An empirical study on "bullwhip effect" in the supply chain — Based on the statistical data from manufacturing industry of China

The bullwhip effect is the phenomenon of increasing demand variability in the supply chain as one moves from downstream echelons (retail) to upstream echelons (manufacturing). That is the volatility of the supplier's order (variance) is greater than the customer's demand (variance). Based on the data from Wind, from the perspective of the industry, we try to document the intensity and trend of the bullwhip effect in the manufacturing industry of China by empirical study method. We find that the bullwhip effect is not often observed in industry level data. This is indeed good news for firms and their suppliers.