Bullwhip in a Spanish Shop

48 Pages Posted: 20 Sep 2005

See all articles by Richard K. Lai

Richard K. Lai

The Wharton School, Univ. of Pennsylvania

Date Written: September 18, 2005

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 Classification: D24, D82, M11, E32

Suggested Citation

Lai, Richard K., Bullwhip in a Spanish Shop (September 18, 2005). Harvard NOM Working Paper No. 06-06. Available at SSRN: https://ssrn.com/abstract=804745 or http://dx.doi.org/10.2139/ssrn.804745

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)

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