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Also, known as the Bullwhip Effect: http://en.wikipedia.org/wiki/Bullwhip_effect

We played the Beer Distribution Game @ MIT to simulate this phenomenon. (http://en.wikipedia.org/wiki/Beer_Distribution_Game) While my initial reaction is to shudder at the thought of a Raisin Czar, I gotta say that I'm not sure it's a bad idea after seeing how out of control long time constant supply chains can become.



The BDG demonstrates oscillations in conditions of isolation -- the participants aren't allowed to communicate and nobody has any insight into the global status of the system.

Agriculture is not like that. In particular, the supply of any crop is known and publicised as harvesting begins, and it can be predicted with some confidence based on seasonal conditions. Current worldwide market rates and futures provide guidance on what is happening elsewhere. So in fact all participants have partial insight into the global state of the system, which changes behaviour considerably from the BDG scenario.




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