Transnational Security Companies In Order To Weaken The Bullwhip Effect And Reduce Logistics Costs

This thesis aims to clarify the measures of avoiding Bullwhip effect by means of Vendor-managed Inventory and Logistics information system promotion.In the thesis, the author introduce the methods through explain and analyze the high sales costing happened in a foreign-funded enterprise.Definition of the bullwhip effect:The final customer places an order (whip) and order fluctuations build up upstream the supply chain. The Bullwhip Effect (or Whiplash Effect) is an observed phenomenon in forecast-driven distribution channels. The concept has its roots in J Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester Effect. Since the oscillating demand magnification upstream a supply chain reminds someone of a cracking whip it became famous as the Bullwhip Effect. Operational causes of Bullwhip effect occurrence are mostly due to dependent demand processing, Forecast Errors, adjustment of inventory, transaction motive, quantity discount, anticipation of shortages.Vendor-managed inventory (VMI) is a family of business models in which the buyer of a product provides certain information to a supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store). A third-party logistics provider can also be involved to make sure that the buyer has the required level of inventory by adjusting the demand and supply gaps.Of course, ERP is also the most important link of the improvement for companies'supply chain. Integration of logistics information can accelerate the whole efficiency.This thesis can help you to reduce the expenditure and upgrade your competition capability among same-industry companies.