Bullwhip Effect Simulation

The Bullwhip Effect occurs when small changes in customer demand cause progressively larger fluctuations in orders and inventory levels up the supply chain. Imagine a simple scenario: a slight increase in customer sales leads retailers to order more stock, which then prompts wholesalers and manufacturers to increase their orders even more. This amplification causes periods of excess inventory followed by shortages, leading to inefficiencies. Simulation of this effect models how these demand variations ripple through the supply chain, helping companies understand and manage the impact of demand fluctuations more effectively, reducing waste and improving responsiveness.