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Bullwhip in a Spanish Shop

Author

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  • Lai, Richard

Abstract

Sebastian de la Fuente is the sixth largest supermarket chain in the Basque region of Spain. It has a novel dataset of 108,605 observations on 3,745 SKUs, collected for almost 2 1/2 years. I find the bullwhip effect in the data: at least 80% of the SKUs have a bigger variance in supplies than variance in sales. I also test six potential causes of the bullwhip, and report clear evidence for three: a rational cause (batching by the supermarket) and two behavioral ones (under-reaction to lags and coordination risks).

Suggested Citation

  • Lai, Richard, 2005. "Bullwhip in a Spanish Shop," MPRA Paper 4758, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:4758
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    File URL: https://mpra.ub.uni-muenchen.de/4758/1/MPRA_paper_4758.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Isaksson, Olov H.D. & Seifert, Ralf W., 2016. "Quantifying the bullwhip effect using two-echelon data: A cross-industry empirical investigation," International Journal of Production Economics, Elsevier, vol. 171(P3), pages 311-320.
    2. Wang, Xun & Disney, Stephen M., 2016. "The bullwhip effect: Progress, trends and directions," European Journal of Operational Research, Elsevier, vol. 250(3), pages 691-701.

    More about this item

    Keywords

    Bullwhip effect; retail; operations management; behavioral;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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