Impact of Price-Sensitive Demand and Premium Payment Scheme on Bullwhip Effect

Bullwhip effect reduces the efficiency, responsiveness, and value of supply chain. There are some indirect causes like lead time, number echelons, direct bullwhip such as rationing or price variation. Due to capacity constraints, retailers forced experience their demands. Fear usually gives rise manipulable demand hence increases effect. Moreover, if retailer’s is sensitive then it will cause The offerings premium payment by due unfulfilled lure supplier extend his existing allocate them more supply. In this paper, an attempt has been made mitigate impact using a scheme. A technique coined that help in reducing increased chain on scheme proof reduction Results validated through numerical analysis.