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Bullwhip Effect of Multiple Products with Interdependent Product Demands

In: Handbook of Ripple Effects in the Supply Chain

Author

Listed:
  • Srinivasan Raghunathan

    (The University of Texas at Dallas)

  • Christopher S. Tang

    (UCLA Anderson School)

  • Xiaohang Yue

    (The University of Wisconsin-Milwaukee)

Abstract

The bullwhip effect has been studied extensively by researchers using analytical and empirical models based on a single product. We extend the current theory to provide insights for a firm that manufactures multiple products in a single product category with interdependent demand streams. We find that interdependency between demand streams plays a critical role in determining the existence and magnitude of the bullwhip effect. More importantly, we show that interdependency impacts whether the firm should manage ordering and inventory decisions at the category level or at the product level, and whether the bullwhip effect measure computed at the category level is informative or not.

Suggested Citation

  • Srinivasan Raghunathan & Christopher S. Tang & Xiaohang Yue, 2019. "Bullwhip Effect of Multiple Products with Interdependent Product Demands," International Series in Operations Research & Management Science, in: Dmitry Ivanov & Alexandre Dolgui & Boris Sokolov (ed.), Handbook of Ripple Effects in the Supply Chain, pages 145-161, Springer.
    • Handle: RePEc:spr:isochp:978-3-030-14302-2_7
    DOI: 10.1007/978-3-030-14302-2_7
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    Cited by:

    1. Nguyen, Duy Tan & Adulyasak, Yossiri & Landry, Sylvain, 2021. "Research manuscript: The Bullwhip Effect in rule-based supply chain planning systems–A case-based simulation at a hard goods retailer," Omega, Elsevier, vol. 98(C).

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