Unformatted text preview: manufacturing and replenishing. It amplifies the demand fluctuation from the customer to upstream stages exponentially through the supply chain, and hurts the performance of the supply chain. • Forecasting error. In the process of the Bullwhip Effect, the demand forecast is not made based on the true demand data, but is made by each stage of the supply chain based on the downstream entity’s records. CAT: Caterpillar used EDI with all its suppliers. This makes the communication fast and easy. By sharing the demand information with supplier, Caterpillar gets the best price. We also use VMI to have an effective supply chain. The supplier overseas have to setup a VMI, this makes the cost comparison between local supplier and overseas supplier easy....
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- Spring '10
- Supply Chain Management, Operational eff