Procter & Gamble (P & amp； G) When studying the market demand of "diapers", it is found that the retail volume of this product is quite stable with little fluctuation. However, when investigating the orders in the distribution center, it was found that the volatility increased obviously. The distribution center said that they placed orders according to the needs of aggregated sellers. After further research, Procter & Gamble found that retailers often set an objective order quantity based on the prediction of historical sales and actual sales. However, in order to ensure that this order quantity can be put in place in time and adapt to the incremental changes of customer demand, they usually increase the forecast order quantity and order from wholesalers. In the same way, wholesalers will also add a certain increment to the sales center on the basis of summarizing the order quantity of retailers. In this way, although there is no big fluctuation in customer demand, the order quantity has been amplified by retailers and wholesalers.
In the process of supply chain operation, many manufacturing enterprises often find that the customer demand of this commodity is relatively stable and has little change, but the upstream suppliers often maintain a higher inventory level than the downstream suppliers. As the demand moves upstream in the supply chain, the demand fluctuates more and more, which is the "bullwhip effect" in the supply chain.