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In order to reduce the bullwhip effect one should try to enhance the exchange of information regarding the product demand across the different entities involved in the supply chain.
In the ideal situation, the product manufacturer has a view over the products that are being sold at the stores.
The bullwhip effect is an observed phenomenon in forecast-driven distribution channels. It refers to a trend of larger and larger swings in inventory in response to changes in customer demand, as one looks at firms further back in the supply chain for a product.
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