Assessing the Influence of Bullwhip Effect on Price Fluctuation of Agricultural Products at Mbalizi Market in Mbeya, Tanzania
Baraka Israel 
& Leticia Mahuwi
Issue: Vol.3 No.13 December 2022 Article 2 pp.673-685
DOI: https://doi.org/10.38159/ehass.20223132 | Published online 12th December 2022.
© 2022 The Author(s). This is an open access article under the CCBY license (http://creativecommons.org/licenses/by/4.0/).
The trends and causes of fluctuation in the price of agricultural products have been viewed and reported from different perspectives. Along the supply chain of agricultural products, the influence of bullwhip effect on price fluctuation has not been addressed. This study employed a cross-sectional research design and stratified random sampling technique to assess the influence of bullwhip effect on fluctuation in the price of agricultural products. Data was collected from 296 agricultural supply chain actors at Mbalizi market in Mbeya, Tanzania using a questionnaire survey and supplemented by a document review. The influence of bullwhip effect on fluctuation in the price of agricultural products was established by using descriptive statistics (frequencies and percentages). The study revealed that lead time, aspiration to achieve economies of scale, batch ordering system, inflated orders, government policies, fear of price increases and shortage gaming influence fluctuation in the price of agricultural products. The study concludes that bullwhip effect amplifies the phenomenon of price fluctuation along the supply chain of agricultural products due to increased or decreased demand expectations among traders and farmers. The authors recommend centralising demand information and adopting supply chain computer-based systems through proper coordination, collaboration and strategic partnerships among traders and farmers. This will enhance better information sharing, thus minimising the domino effect of bullwhip.
Keywords: Bullwhip effect, agricultural products, agricultural SC, price fluctuation, trends.
Adnan, Z. H., and Ozelkan, E., “Bullwhip effect in pricing under different supply chain game structures.” Journal of Revenue and Pricing Management,18, ( 5), (2019): 393-404.
Akerlof, G., “The Market for Lemons” Quarterly Journal of Economics, 84, (1970): 488-500.
Changalima, I. A. and Ismail, I. J., “Agriculture supply chain challenges and smallholder maize farmers’ market participation decisions in Tanzania.” Tanzania Journal of Agricultural Sciences, 21, (1), (2022):104-120.
Coppini, M., Rossignoli, C., Rossi, T. and Strozzi, F., “Bullwhip Effect and Inventory Oscillations Analysis using the Beer Game Model,” International Journal of Production Research, 48, (13), (2010):3943-3956.
Dahlin, K. and Oscar, S. Causes of the bullwhip effect: A study of the bullwhip effect in the Volvo Group. Master’s thesis at Linköping University. 2021, Linköping University: Linköping, Sweden.
European Commission, Price dashboard no 122-July 2022 edition. European Union: Brussels, Belgium, 2022.
FAO, The State of Agriculture Commodity Markets. Food and Agriculture Organization of the United Nations: Rome, Italy, 2022.
Flick, U., Introducing Research Methodology: Thinking Your Way Through Your Research Project. SAGE Publications: London, Britain, 2020.
Huka, H., Ruoja, C., and Mchopa, A., “Price fluctuation of agricultural products and its impact on small scale farmers development: Case analysis from Kilimanjaro Tanzania.” European Journal of Business and Management, 6, (36), (2014): 155-160.
Israel, B., Majaliwa, D. and Kinala, M., “Contribution of Agricultural Marketing Co-operatives in Commercialisation Among Smallholder Maize Farmers in Mbozi District,” Tanzania. Journal of Studies in Social Sciences and Humanities, 8, (1) (2022): 98–111.
Israel, G. D., “Sampling the evidence of extension programme: Programme evaluation and organisational development.”International Statistical Review, 47,(2), (1992): 99-109.
Khan, M., Ahmed, S. and Hussain, D. “Analysis of bullwhip effect: A behavioural Approach.” Supply Chain Forum: An International Journal, 20, (4) (2019): 310-331.
