Kulicke and Soffa Industries Supply Chain
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International Supply Chain GEST-S472Assignment 1[pic 1]Mamoun Touzani 3890781) Describe in your own words the causes of the bullwhip effect. Describe the process and the rational for each of these causes. One of the meanings of a good supply chain is the information flow between the different actors of the supply chain. The bullwhip effect refers to an unexpected distortion of a supply chain caused by repeated variation in demand. [pic 2]Source: [
The second one is the rationing game. It occurs when products demand exceeds supply manufacturers ration products or when customers exaggerate orders if they know inventory will be in short supply resulting in a cancellation of other orders. This overreaction will be explained in the 2nd question. This multiple or “phantom “ordering generates a false demand lead to Bullwhip Effect. The third one is order batching. Companies place orders in batches to avoid the cost of processing orders or to avoid the high transportation costs but it is disrupting supplier’s demand forecast. Finally, there is the price variation. Prices discounts impact positively customers’ demand. But the sudden surge of demand result on a mismatch between buying patterns and consumption pattern. Price fluctuation creates a boom-an-bust cycle aggravate the Bullwhip Effect. 2) Describe more in-depth the process and the rational of Hoarding and phantom ordering in the supply chain. What is causing this? Is this a behavioral process? Please explain in your own words Sterman’s view. Rational hoarding and phantom ordering are related to rationing and shortage gaming, which is one of the 4 causes of Bullwhip Effect listed below.