Quantifying the bullwhip effect using two-echelon data: A cross-industry empirical investigation

Quantifying the bullwhip effect using two-echelon data: A cross-industry empirical investigation

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Article ID: iaor201530638
Volume: 171
Start Page Number: 311
End Page Number: 320
Publication Date: Jan 2016
Journal: International Journal of Production Economics
Authors: ,
Keywords: demand, statistics: empirical, financial
Abstract:

  • We empirically examine the magnitude and prevalence of the bullwhip effect using two‐echelon data.
  • A sample of 14,933 buyer–supplier dyad observations is created by drawing on a financial accounting standard.
  • The average amplification of demand variability between echelons is found to be 90%.
  • A significant bullwhip effect is found across industries and is supported by several robustness checks.
  • Size differences and sample selection bias are corrected for using propensity score matching.

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