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So Barilla lacks the material time to be able to respond quickly to a certain type of pasta that has been stock out with their production process. Another problem created by the bullwhip effect is that Barilla as well as its distributors need to carry tremendous amounts of inventory to match/respond to the demand swing, this has showed to be very costly.
One of the main causes ( first ) of the bullwhip effect in barilla’s case is poor forecasting. Their forecasting is based on the historical order of immediate customers since they are not able to see the sales of the pasta at the distribution stage...
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