On Replenishment Rules, Forecasting, and the Bullwhip Effect in Supply Chains

1. Modern supply chains Supply chains are networks of firms who pool their capabilities and resources in order to deliver value to the end consumer. Firms are no longer able to own or control complete supply chains. Information technology and modern logistics capabilities have created a global market where companies can take advantage of the opportunity to source internationally (IBM Business Consulting Services 2005). Companies have thus specialized and to “partnered” globally with other companies. These companies have then to increasingly focus on logistics and supply chain co-ordination. Such coordination is now an essential business process.