The Effect of Different Payment Terms on Order Variability in a Supply Chain

2005 ◽  
pp. 90-108
Author(s):  
I. Nyoman Pujawan
Keyword(s):  
Information System ◽  
Supply Chain ◽  
Supply Chain Management ◽  
Lot Sizing ◽  
Bullwhip Effect ◽  
Uncertain Demand ◽  
Vendor Managed Inventory ◽  
Chain Management ◽  
Parameter Values ◽  
Order Variability

Literature on supply chain management has acknowledged the effects of forecasting techniques, lot sizing rules, centralising information system, vendor managed inventory, and various biases and noises on order variability or bullwhip effect. We will show in this chapter that order variability from a buyer is also affected by the payment terms offered by the supplier. We develop mathematical models to accommodate different payment terms into the lot sizing techniques. The models are then simulated under uncertain demand situations over a range of parameter values. The results suggest that payment terms have substantial impacts on order variability passed by a supply chain channel onto its upstream channel.

scholarly journals Bullwhip Effect in the Information Flow of a Supply Chain: A Role of Culture

2014 ◽  
Vol 5 (1) ◽  
pp. 34-45 ◽  
Author(s):  
Tadeja Lampret ◽  
Vojko Potočan
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Information Flow ◽  
Bullwhip Effect ◽  
Theoretical Research ◽  
Market Demand ◽  
Chain Management ◽  
Whip Effect ◽  
Order Variability

Abstract The main goal of our research is to analyze and display causes of a bullwhip effect formation within a supply chain, as well as to provide the appropriate solutions to limit the occurrence of the bullwhip effect by using the proper information flow and partners’ cooperation within the supply chain. The bullwhip effect is one of the most important issues in the supply chain management and it is present in many companies. It preserves a character of invisibility because there are lots of causes for its formation and they are usually difficult to discern. The bullwhip effect is a phenomenon of an increase in the order variability within a supply chain. The higher we are within the supply chain, the higher is the order variability. The company encountered with the whip effect can successfully reduce its impact by improving the information flow, as well as improving partners’ cooperation within the supply chain. In this way the company can limit its negative repercussions and increase the profit. The article focuses on the overview of the bullwhip effect within a distribution chain, from its causes to suggestions and measures how to ease its negative repercussions on the organisation. Part of the causes could be found in the market demand variability and in the lack of communication about the actual marked demand within the supply chain. The rest of the causes are related to obstacles that emerge among different partners within the supply chain (role of culture). A qualitative analysis is applied on the basis of the selected cognitions from the supply chain management. The quantitative analysis is based on the theoretical research of the effective flow of information among the participants and its contribution to the reduction of the bullwhip impact. The article discusses two research questions: 1) The correct information flow within the supply chain and the improvement of the communication among partners can lead to the bullwhip effect reduction, and 2) A reduction of the bullwhip influence can lead to the increase of cooperation among partners. The results of the analysis can be used for further research.

Classification of Operational and Financial Variables Affecting the Bullwhip Effect in Indian Sectors: A Machine Learning Approach

2019 ◽  
Vol 12 (3) ◽  
pp. 171-179 ◽  
Author(s):  
Sachin Gupta ◽  
Anurag Saxena
Keyword(s):  
Machine Learning ◽  
Data Mining ◽  
Supply Chain ◽  
Supply Chain Management ◽  
Product Life Cycle ◽  
Consumer Preference ◽  
Bullwhip Effect ◽  
Machine Learning Techniques ◽  
Chain Management ◽  
Financial Variables

Background: The increased variability in production or procurement with respect to less increase of variability in demand or sales is considered as bullwhip effect. Bullwhip effect is considered as an encumbrance in optimization of supply chain as it causes inadequacy in the supply chain. Various operations and supply chain management consultants, managers and researchers are doing a rigorous study to find the causes behind the dynamic nature of the supply chain management and have listed shorter product life cycle, change in technology, change in consumer preference and era of globalization, to name a few. Most of the literature that explored bullwhip effect is found to be based on simulations and mathematical models. Exploring bullwhip effect using machine learning is the novel approach of the present study. Methods: Present study explores the operational and financial variables affecting the bullwhip effect on the basis of secondary data. Data mining and machine learning techniques are used to explore the variables affecting bullwhip effect in Indian sectors. Rapid Miner tool has been used for data mining and 10-fold cross validation has been performed. Weka Alternating Decision Tree (w-ADT) has been built for decision makers to mitigate bullwhip effect after the classification. Results: Out of the 19 selected variables affecting bullwhip effect 7 variables have been selected which have highest accuracy level with minimum deviation. Conclusion: Classification technique using machine learning provides an effective tool and techniques to explore bullwhip effect in supply chain management.

Fading Challenges in Implementation of Supply Chain Management Information System in the Indian Automobile Industry

2020 ◽  
pp. 230-262
Author(s):  
Manisha Seth ◽  
Ravi Kiran ◽  
D. P. Goyal
Keyword(s):  
Information System ◽  
Supply Chain ◽  
Supply Chain Management ◽  
Automobile Industry ◽  
Management Information System ◽  
Communication Systems ◽  
Successful Implementation ◽  
Management Information ◽  
Chain Management ◽  
Set Up

With the advent of globalization and fast changing environment, companies are using information and communication systems in the supply chain. Supply chain management information system (SCMIS) has gained a lot of importance because of its ability to reduce costs and increase responsiveness in the supply chain. Review of literature has revealed that the success in implementation of SCMIS and successfully attaining the return expected from the system implemented is a challenge. With such high failure rates scenario, it becomes imperative to identify the risk and the failure factors that may arise during implementation and the ways to tackle these risks. In this chapter, an attempt has been made to establish the challenges, their severity, and improvisation for the successful implementation of SCMIS in the Indian automobile industry. The findings can help the practitioners and managers better understand the challenges, focus the resources, their attention, set up the priorities, and thus improve the chances of successful implementation of SCMIS.

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