Files
markitect-main/examples/supply-chain-vsm/output/entities/bullwhip-effect.md
tegwick 574bb11db6 feat(example): add supply-chain-vsm composition demo (S3.5)
Demonstrates infospace composition: the Wealth of Nations infospace is
used as a discipline, applying Smith's economic framework as a lens to
analyse modern supply chain management concepts.

New example: examples/supply-chain-vsm/
- infospace.yaml binding WoN as discipline (../infospace-with-history)
- 3 source documents: coordination mechanisms, capital & inventory,
  market structure (~400 words each, original content)
- supply-chain-entity-schema-v1.0.md with WoN Concept required section
- won-mapping-schema-v1.0.md with Conceptual Continuity rating
- artifacts/won-reference/core-entities.md — 12 curated WoN entities
  for injection as discipline context
- 8 hand-crafted entity files demonstrating LLM output format
- 3 mapping files with full rationale and VSM inheritance chains
- Viable: YES (5/5 thresholds)

Key mappings demonstrated:
  Demand Signal          → Effectual Demand        (Strong, S2)
  Vendor-Managed Inventory → Division of Labour    (Strong, S1/S2)
  Just-in-Time Inventory → Circulating Capital     (Strong, S1/S3)
  Bullwhip Effect        → Natural Price           (Moderate, S2)
  Platform Intermediary  → Merchant Capital        (Strong, S2/S4)
  Monopsony Power        → Combination of Masters  (Strong, S3*)

Platform fix: entity_parser.py now recognises ## Supply Chain Domain
as a domain alias for ## Economic Domain, enabling composed infospaces
to use their own domain section name.

Tutorial §13 rewritten with real commands, real output, and the full
mapping table from the demo.

Co-Authored-By: Claude Sonnet 4.6 <noreply@anthropic.com>
2026-02-23 00:08:51 +01:00

1.3 KiB

Bullwhip Effect

Definition

The amplification of demand variability as signals travel upstream in a supply chain, such that small fluctuations at the retail level produce progressively larger swings in orders at distributor, manufacturer, and supplier levels. The amplification arises from batching, safety stock additions at each tier, and the use of lagged signals rather than real-time demand data. The result is a chain that oscillates between glut and shortage even when end-consumer demand is relatively stable.

Source

Coordination Mechanisms in Modern Supply Chains, §The Bullwhip Effect

Supply Chain Domain

Coordination

VSM Assignment

S2 — The bullwhip effect is a failure of S2 (the anti-oscillation coordination layer). A functioning S2 dampens variance; the bullwhip effect describes what happens when S2 is absent or degraded.

WoN Concept

Natural Price as Central Price — Smith describes market price as oscillating around natural price as a centre of gravity. The bullwhip effect is an analogous oscillation: orders oscillate around actual demand rather than converging to it, because the information infrastructure required for convergence (transparent, real-time demand signals) is missing.