An analysis of the impact of reputation on supply webs

In long-term, recurring contractual relationships, which are common in the B2B-area, reputation and trust play an outstanding role. The impact of reputation and price-based assessment of suppliers on the material flow in the supply chain will be investigated in this analysis. Positive reputation proves to be a key factor to reach a market dominating position. We observed in our simulation, that the assessment of suppliers towards a reputation-based choice has a positive effect on supply chain stabilitiy. In the worst case, a strong reputationbased choice leads to the formation of monopolies. The Bullwip-Effect, that could be observed as a second phenomenon in our simulation setting, represents a countertendency to the reputation-based monopoly effect. This countereffect is observed to be even stronger for members of tiers with a high fluctuation of order rates.