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On human decision behavior in multi-echelon inventory management

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  • Zhao, Yingshuai
  • Zhao, Xiaobo

Abstract

We conducted experiments in a multi-echelon inventory system with two scenarios: no information sharing and full information sharing. The results indicate that the bullwhip effect persists even after traditional causes have been excluded. Moreover, full information sharing cannot guarantee performance improvement. From a behavioral perspective, we analyze different causes of the bullwhip effect for the two scenarios with linear regression models. In addition, we find that the attitudes on two important inventory factors (the on-hand inventory and the stockout) are reversed in the two scenarios. These results may provide managers with useful new ideas for improving performance.

Suggested Citation

  • Zhao, Yingshuai & Zhao, Xiaobo, 2015. "On human decision behavior in multi-echelon inventory management," International Journal of Production Economics, Elsevier, vol. 161(C), pages 116-128.
    • Handle: RePEc:eee:proeco:v:161:y:2015:i:c:p:116-128
    DOI: 10.1016/j.ijpe.2014.12.005
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    2. Rahal, Imen & Elloumi, Abdelkarim, 2022. "The analysis of the Bullwhip effect on the supply chain management of perishable products," MPRA Paper 117992, University Library of Munich, Germany.
    3. Yang, Y. & Lin, J. & Liu, G. & Zhou, L., 2021. "The behavioural causes of bullwhip effect in supply chains: A systematic literature review," International Journal of Production Economics, Elsevier, vol. 236(C).
    4. Sarkar, Sourish & Kumar, Sanjay, 2015. "A behavioral experiment on inventory management with supply chain disruption," International Journal of Production Economics, Elsevier, vol. 169(C), pages 169-178.
    5. De, Arijit & Mogale, D.G. & Zhang, Mengdi & Pratap, Saurabh & Kumar, Sri Krishna & Huang, George Q., 2020. "Multi-period multi-echelon inventory transportation problem considering stakeholders behavioural tendencies," International Journal of Production Economics, Elsevier, vol. 225(C).

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