Existence and Causes of Bullwhip Effect: An Empirical Study on a Designer Footwear Supply Chain

Abstract

Bullwhip effect is one of the critical problems resulting in supply chain inefficiency. To alleviate the negative impacts brought by the bullwhip effect, it is important for the supply chain partners to develop collaboration to reduce lead time, facilitate information sharing, or execute vendor managed inventory strategy. This study focuses on a targeted designer footwear brand and statistically examines the existence and the causes of the bullwhip effect in the designer fashion supply chain. We collected 825 data including the real order quantity of each supply chain member, MOQ requirement, lead time, and heel heights, and conducted the empirical tests. Our findings show that the degree of bullwhip effect in our targeted brand is significantly correlated with the lead time and the shoe height only but not the minimum order quantity requested by the manufacturers. Managerial insights are also discussed.