Causes and consequences of bullwhip effect on the boutique industry of Dhaka city

Abstract

The phenomenon of the bullwhip effect (BWE) has become a pressing concern in contemporary supply chain management. Every echelon of the supply chain faces the negative consequences of BWE somehow. So, it is crucial to determine the reasons responsible for the BWE to mitigate the consequences. The boutique industry in Bangladesh is a rapidly growing industrial sector. In this study, we focused on finding the reasons and consequences of the bullwhip effect on the boutique industry in Dhaka city. The main targets of this study are to examine the underlying reasons for the BWE, identify the most significant causes from the perspective of Dhaka city, and determine the major consequences of the bullwhip effect. Studies of previous literature and consultation with experts have identified sixteen common causes behind the bullwhip effect. This study uses a survey-based method; respondents are chosen through clustered sampling. Necessary data have been collected with a semi-organized inquiry form. Among all the 16 causes, six causes are found to be the most significant causes from the perspective of retailers and wholesalers. SPSS Version 26 has been used for statistical analysis to make the final decision. We also found ten consequences commonly faced by these two echelons of the boutiques' supply chain because of the bullwhip effect. These are high inventory costs, workforce wastages and higher labor costs, higher replenishment lead-time, higher transportation costs, tension in the buyer-supplier relationship, product unavailability, loss of profit, poor customer service, etc.