer will acquire. The cost will increase also, if a new product comes out to replace one of the inventories, making it obsolete and more difficult to sell. Increase Shipping and Receiving Cost Here it is clear that when a replenishment order is being entered to the facilities, it has...
Words: 579 - Pages: 3
..."The Bullwhip Effect (or the Forrester Effect) is defined as the demand distortion that travels upstream in the supply chain due to the variance of orders which may be larger than that of sales, or the presence of too many echelons in the supply chain” (Knowledge Brief, N.d) The bullwhip effect can be caused a few ways; delivery delay, order batching, sales and price discounting and shortage gaming. Delivery delay is kind of self-explanatory. It is sometimes also called lead time basically during this time between the order and its delivery more and more orders are accruing though out the chain. Once all the orders are delivered it will seem statistically that sales increased. Order batching is when a company or customer waits to make an order until they have built up the need for a large order. This can also cause spikes in sales which will cause the bullwhip effect down the chain of supply. Sales and price discounting can cause the bullwhip effect due to the sudden increase in sales during a sale. Also immediately following a price discount, sales will drop off or customers will wait for another promotion before purchasing. Shortage gaming is when inventory of a product plummets and consumers buy more then they need due to fear of missing out or not being able to get the product later. As long as every link in the chain is communicating and working together the issues of the bullwhip effect can be minimized or fended off all together. Works Cited Knowledge Brief...
Words: 322 - Pages: 2
...The Bullwhip Effect The meaning of Bullwhip effect is not very clear when we hear just the word. But when studied the term very carefully, it provides information more about how the main manufacturer or a member of a supply chain deals with the demands of the customers by creating appropriate supplies for them. Bullwhip effect happens in two different scenarios; first, the company failed to predict the big flow of demands for their products and in turn, the demand of the customers are not met. Second, the company created more products because they had predicted that there will be more demand but in actual, the demand is very poor and in effect, the company have a lot of unsold supply stockage. When you researched in the internet about bullwhip effect, you can see various graphs of whips interweaving with each other in ascending fluctuations. That is so true. But to explain it clearly in words, bullwhip effects involves many companies that are linked together because they are suppliers/buyers of each others products because they need those products to create their whole big product. Example: Car manufacturing will purchase products from tire manufacturer, engine manufacturer, paint supplier, metals(alloy/steel/titanium) supplier, etc. If the car manufacturer needs to create 50 cars, the different suppliers (supply chain participants) will then provide the needed supplies. If by the end of the month, the company sold all the cars but the customers demands for 50...
Words: 429 - Pages: 2
...The Bullwhip Effect Market demand helps determine at what level to set production output for one particular good. When consumers demand more of a certain product, the retailers in turn will demand more of it from the wholesalers, which in turn causes an increase in demand from manufacturers as well. The market may have moved a little bit, but as the demand information travels up the supply chain, the upstream supplier may be seeing a much bigger swing. The lack of supply chain coordination leads to a phenomenon known as bullwhip effect (BWE), in which fluctuation increases as we move up the supply chain from the retailers to wholesalers to manufacturers to suppliers. The bullwhip effect distorts demand information within the supply chain, with each stage having a different estimate of what demand looks like (Sangwan & Sharma 2015:387). With distortions happening in bigger magnitude a negative impact on business performance will take place such as inventory disruption, quality control problems, cost of transportation, diminished customer service and increase cost of material and manpower. There are numerous factors which contribute to the bullwhip effect. Four major causes we could mention are price fluctuations and sales promotions, order batching, shortage gaming and forecast inaccuracies. Sales promotion and price discount result in customers buying in large quantities and stocking up and as a result the buying pattern doesn’t reflect the actual consumption. With...
Words: 454 - Pages: 2
...The bullwhip effect (or whiplash effect) is an observed phenomenon in forecast-driven distribution channels. It refers to a trend of larger and larger swings in inventory in response to changes in demand, as one looks at firms further back in the supply chain for a product. The concept first appeared in Jay Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester effect. Since the oscillating demand magnification upstream a supply chain is reminiscent of a cracking whip, it became known as the bullwhip. Because customer demand is rarely perfectly stable, businesses must forecast demand to properly position inventory and other resources. Forecasts are based on statistics, and they are rarely perfectly accurate. Because forecast errors are a given, companies often carry an inventory buffer called "safety stock". Moving up the supply chain from end-consumer to raw materials supplier, each supply chain participant has greater observed variation in demand and thus greater need for safety stock. In periods of rising demand, down-stream participants increase orders. In periods of falling demand, orders fall or stop, thereby not reducing inventory. The effect is that variations are amplified as one moves upstream in the supply chain (further from the customer). This sequence of events is well simulated by the Beer Distribution Game which was developed by MIT Sloan School of Management in the 1960s. The causes can further be divided into behavioral and operational...
Words: 790 - Pages: 4
...LOGISTICA: EL EFECTO BULLWHIP Jose A. Páramo http://www.youtube.com/watch?v=wLNdDSYqhNw En el video se puede observar perfectamente que es el efecto bullwhip, por el cual los miembros de una cadena de suministros que se encuentran alejados del consumidor perciben una demanda con mayor oscilación y estacionalidad mientras que el consumo real del producto es casi lineal. En este caso concreto vemos como por un hecho inesperado (lesión física que le impide salir de casa), el consumidor final de cerveza (Ben ) reduce su consumo(pasa a ser 0 durante esas semanas), lo que hace que el propietario del bar, ante este hecho, decida contactar con su proveedor para disminuir el volumen de los pedidos, pues dispone de reservas suficientes en su bar. Este hecho afecta directamente al proveedor, ya que aparece la incertidumbre de que va a hacer con todo el producto final que tiene en stock, y trae también como consecuencia la decisión de ajustar (reducir) la producción por parte de la fábrica de cerveza. Una vez Ben se recupera, decide celebrarlo, y para ello dobla su habitual consumo de cerveza, con lo que el dueño del bar, con la idea de satisfacer toda la demanda de su clientela contacta con su proveedor. El proveedor realiza varios pedidos a la fábrica de cerveza, la cual decide incrementar la producción hasta su máximo nivel. Con este ejemplo podemos observar como un pequeño cambio provocado por el consumidor final tiene un impacto de grandes dimensiones a lo largo...
Words: 471 - Pages: 2
