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Bullwhip Effect Analysis in Two-Level Supply Chain Distribution Network Using Different Demand Forecasting Technology

Author

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  • Xi Gang Yuan

    (The School of Statistics, Southwestern University of Finance and Economics, Chengdu 611130, P. R. China)

  • Nan Zhu

    (The School of Statistics, Southwestern University of Finance and Economics, Chengdu 611130, P. R. China)

Abstract

Following the basic work conducted by Lee et al. [(1997a), The bullwhip effect in supply chains. Sloan Management Review, 38(3), 93–102; (1997b), Information distribution in a supply chain: The bullwhip effect. Management Science, 43(4), 546–558] and using two first-order autoregressive AR(1) models, respectively, this paper provides three quantitative models of the bullwhip effect of the two-level supply chain distribution network consisting of a single manufacturer and two retailers. The paper assumes that two retailers adopt the order point method, uses three kinds of demand forecasting technology, i.e., moving average, exponential smoothing and minimum mean square error methods, respectively, provides three corresponding models for analyzing the impact of bullwhip effect of two-level supply chain distribution network. At the same time, this paper compares and analyzes the results of the three models through simulation.

Suggested Citation

  • Xi Gang Yuan & Nan Zhu, 2016. "Bullwhip Effect Analysis in Two-Level Supply Chain Distribution Network Using Different Demand Forecasting Technology," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 33(03), pages 1-23, June.
    • Handle: RePEc:wsi:apjorx:v:33:y:2016:i:03:n:s0217595916500160
    DOI: 10.1142/S0217595916500160
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    References listed on IDEAS

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    1. Hau L. Lee & Kut C. So & Christopher S. Tang, 2000. "The Value of Information Sharing in a Two-Level Supply Chain," Management Science, INFORMS, vol. 46(5), pages 626-643, May.
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    7. Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
    8. Udenio, Maximiliano & Fransoo, Jan C. & Peels, Robert, 2015. "Destocking, the bullwhip effect, and the credit crisis: Empirical modeling of supply chain dynamics," International Journal of Production Economics, Elsevier, vol. 160(C), pages 34-46.
    9. Sodhi, ManMohan S. & Tang, Christopher S., 2011. "The incremental bullwhip effect of operational deviations in an arborescent supply chain with requirements planning," European Journal of Operational Research, Elsevier, vol. 215(2), pages 374-382, December.
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