INVENTORY MANAGEMENT AND THE BULLWHIP EFFECT DURING THE 2007-2009 RECESSION: EVIDENCE FROM THE MANUFACTURING SECTOR

The 2007–2009 recession led to a significant decrease in consumer demand. We use monthly inventory and sales data to study the impact of the recession on manufacturers, wholesalers and retailers in the U.S. manufacturing sector. We find wholesalers responded late and drastically, indicative of a bul...

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Bibliographic Details
Published in:The journal of supply chain management 2010-01, Vol.46 (1), p.12-18
Main Authors: DOOLEY, KEVIN J., YAN, TINGTING, MOHAN, SRIMATHY, GOPALAKRISHNAN, MOHAN
Format: Article
Language:English
Subjects:
Analysis
Bankruptcy
bullwhip effect
Case studies
consumer behavior
demand variation
Economic aspects
economic crisis
Economic indicators
GDP
Gross Domestic Product
Impact analysis
Industry forecasts
Influence
Inventory
Inventory control
Inventory management
manufacturer
Manufacturers
Manufacturing
Manufacturing industry
manufacturing sector
Marketing research
National income and product accounts
NIPA
recession
Recessions
retailer
sales
Studies
supply chain management
Supply chains
United States
wholesaler
Wholesalers
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Summary:The 2007–2009 recession led to a significant decrease in consumer demand. We use monthly inventory and sales data to study the impact of the recession on manufacturers, wholesalers and retailers in the U.S. manufacturing sector. We find wholesalers responded late and drastically, indicative of a bullwhip effect, while retailers responded quickly and more conservatively, indicative of environmental smoothing. Smoothing of demand and inventory is demonstrated as an alternative response to a significant change in demand.
ISSN:1523-2409
1745-493X
DOI:10.1111/j.1745-493X.2009.03183.x