ABSTRACT
In the late 1990s, research conducted by faculty at Stanford University and work done by manufacturers such as P&G led to the identification of an important aspect of supply chains, namely, the “bullwhip effect.” First observed in the case of baby diapers, the phenomenon was noted to exist in various other product supply chains as well where the downstream orders would tend to vary a lot more as they propagated upstream. 1 How can this effect be minimized in supply chains? Can supply chain partners work together to coordinate their actions? Are there contracts which can create win-win situations for firms?
