The bullwhip effect in the supply chain and the corresponding solution

The idea of supply chain management (SCM) is a newly developed theory of management nowadays. But when the demand information is passed on along the supply chain we can see a phenomenon that the fluctuation of the demand information becomes larger and larger, which is called "bullwhip effect". "Bullwhip effect" may have much negative impact. A few measures are introduced to weaken the impact in this paper. We also explain a strategic alliance between the retailer and the supplier and the main forms of the alliance. Furthermore, a compare between the centralized control strategy of the multistage system and the traditional strategy is made to show the advantages of the former.