Price fluctuation:

Price fluctuation is a major reason for Bullwhip effect. It is driven by price discounts, quantity or volume discounts, coupons, and rebates provided by supply chain partners. These cause swings in demand, resulting into high throughout low price periods and low during normal price periods. The problems involve overtime and idle production time, premium freight charges, and inventory accumulations. To counter this cause, the possible approaches are:

• ignore price discounting and volume discounting, and
• Following a same day low prices.