WSEAS Transactions on Mathematics
Print ISSN: 1109-2769, E-ISSN: 2224-2880
Volume 15, 2016
The Bullwhip Effect Caused by Information Distortion in a Complex Supply Chain Under Exponential Smoothing Forecast
Authors: , ,
Abstract: The bullwhip effect is the phenomenon in which information on demand is transferred in the form of orders between the nodes of a supply chain tends to be distorted when it moves from downstream to upstream. In this paper, we measure the impact of bullwhip effect under Exponential Smoothing Forecast for a simple, two-stage supply chain which consists of one supplier and two retailers. And it is a simple replenishment system where a first-order autoregressive process describes the customer demand and an order-up-to inventory policy characterizes the replenishment decision. We get the influence of information distortion on the bullwhip effect through investigating the impacts of autoregressive coefficient, the lead-time, the smoothing parameter, market competition degree, and the consistency of demand volatility on the bullwhip effect by using algebraic analysis and numerical simulation. And, we also find the ways in which these parameters affect the bullwhip effect are different. Finally, we discuss some measures to mitigate the influence of information distortion on the bullwhip effect.
Search Articles
Keywords: Information distortion, Bullwhip effect, Complex Supply chain, Two retailers model, Exponential Smoothing
Pages: 110-125
WSEAS Transactions on Mathematics, ISSN / E-ISSN: 1109-2769 / 2224-2880, Volume 15, 2016, Art. #11