Empirical Investigation of Bullwhip Effect Amplification in Nigeria’s Fast-Moving Consumer Goods Supply Chains

The bullwhip effect, characterizing the upstream amplification of demand variability in supply chains, generates excess inventory, production volatility, and increased costs that undermine supply chain performance. This study empirically investigates the magnitude and determinants of bullwhip effect amplification across three tiers of fast-moving consumer goods supply chains in Lagos and Ogun States, South West Nigeria. Order and sales data spanning 36 months are collected from 8 manufacturers, 24 distributors, and 72 retailers across six product categories through a combination of administrative data requests and structured record abstractions. Bullwhip ratios are computed at each supply chain tier using the variance amplification measure, and panel data regression analysis identifies firm-level, product-level, and relationship-level determinants of bullwhip magnitude. Results confirm substantial bullwhip amplification in all six product categories, with variance ratios averaging 3.4 at the manufacturer tier relative to end consumer demand. Price promotion frequency and order batching practice are identified as the two most significant amplification drivers, consistent with Lee et al.'s theoretical framework. Information sharing intensity between supply chain partners is associated with a 41 percent reduction in bullwhip magnitude. The study also quantifies the inventory and production cost consequences of the bullwhip effect at each tier, estimating aggregate annual losses exceeding N2.8 billion across sampled supply chains. Recommendations include vendor-managed inventory arrangements and collaborative forecasting programmes. Keywords: bullwhip effect, supply chain, FMCG, demand variability, Lagos State