Misaki, E., Apiola, M., Gaiani, S., and Tedre, M., “Challenges facing sub‐Saharan small‐scale farmers in accessing farming information through mobile phones: A systematic literature review.” Electronic journal of information systems in developing countries, 84, (4), (2018): 1-12.
Mchopa, A. D., Jeckoniah, J.N., Israel, B. and Changalima, I. A., “Socio-economic determinants of participation in sunflower value chain among smallholder farmers in Iramba District Tanzania.” East African Journal of Social and Applied Sciences, Vol. 2, (2), (2020): 105–114.
National Bureau of Statistics, The national accounts statistics publication. National Bureau of Statistics: Dodoma, Tanzania (2021).
Nienhaus, J., Ziegenbein, A. and Schoensleben, P., How human behaviour amplifies the bullwhip effect. A study based on the beer distribution game online. Production planning and control, 17, (6), (2006): 547-557.
Ozelkan, E., Lim, C., and Adnan, Z., “Conditions of reverse bullwhip effect in pricing under joint decision of replenishment and pricing.” International Journal of Production Economics, 200,(2018): 207–223.
Pena, D., Bas, A., and Maldonado, R. Impact of bullwhip effect in quality and waste in perishable supply chain. Processes, 9, (7) (2021): 7, https://doi.org/10.3390/pr9071232.
Rahman, H., Rahman, A., and Talapatra, S., The bullwhip effect: causes, intensity, and mitigation. Production and manufacturing research, 8, (1), (2020): 406-426.
Steven, M., Agricultural production and price fluctuation in Uganda. A case study of Namungo subcounty, Mityana district. A research report submitted for the award of bachelor’s degree of economics and applied statistics of Kampala International University, Uganda, (2018).
Tong, A., “Factors influencing price of agricultural products and stability countermeasures.” Asian Agricultural Research, 4, (4), (2012): 17-21.
Udenio, M., Vatamidou, E., Fransoo, J. and Dellaert, N., “Behavioural causes of the bullwhip effect: An analysis using linear control theory.” IISE Transactions, 49, 10, (2017): 980-1000.
Wang, J., Huo, Y., Guo, X., and Xu, Y. “The Pricing Strategy of the Agricultural Product Supply Chain with Farmer Cooperatives as the Core Enterprise.” Agriculture, 12, (2022): 732, https://doi.org/10.3390/agriculture12050732.
Yuan, X., Zhang, X., Wang, M., and Zhang, D., “Quantifying the bullwhip effect in a reverse supply chain: The impact of different forecasting methods.” Mathematical problems in engineering, (2022). https://doi.org/10.1155/2022/2701530.
Xie, H., and Wang, B., An empirical analysis of the impact of agricultural product price fluctuations on China’s grain yield. Sustainability, 9, (2017). https://doi:10.3390/su9060906.
Zhang, X., Qing, P. and Yu, X., “Short Supply Chain Participation and Market Performance for Vegetable Farmers in China.” Australian Journal of Agricultural and Resource Economics, 63(2) (2019): 282–306.
Baraka Israel (BPLM, CPSP (T)-IFPSM, MA_PSM, & KAIZEN Expert) is currently an Assistant Lecturer – Procurement, Supply Chain & Logistics Management, College of Business Education (CBE) – Mbeya Campus, Tanzania.
Leticia Mahuwi (BPLM, CPSP (T)-IFPSM, MA_PSM) is currently an Assistant Lecturer – Procurement, Supply Chain & Logistics Management, College of Business Education (CBE) – Mbeya Campus, Tanzania. Her areas of research interest include supply chain management, logistics management and public procurement.
Israel B. & Mahuwi L. “Assessing the Influence of Bullwhip Effect on Fluctuation in the Price of Agricultural Products at Mbalizi Market in Mbeya, Tanzania,” E-Journal of Humanities, Arts and Social Sciences 3, no.13 (2022):673-685. https://doi.org/10.38159/ehass.20223132
© 2022 The Author(s). Published and Maintained by Noyam Publishers. This is an open access article under the CCBY license (http://creativecommons.org/licenses/by/4.0/).
Featured
Others