Behavioural Supply Chain Management: The Role of Anchoring and Overconfidence in Forecasting and Planning

Abstract

The bullwhip effect, where small demand shifts escalate upstream, remains a major supply chain challenge. Structural drivers explain part of this volatility, but behavioural factors also play a role. This study examines how anchoring and overconfidence shape forecasting and planning decisions. Behavioural tasks and an expert interview reveal that anchoring fixes decisions to initial demand signals, while overconfidence narrows prediction ranges and reduces safety buffers. These biases interact with structural dynamics, amplifying variability. Debiasing strategies emerge as promising countermeasures. The findings contribute to behavioural supply chain management by showing how cognitive biases reinforce the bullwhip effect and offering practical guidance for reducing its impact.