Covid-19 bullwhip revisited

As described in my earlier post, many supermarkets around the world experienced shortages of toilet paper due to the Covid-19 induced bullwhip effect. Now, we witnessed the second phase of this phenomenon. As consumers increased the safety stock levels of toilet paper in their homes in order to prevent stockouts – resulting in stockouts on the supermarket shelves – they purchased a lower quantity in the last week. According to a statistic published in the FAZ on May 22^nd the demand for toilet paper dropped by 28% in the week of May 11-17, compared to the average demand from August 2019 to January 2020. In the next weeks, we expect the demand for toilet paper to settle slightly above this earlier average in the coming weeks, as consumers will go back to their previous buying and stock keeping patterns. However, the average demand will continue to be higher than before, as people work more time from home and spend less time in their previous office environment.

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