International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online)

Revisiting the Bullwhip Effect under Economic Uncertainty
Khalid Al-Akhal

For the past decade, economic uncertainties were the only certainty. At the breakout of the global financial crisis, sales managers at the air conditioning industry noticed two strange distortions in the supply chain. At the downstream, factories were increasing their levels of inventories of specific raw materials mainly copper pipes and power cables whereas at the upper stream the distribution channels were logically making lower orders of the finished products compared to the actual market demands. This paper aims at analyzing some of the situational factors that lead to these two types of distortions. In doing so, it also proposes that the model of the Bullwhip Effect (BWE) will have an inverse shape under economic uncertainty compared to the conventional shape reported in supply chain traditional literature. Despite the fact that a number of BWE distortions were reported by several scholars, the phenomenon has never been studied under the special situational factors during an economic uncertainty.

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