DDBA 8531 Week 3 Derived Demand Trace Example

From the Snack Aisle to the Corrugator: Tracing a Packaging Maker's Carton Orders Through a Snack Manufacturer and Three Grocery Chains to Shoppers, and What the Trace Says to the Manufacturer's Buying Committee

Student Name

Walden University

DDBA 8531: Seminar in B2B Marketing

Instructor Name

Month Day, Year

From the Snack Aisle to the Corrugator: Tracing a Packaging Maker's Carton Orders Through a Snack Manufacturer and Three Grocery Chains to Shoppers, and What the Trace Says to the Manufacturer's Buying Committee

Why Trace Demand Downstream

A composite corrugated packaging maker in Ohio, here called Ridgeline Box, sells about 18 percent of its output to one customer, a regional snack manufacturer that makes kettle chips and pretzels for grocery chains in five Midwestern states. Ridgeline's carton orders from the manufacturer swung from 410,000 cases in the first quarter of 2025 to 610,000 in the second and back to 380,000 in the third. Ridgeline's sales team treats those swings as the manufacturer's business. This trace argues that they start further down the chain, and that understanding where they start would change what Ridgeline says to the manufacturer.

The Chain

[after]

The figures are composite but mirror the shape found in the case records. The key contrast is between the first and last rows: shoppers bought about 4 percent more over the year, while Ridgeline's quarterly orders swung by nearly half.

Table 1

Demand at Each Link, 2025

Walking the Chain Upstream

At the shopper level, demand was steady and growing slowly. The scan data show weekly unit sales varying by about 8 percent around their trend, except during promotion weeks.

At the grocery level, decisions created the first swing. Two chains planned a spring promotion on salty snacks and ordered heavily from the manufacturer in April to stock it. One chain also reset its snack aisle in June, adding shelf space for the manufacturer's pretzels, which required filling new facings at once. Neither decision reflected a change in what shoppers wanted over the year; both concentrated purchases into a few weeks.

At the manufacturer, those orders became a production surge. The manufacturer built inventory in April and May to meet the promotion orders and the aisle reset, and it ordered cartons in large batches to secure supply. After the promotion, the chains drew down their own inventory and ordered less, and the manufacturer cut production and carton orders sharply.

At Ridgeline, the swing arrived amplified and late. Second-quarter orders climbed roughly 49 percent, and third-quarter orders then dropped about 38 percent.

Why the Swing Grows

Lee et al. (1997) explained that order variability tends to increase as orders move up a supply chain, a pattern they called the bullwhip effect, and they identified four causes: each tier revising its forecast from the orders it receives instead of from final sales, ordering in large batches, price swings such as promotions, and shortage gaming when supply is rationed. Two of those causes operate in this chain. Promotions shifted chain orders into a few weeks, and the manufacturer's batch ordering of cartons magnified the shift. Sterman (1989), in experiments with a simulated supply chain, found that decision makers tend to ignore orders already placed but not yet received, which leads them to overorder and then overcorrect, and the manufacturer's sharp cut in the third quarter fits that pattern.

Cachon et al. (2007) found that the bullwhip effect is weaker and less common across industries than the classic examples suggest, partly because many manufacturers smooth production. That caution matters: the amplification here is not inevitable, and it reflects choices the manufacturer could change.

What Ridgeline Should Say

The trace gives Ridgeline something to offer the manufacturer's buying committee beyond price. To the manufacturer's production planners, Ridgeline can show that carton orders swung far more than shopper demand and propose a shared forecast based on the chains' promotion calendars, with cartons delivered in smaller, more frequent lots. To the purchasing manager, Ridgeline can offer a supply agreement with a committed base volume and flexible increments tied to promotion weeks. To finance, Ridgeline can argue that smoothing carton orders reduces the manufacturer's own packaging inventory and the storage it requires.

Ridgeline's own interest is plain: steadier orders would let it schedule its corrugator more efficiently. But the argument works only if it is framed around the manufacturer's costs, since the buying committee's members will judge it by their own tests.

Limits

The trace relies on data the manufacturer shared and on composite figures. It cannot show whether the chains would share promotion calendars earlier, which the proposal requires.

References

Cachon, G. P., Randall, T., & Schmidt, G. M. (2007). In search of the bullwhip effect. Manufacturing & Service Operations Management, 9(4), 457-479. https://doi.org/10.1287/msom.1060.0149

Lee, H. L., Padmanabhan, V., & Whang, S. (1997). Information distortion in a supply chain: The bullwhip effect. Management Science, 43(4), 546-558. https://doi.org/10.1287/mnsc.43.4.546

Sterman, J. D. (1989). Modeling managerial behavior: Misperceptions of feedback in a dynamic decision making experiment. Management Science, 35(3), 321-339. https://doi.org/10.1287/mnsc.35.3.321