Bullwhip in a Spanish Shop
48 Pages Posted: 20 Sep 2005
Date Written: September 18, 2005
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: Suggested Citation