Prevalence of Bullwhip Effect in Hospitals

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Author(s): Kannan Sethuraman (Melbourne Business School, Australia)and Devanath Tirupati (Indian Institute of Management, India)
Copyright: 2008
Pages: 8
Source title: Encyclopedia of Healthcare Information Systems
Source Author(s)/Editor(s): Nilmini Wickramasinghe (Illinois Institute of Technology, USA)and Eliezer Geisler (Illinois Institute of Technology, USA)
DOI: 10.4018/978-1-59904-889-5.ch135

Keywords: Health Information Systems / Medical Information Science Reference / Medicine & Healthcare

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Abstract

Lee, et al. (1997b) state the impact of increased volatility as, “Distorted information from one end of the supply chain to the other can lead to excessive inventory investment, poor customer service, lost revenues, ineffective transportation, and missed production schedules.” Although there is a growing body of research on managing the bullwhip effect in manufacturingbased supply chains (Baganha & Cohen, 1998; Chen, Drezner, Ryan & Simchi-Levi, 2000; Chen, Ryan & Simchi-Levi, 1997; Metter, 1997), little research exists on its presence in service chains, and we are unaware of any reported research on this subject. In this chapter, we present several examples of distorted information in hospitals resulting in variability amplification and causing inefficiencies similar to the bullwhip effect. We highlight the underlying causes for this phenomenon and propose actions that can mitigate the detrimental impact of this distortion.

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Prevalence of Bullwhip Effect in Hospitals

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