Case 1 focuses on beer as an end item, for the consumer. And you have to become

Question

Case 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 get such information? When would you like to have it?

Explanation / Answer

The bullwhip effect is as a result of changes in inventory that are directly affected by levels of demand. One of the most common causes of the bullwhip effect results from errors in proper forecasting. This is one of the main reasons why companies invest so much time, money, and resources into creating accurate forecasts - to the most accurate extent possible. It reduces the chances for the bullwhip effect and maintains optimal inventory levels through each period based upon actual demand. Considering this, the absence of feedback can also be a main contributor to the bullwhip effect.

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