The goal of supply chain management is to provide a high-speed flow of relevant, high-quality information that enables suppliers to provide customers with a flow of materials uninterrupted and precisely timed. However, unplanned swings in demand, including those caused by stockouts, in the supply chain execution process create distortions that can wreak havoc throughout the supply chain. There are numerous causes, often combined, that cause these supply chain distortions to initiate what has become known as the Bullwhip effect. While the devil is usually hidden in the details, as is the case here, the most common general factors of these demand distortions are: • Customers • Promotions • Sales • Production • Policies • Processes • Systems • Suppliers This is not planned for the demand results in a disturbance or a "build-up of demand", which can be a minor inconvenience for any customer, swings backwards through the supply chain, often causing huge and costly disruptions at the supplier end of the chain. Often, these swings in demand launch a “mad rush” in the manufacturing sector with the need to acquire and accelerate more raw materials and reschedule production. In the past, the “Bullwhip” effect was accepted as normal and, indeed, deemed an inevitable part of the order-to-delivery cycle. However, the negative effect on business performance is often found in excess inventory, quality problems, higher raw material costs, overtime expenses and shipping costs. In the worst case scenario, customer service declines, delivery times lengthen, sales are lost, costs increase, and capacity is adjusted. An important element of managing a smooth supply chain is to mitigate and preferably eliminate the “Bullwhip” effect. Lee et al. (1997) discussed four possible causes of the bullwhip effect: updating demand forecasts, order bundling, price fluctuation, rationing, and the shortage game. The updated demand forecast suggests that demand amplification occurs due to safety stocks and long lead times. As orders are forecasted and transmitted along the supply chain, safety stocks are accumulated and thus the bullwhip effect occurs. Material requirements planning or transportation economics require companies to order goods at certain times. This periodic clustering causes peaks in demand in a particular period of time, followed by periods of time with few or no orders and other periods of time with huge demands. Price fluctuation, which usually results from discounts or promotions, also distorts the purchasing pattern and creates greater demand variability and some demand irregularity. Finally, when demand significantly exceeds supply, manufacturers often ration products to their customers based on what they order. Recognizing this rationing policy, customers place larger and more frequent orders than they actually need in hopes of getting more products..