Bullwhip effects refers to the lack of stability resulting in fluctuations in product and supplier orders in different stages of the supply chain. According to Disney Lambrecht (2008), growing customer demand has a direct impact on business inventory. As a result, business organizations management always attempts to forecast demand and allocate the required raw materials and resources so as to meet the demand from the customers in an efficient and timely manner (Disney Lambrecht, 2008). There are various factors known to be the causes of the bullwhip effect which include but are not limited to: lead time variables such as manufacturing time delay and the information sharing during shipping. Managers involved in the management of the supply chain can cause this effect as well. This paper explores the impact of bullwhip effect with a focus on ETSY organizationBottom of Form.

ETSY is an E-commerce platform that is focused on creating a market for various products to enable customers to get these products online (ETSY, n.d)Bottom of Form. For ETSY, the bullwhip effect is likely to result in understocking or overstocking depending on the forecast. Factors contributing to the bullwhip effect can enable the managers forecast low demand leading to less inventory compared to the demand for a product or service (Carranza Villegas, 2006). Consequently, when this happens, the ordering time for the clients is extended and this is likely to result in their dissatisfaction. When overstocking happens because of forecasting high demand and the actual demand experienced is low, the organization is likely to suffer increased cost of inventory as many products will have to be stored in the organization inventory.

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The main advantage associated with the bullwhip effect as noted by Carranza Villegas (2006) is the fact that managers are able to use the understanding of this effect to effectively forecast the demand of their products. This anticipation, in return, enables supply chain manager to develop a safe stock that will enable them to take care of the increased demand in the market. There are numerous disadvantages associated with this effect, and they include: waste, changing the buying patterns, and dissatisfied customers; in some instance, companies are even likely to lose market as a result of the bullwhip effect. Losing market share mainly results from customer dissatisfaction, and there are other alternatives sources where they can get their products from (Carranza Villegas, 2006).