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The impact of information sharing on bullwhip effect reduction in a supply chain

Author

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  • Kiyoung Jeong

    (University of Houston at Clear Lake)

  • Jae-Dong Hong

    (South Carolina State University)

Abstract

In this study, the impact of information sharing on bullwhip effect (BWE) is investigated using a four-echelon supply chain simulation model where each echelon shares some of the customer demand forecast information with a retailer, the lowest echelon. The level of the demand forecast shared at each echelon is represented as information sharing rate (ISR). Four different levels of ISR are considered to evaluate its impact on BWE. A full factorial design with 64 cases is used, followed by statistical analysis. The results show that (1) overall, higher ISR more significantly reduce BWE than lower ISR at all echelons; (2) further, the impact of ISR is not same between echelons. The ISR at an echelon where BWE is measured has the highest impact. However, its impact decreases at downstream echelons; (3) BWE is affected by not only the magnitude but also the balance of ISR’s across echelons, while the former has three times more impact than the latter; (4) lastly, we demonstrate that a highly unbalanced ISR may cause reverse bullwhip effect (RBWE), particularly when the level of unblance at downstream echelons is high and the uppermost echelon where BWE is measured has the highest ISR. Based on this demonstration, we derive a functional relationship between ISR’s and RBWE using regression analysis. We believe that results from this study provide useful implications and insights for better coordination and collaboration in a supply chain.

Suggested Citation

  • Kiyoung Jeong & Jae-Dong Hong, 2019. "The impact of information sharing on bullwhip effect reduction in a supply chain," Journal of Intelligent Manufacturing, Springer, vol. 30(4), pages 1739-1751, April.
    • Handle: RePEc:spr:joinma:v:30:y:2019:i:4:d:10.1007_s10845-017-1354-y
    DOI: 10.1007/s10845-017-1354-y
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    References listed on IDEAS

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    Cited by:

    1. Reena Jain & Mona Verma & Chandra K. Jaggi, 2021. "Impact on bullwhip effect in food industry due to food delivery apps," OPSEARCH, Springer;Operational Research Society of India, vol. 58(1), pages 148-159, March.
    2. Lina Tang & Taho Yang & Yiliu Tu & Yizhong Ma, 2021. "Supply chain information sharing under consideration of bullwhip effect and system robustness," Flexible Services and Manufacturing Journal, Springer, vol. 33(2), pages 337-380, June.
    3. Roberto Dominguez & Salvatore Cannella & Borja Ponte & Jose M. Framinan, 2022. "Information sharing in decentralised supply chains with partial collaboration," Flexible Services and Manufacturing Journal, Springer, vol. 34(2), pages 263-292, June.
    4. Erkan Bayraktar & Kazim Sari & Ekrem Tatoglu & Selim Zaim & Dursun Delen, 2020. "Assessing the supply chain performance: a causal analysis," Annals of Operations Research, Springer, vol. 287(1), pages 37-60, April.
    5. Dass, Mayukh & Reshadi, Mehrnoosh & Li, Yuewu, 2023. "An exploration of ripple effects of advertising among major suppliers in a supply chain network," Journal of Business Research, Elsevier, vol. 169(C).
    6. Jiali Wang & Xue Peng & Yunan Du & Fulin Wang, 2022. "A tripartite evolutionary game research on information sharing of the subjects of agricultural product supply chain with a farmer cooperative as the core enterprise," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 159-177, January.

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