The impact of demand variability and transshipment on vendor's distribution policies under vendor managed inventory strategy

2012 ◽  
Vol 139 (1) ◽  
pp. 42-48 ◽  
Author(s):  
Xu Chen ◽  
Gang Hao ◽  
Xun Li ◽  
Ka Fai Cedric Yiu
Keyword(s):  
Vendor Managed Inventory ◽  
Inventory Strategy ◽  
Demand Variability ◽  
The Impact

scholarly journals Pengurangan Bullwhip Effect dengan Metode Vendor Managed Inventory

2016 ◽  
Vol 14 (2) ◽  
pp. 292
Author(s):  
Fenny Rubbayanti Dewi ◽  
Annisa Kesy Garside
Keyword(s):  
Supply Chain ◽  
Bullwhip Effect ◽  
Vendor Managed Inventory ◽  
Information Distortion ◽  
Demand Variability ◽  
Demand Stability

Information distortion caused PT Multi Sarana Indotani got higher demand than the distributor. Demand variability in each echelon of the supply chain (bullwhip effect) may occur due to lack of demand stability that the producer had difficulty in determining the amount of production. One of the collaboration methods that can be applied to overcome the information distortion as causes of the bullwhip effect is vendor managed inventory, where the needs of distributor and retailers monitored and controlled by the producer. In this case, vendor managed inventory applied to two echelons, producer, and distributor. 

The Bullwhip Effect in Supply Networks

2021 ◽  
Author(s):  
Nikolay Osadchiy ◽  
William Schmidt ◽  
Jing Wu
Keyword(s):  
Operations Management ◽  
Aggregate Demand ◽  
Bullwhip Effect ◽  
Data Set ◽  
Supplier Relationships ◽  
Supply Networks ◽  
Customer Base ◽  
Base Management ◽  
Demand Variability ◽  
The Impact

We offer a new network perspective on one of the central topics in operations management—the bullwhip effect (BWE). The topic has both practical and scholarly implications. We start with an observation: the variability of orders placed to suppliers is larger than the variability of sales to customers for most firms, yet the aggregate demand variability felt by suppliers upstream does not amplify commensurably. We hypothesize that changes to the supplier’s customer base can smooth out its aggregate demand. We test the hypothesis with a data set that tracks the evolution of supply relationships over time. We show that the effect of customer base management extends beyond the statistical benefits of aggregation. In particular, both the formation and the dissolution of customer-supplier relationships are associated with the smoothing of the aggregate demand experienced by suppliers. This provides fresh insight into how firms may leverage their customer-supplier relationships to mitigate the impact of the BWE. This paper was accepted by Jay Swaminathan, operations management.

scholarly journals Demand Sharing Inaccuracies in Supply Chains: A Simulation Study

Complexity ◽  
2018 ◽  
Vol 2018 ◽  
pp. 1-13 ◽  
Author(s):  
Salvatore Cannella ◽  
Roberto Dominguez ◽  
Jose M. Framinan ◽  
Manfredi Bruccoleri
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Negative Impact ◽  
Positive Impact ◽  
Bullwhip Effect ◽  
Sources Of Information ◽  
Short Delay ◽  
Demand Information ◽  
Demand Variability ◽  
The Impact

We investigate two main sources of information inaccuracies (i.e., errors and delays) in demand information sharing along the supply chain (SC). Firstly, we perform a systematic literature review on inaccuracy in demand information sharing and its impact on supply chain dynamics. Secondly, we model several SC settings using system dynamics and assess the impact of such information inaccuracies on SC performance. More specifically, we study the impact of four factors (i.e., demand error, demand delay, demand variability, and average lead times) using three SC dynamic performance indicators (i.e., bullwhip effect, inventory variability, and average inventory). The results suggest that demand error has a negative impact on SC performance, which is exacerbated by the magnitude of the error and by low demand variability scenarios. In contrast, demand delay produces a nonlinear behavior in the supply chain response (i.e., a short delay may have a negative impact and a long delay may have a positive impact), being influenced by the supply chain configuration.

An Approach for Setting Inventory Norms for a Two-Echelon Supply Chain

2013 ◽  
Vol 6 (4) ◽  
pp. 102-119 ◽  
Author(s):  
N. Ramkumar ◽  
P. Subramanian ◽  
T. T. Narendran ◽  
K. Ganesh
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Real Life ◽  
Vendor Managed Inventory ◽  
Two Phase ◽  
Phase Approach ◽  
Supply Chain Costs ◽  
Product Classification ◽  
Demand Variability

Managing inventories is crucial to the objective of minimizing supply chain costs. This paper presents an approach for setting inventory norms in context of a real-life case of an industry which practices Vendor Managed Inventory (VMI). The role of warehouses and the inventories held by them becomes significant in such an environment. This paper presents a two-phase approach to determine various components of inventory norms taking into account lead time and demand variability. Innovative strategic product classification has been done to decide upon stocking quantity at warehouses.

Production control in precast fabrication: considering demand variability in production schedules

2011 ◽  
Vol 38 (2) ◽  
pp. 191-199 ◽  
Author(s):  
Chien-Ho Ko
Keyword(s):  
Lead Time ◽  
Production Control ◽  
Time Estimation ◽  
Customer Behavior ◽  
Business Success ◽  
Lead Times ◽  
Estimation Model ◽  
Key Factor ◽  
Demand Variability ◽  
The Impact

On-time delivery is a key factor in the business success of precast fabricators. The greatest obstacle to achieving this goal is demand variability. The objective of this research is to develop a plan that continuously improves production control systems for precast fabrication. This plan involves a lead time estimation model (LTEM) and schedule adjustment principles. The LTEM is established to estimate the impact of demand variability. In the model, previous jobs are analyzed as indicators of customer behavior. Using the captured behavior, fabrication lead time can be estimated for forthcoming projects. Two principles are proposed to adjust the production schedule according to the estimated lead times. Two adjustment principles are designed to reduce the impact of demand variability: (1) start fabrication later relative to the required delivery dates and (2) shift production milestones backward to the end of the production process. The effectiveness of the developed improvement plan including LTEM and the adjustment principles were validated using a real precast fabricator. The proposed approach is one of the first studies to use historical data to estimate the impacts of demand variability based on customer behavior.

Effects of Vendor-Managed Inventory on the Bullwhip Effect

2011 ◽  
Vol 4 (3) ◽  
pp. 1-17 ◽  
Author(s):  
Susanne Hohmann ◽  
Stephan Zelewski
Keyword(s):  
Supply Chain ◽  
Nonlinear Optimization ◽  
Optimization Model ◽  
Collaborative Planning ◽  
Bullwhip Effect ◽  
Vendor Managed Inventory ◽  
Demand Variability

The bullwhip effect means that demand variability increases as one moves up the supply chain. In the following article the bullwhip effect is quantified for each part of the supply chain which is presupposed to consist of a producer, a wholesaler, a retailer, and a consumer. After considering the causes of the bullwhip effect, it will be shown with the help of a nonlinear optimization model to what extent the bullwhip effect can be reduced using vendor-managed inventory (VMI) as one concept of Collaborative Planning, Forecasting and Replenishment (CPFR). In contrast to other studies in this field the reduction of the bullwhip effect will be accurately quantified for each part of the supply chain.

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