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Bullwhip in a Spanish Shop

Richard K. Lai
The Wharton School, Univ. of Pennsylvania

September 18, 2005

Harvard NOM Working Paper No. 06-06

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).

Keywords: Bullwhip effect, retail, operations management, behavioral

JEL Classifications: D24, D82, M11, E32

Working Paper Series

Date posted: September 20, 2005 ; Last revised: October 14, 2005

Suggested Citation

Lai, Richard K., Bullwhip in a Spanish Shop (September 18, 2005). Harvard NOM Working Paper No. 06-06. Available at SSRN: http://ssrn.com/abstract=804745

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Contact Information

Richard K. Lai (Contact Author)

The Wharton School, Univ. of Pennsylvania ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215 898 1630 (Phone)