The Bullwhip Effect in Supply Chain and Countermeasures

2013 ◽  
Vol 711 ◽  
pp. 799-804 ◽  
Author(s):  
Yu Fang Chao
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Supply And Demand ◽  
Bullwhip Effect ◽  
Market Demand ◽  
Strategic Partnerships ◽  
Wide Spread ◽  
Demand Forecast ◽  
Demand Fluctuations ◽  
The Competitiveness Of Enterprises

As supply chain involves a wide spread of enterprises, it is inevitable to have a bullwhip effect. The reason, why bullwhip effect occurs, includes such factors as demand forecast, delay in delivery, bulk orders and others. Bullwhip effect results increased inventory, differences in supply and demand, posing great risks on enterprise operation. To reducing the bullwhip effect in supply chains, such strategies as establishing an information-sharing platform, establishing strategic partnerships, direct ship and transit, stabling market demand fluctuations, should be taken, which will improve the competitiveness of enterprises in supply chain.

Coordinating of multi-echelon supply chains through the generalized (R, S) policy

SIMULATION ◽  
2020 ◽  
Vol 96 (9) ◽  
pp. 767-778 ◽  
Author(s):  
Ahmed Shaban ◽  
Francesco Costantino ◽  
Giulio Di Gravio ◽  
Massimo Tronci
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Information Sharing ◽  
Negative Impact ◽  
Bullwhip Effect ◽  
Coordination Mechanism ◽  
Chain Model ◽  
Demand Forecast ◽  
Modeling Methodology ◽  
Information Demand

Numerous studies have confirmed the negative impact of the lack of coordination on supply chain performance. In particular, the lack of coordination leads to the bullwhip effect, which has severe impacts on supply chain stability. This paper evaluates a proposed coordination mechanism that allows a decentralized information sharing in multi-echelon supply chains. The proposed mechanism “Info-Smooth” utilizes the ordering rule of the generalized (R, S) policy in which a replenishment order can be transferred to upstream echelons including two pieces of information (demand forecast and inventory balance). As the generalized (R, S) can allow order smoothing, Info-Smooth combines the power of both information sharing and order smoothing. A simulation modeling methodology is employed to investigate the effectiveness of Info-Smooth in a multi-echelon supply chain. The factorial design results have shown that Info-Smooth is successful in mitigating the bullwhip effect whilst keeping acceptable inventory stability, compared to the traditional supply chain model.

Buffet Effect Simulation Model on Demand Chain Management

2010 ◽  
Vol 44-47 ◽  
pp. 688-692
Author(s):  
Xiao Yan Wang ◽  
Jian Sun
Keyword(s):  
Supply Chain ◽  
Side Information ◽  
Bullwhip Effect ◽  
Chain Management ◽  
Demand Chain ◽  
Supply Chain Efficiency ◽  
Demand Fluctuations ◽  
Partner Collaboration ◽  
Transmission Ability ◽  
Demand Chain Management

Bullwhip effect means the magnification of demand fluctuations, which is evident in a supply chain when demand increases and decreases, while the concept of Demand Chain Management means to make the planning on the basis of the demand side information so as to solve the problem of inconsistent upstream and downstream information by means of partner collaboration in the supply chain. Demand chain emphasizes the customer demand as its core value so as to achieve the best balance between the supply chain efficiency and customer satisfaction. Compared with the supply chain, the demand chain advises the enterprise to strengthen the information transmission ability to promote the performance. Under the demand chain management, the extent of bullwhip effect are weakened, and the fluctuation range against demand chain management is lower than against traditional supply chain.

Impact of demand forecast information sharing on the decision of a green supply chain with government subsidy

2021 ◽  
Author(s):  
Wenbin Wang ◽  
Wanying Lin ◽  
Jianhu Cai ◽  
Mengxue Chen
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Green Supply Chain ◽  
Government Subsidy ◽  
Demand Forecast

Investigating the impact of inventory inaccuracy on the bullwhip effect in RFID-enabled supply chains using colored petri nets

2019 ◽  
Vol 14 (2) ◽  
pp. 360-384 ◽  
Author(s):  
Maria Drakaki ◽  
Panagiotis Tzionas
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Petri Nets ◽  
Information Sharing ◽  
Bullwhip Effect ◽  
Colored Petri Nets ◽  
Content Type ◽  
Multi Stage ◽  
The Impact ◽  
Serial Supply Chains

