Bullwhip Effect Measurement and Its Implications

نویسندگان

  • Li Chen
  • Hau L. Lee
چکیده

The bullwhip effect, or demand information distortion, has been a subject of both theoretical and empirical studies in the operations management literature. In this paper, we develop a simple set of formulas that describe the traditional bullwhip measure as a combined outcome of several important drivers, such as finite capacity, batch-ordering, and seasonality. Our modeling framework is descriptive in nature as it features certain plausible approximations that are commonly employed in practical inventory systems. The results are nonetheless compelling and can be used to explain various conflicting observations in previous empirical studies. Building on the theoretical framework, we discuss the managerial implications of the bullwhip measurement. We show that the measurement can be completely noninformative about the underlying supply chain cost performance if it is not linked to the operational details (such as decision intervals and leadtimes). Specifically, we show that an aggregated measurement over relatively long time periods can mask the operational-level bullwhip. In addition, we show that masking also exists under product or location aggregation in some illustrative cases.

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

منابع مشابه

Small sample uncertainty aspects in relation to bullwhip effect measurement

The bullwhip effect as a concept has been known for almost half a century starting with the Forrester effect. The bullwhip effect is ‘‘allegedly’’ observed in many supply chains, and it is generally accepted as a potential malice. Despite this the bullwhip effect still seems to be first and foremost a conceptual phenomenon. Some even simply denies that the phenomenon exists at all in practice. ...

متن کامل

Measuring and Analyzing the Bullwhip Effect in a Two-Product and Two Echelon Supply Chain Using Control Theory Approach

Coordination is very important in supply chain management and it is one of the main factors in supply chain profitability. Bullwhip effect is one of the basic obstacles to achieve coordination in supply chains and reduction of this phenomenon has an important role in supply chain harmony. The other side, costs of supply chain can be mitigated and customer service level can be increased by reduc...

متن کامل

A hybrid fuzzy multiple attribute decision making approach for identification and ranking influencing factors on Bullwhip Effect in supply chain: real case of Steel ‎industry‎

Bullwhip effect phenomenon is what reduces the efficiency of the supply chain. The effect occurs when demand changes in the supply chain face with a lot of volatility. So far, several key factors have been identified as causes of this phenomenon. Since the steel industry, is the basic one, its efficiency is of great importance. Therefore, in this study influencing factors on Bullwhip Effect in ...

متن کامل

On the Bullwhip Effect Measure in Supply Chains with VAR (1) Demand Process

In this paper, a two-echelon supply chain, which includes two products based on the following considerations, has been studied and the bullwhip effect is quantified. Providing a measure for bullwhip effect that enables us to analyze and reduce this phenomenon in supply chains with two products is the basic purpose of this paper. Demand of products is presented by the first order vector autoregr...

متن کامل

ذخیره در منابع من


  با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

عنوان ژورنال:
  • Operations Research

دوره 60  شماره 

صفحات  -

تاریخ انتشار 2012