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Production smoothing in a serial supply chain: A laboratory investigation

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  • Cantor, David E.
  • Katok, Elena

Abstract

The purpose of this paper is to examine production smoothing in supply chains. Using the controlled setting of the laboratory, we systematically investigate supply chain features that lead to production smoothing. In contrast to prior laboratory studies of the bullwhip effect, we find that the bullwhip effect disappears in several of our experiments. More importantly, our study shows that when customer demand has a predictable seasonal component, retailers smooth orders. This behavior is more pronounced when changing order levels is costly. The results demonstrate how simplifying the structure of the supply chain leads to production smoothing behavior.

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  • Cantor, David E. & Katok, Elena, 2012. "Production smoothing in a serial supply chain: A laboratory investigation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 781-794.
    • Handle: RePEc:eee:transe:v:48:y:2012:i:4:p:781-794
    DOI: 10.1016/j.tre.2012.01.005
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    2. 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.
    3. Ojha, Divesh & Sahin, Funda & Shockley, Jeff & Sridharan, Sri V., 2019. "Is there a performance tradeoff in managing order fulfillment and the bullwhip effect in supply chains? The role of information sharing and information type," International Journal of Production Economics, Elsevier, vol. 208(C), pages 529-543.
    4. Dominguez, Roberto & Cannella, Salvatore & Framinan, Jose M., 2015. "On returns and network configuration in supply chain dynamics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 152-167.
    5. 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).
    6. Haeussler, Stefan & Stefan, Matthias & Schneckenreither, Manuel & Onay, Anita, 2021. "The lead time updating trap: Analyzing human behavior in capacitated supply chains," International Journal of Production Economics, Elsevier, vol. 234(C).
    7. Li Chen & Hau L. Lee, 2012. "Bullwhip Effect Measurement and Its Implications," Operations Research, INFORMS, vol. 60(4), pages 771-784, August.
    8. Ying Ding & Yanping Tu & Jingchuan Pu & Liangfei Qiu, 2021. "Environmental Factors in Operations Management: The Impact of Air Quality on Product Demand," Production and Operations Management, Production and Operations Management Society, vol. 30(9), pages 2910-2924, September.
    9. Udenio, Maximiliano & Vatamidou, Eleni & Fransoo, Jan C., 2023. "Exponential smoothing forecasts: Taming the Bullwhip Effect when demand is seasonal," Other publications TiSEM 8fca6329-83b9-4a49-a2aa-e, Tilburg University, School of Economics and Management.
    10. Robert N. Boute & Jan A. Van Mieghem, 2015. "Global Dual Sourcing and Order Smoothing: The Impact of Capacity and Lead Times," Management Science, INFORMS, vol. 61(9), pages 2080-2099, September.
    11. Chatfield, Dean C. & Pritchard, Alan M., 2013. "Returns and the bullwhip effect," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 49(1), pages 159-175.
    12. Ponte, Borja & Puche, Julio & Rosillo, Rafael & de la Fuente, David, 2020. "The effects of quantity discounts on supply chain performance: Looking through the Bullwhip lens," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    13. Arunachalam Narayanan & Brent B. Moritz, 2015. "Decision Making and Cognition in Multi-Echelon Supply Chains: An Experimental Study," Production and Operations Management, Production and Operations Management Society, vol. 24(8), pages 1216-1234, August.
    14. Yu, Dejian & Yan, Zhaoping, 2023. "Main path analysis considering citation structure and content: Case studies in different domains," Journal of Informetrics, Elsevier, vol. 17(1).
    15. Wang, Xun & Disney, Stephen M., 2016. "The bullwhip effect: Progress, trends and directions," European Journal of Operational Research, Elsevier, vol. 250(3), pages 691-701.

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