// definition
Bullwhip effect
Order amplification along a supply chain
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Short definition
A mechanism through which orders sent to suppliers fluctuate more than downstream demand. Forecast revisions and inventory adjustments can amplify changes at several stages. The scale depends on lead times, contracts and ordering practices; a destocking simulation does not estimate a coefficient for an actual industry.
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Primary sources
- Rees and Rungcharoenkitkul, BIS Bulletin 48, 11 November 2021Printed page 3: shortage expectations and precautionary buffers at several stages. A mechanism discussed by the authors, without a coefficient transferred to AI.