Adaptive fuzzy vendor managed inventory control for mitigating the Bullwhip effect in supply chains

This paper proposes an adaptive fuzzy control application to support a vendor managed inventory (VMI). The methodology applies fuzzy control to generate an adaptive smoothing constant in the forecast method, production and delivery plan to eliminate, for example, the rationing and gaming or the Houlihan effect and the order batching effect or the Burbidge effects and finally the Bullwhip effect. The results show that the adaptive fuzzy VMI control surpasses fuzzy VMI control and traditional VMI in terms ofmitigating the Bullwhip effect and lower delivery overshoots and backorders. This paper also guides management in allocating inventory by coordinating suppliers and buyers to ensure minimum inventory levels across a supply chain. Adaptive fuzzy VMI control is the main contribution of this paper. 2011 Elsevier B.V. All rights reserved.