PurposeInformation distortion results in demand variance amplification in upstream supply chain members, known as the bullwhip effect, and inventory inaccuracy in the inventory records. As inventory inaccuracy contributes to the bullwhip effect, the purpose of this paper is to investigate the impact of inventory inaccuracy on the bullwhip effect in radio-frequency identification (RFID)-enabled supply chains and, in this context, to evaluate supply chain performance because of the RFID technology.Design/methodology/approachA simulation modeling method based on hierarchical timed colored petri nets is presented to model inventory management in multi-stage serial supply chains subject to inventory inaccuracy for various traditional and information sharing configurations in the presence and absence of RFID. Validation of the method is done by comparing results obtained for the bullwhip effect with published literature results.FindingsThe bullwhip effect is increased in RFID-enabled multi-stage serial supply chains subject to inventory inaccuracy. The information sharing supply chain is more sensitive to the impact of inventory inaccuracy.Research limitations/implicationsInformation sharing involves collaboration in market demand and inventory inaccuracy, whereas RFID is implemented by all echelons. To obtain the full benefits of RFID adoption and collaboration, different collaboration strategies should be investigated.Originality/valueColored petri nets simulation modeling of the inventory management process is a novel approach to study supply chain dynamics. In the context of inventory errors, information on RFID impact on the dynamic behavior of multi-stage serial supply chains is provided.

A study of the bullwhip effect in supply- and demand-driven supply chain

2016 ◽  
Vol 34 (2) ◽  
pp. 124-134 ◽  
Author(s):  
Bin-Bin Cao ◽  
Zhong-Dong Xiao ◽  
Jia-Nan Sun
Keyword(s):  
Supply Chain ◽  
Supply And Demand ◽  
Bullwhip Effect

A Study of Inventory Management in Supply Chain under the Environment of Internet of Things

2014 ◽  
Vol 556-562 ◽  
pp. 6673-6676 ◽  
Author(s):  
Jia Tang
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Internet Of Things ◽  
Inventory Management ◽  
Forecast Accuracy ◽  
Market Demand ◽  
Inventory Models ◽  
Demand Forecast ◽  
Chain Management ◽  
The 1960S

Since the 1960s, the competition between enterprises has been replaced by the competition between supply chains because of rapid economic development. For the purpose of enhancing the competitiveness of supply chain by improving the level of supply chain management, the resources of enterprises in supply chain should be integrated and optimized, and then managed uniformly. Inventory management is the most important part of supply chain management. The inventory models what we are using have many limitations. The effectiveness of implementation often depends on the accuracy of the accuracy of “market demand forecast”. In order to reduce the reliance on “market demand forecast” accuracy to improve the efficiency of supply chain inventory management, we need to have further research on this theory by used of Internet of things to explore right model.

scholarly journals Exploring the Bullwhip Effect and Inventory Stability in a Seasonal Supply Chain

10.5772/56833 ◽  
2013 ◽  
Vol 5 ◽  
pp. 23 ◽  
Author(s):  
Francesco Costantino ◽  
Giulio Di Gravio ◽  
Ahmed Shaban ◽  
Massimo Tronci
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Performance Measures ◽  
Moving Average ◽  
Bullwhip Effect ◽  
Fill Rate ◽  
Supply Chain Dynamics ◽  
Effect Ratio ◽  
The Impact ◽  
Demand Seasonality

The bullwhip effect is defined as the distortion of demand information as one moves upstream in the supply chain, causing severe inefficiencies in the whole supply chain. Although extensive research has been conducted to study the causes of the bullwhip effect and seek mitigation solutions with respect to several demand processes, less attention has been devoted to the impact of seasonal demand in multi-echelon supply chains. This paper considers a simulation approach to study the effect of demand seasonality on the bullwhip effect and inventory stability in a four-echelon supply chain that adopts a base stock ordering policy with a moving average method. The results show that high seasonality levels reduce the bullwhip effect ratio, inventory variance ratio, and average fill rate to a great extent; especially when the demand noise is low. In contrast, all the performance measures become less sensitive to the seasonality level when the noise is high. This performance indicates that using the ratios to measure seasonal supply chain dynamics is misleading, and that it is better to directly use the variance (without dividing by the demand variance) as the estimates for the bullwhip effect and inventory performance. The results also show that the supply chain performances are highly sensitive to forecasting and safety stock parameters, regardless of the seasonality level. Furthermore, the impact of information sharing quantification shows that all the performance measures are improved regardless of demand seasonality. With information sharing, the bullwhip effect and inventory variance ratios are consistent with average fill rate results.

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