zbMATH — the first resource for mathematics

The effect of replenishment policies on the bullwhip effect: a transfer function approach. (English) Zbl 1141.90445
Eur. J. Oper. Res. 184, No. 3, 946-961 (2008); errata 188, No. 1, 313 (2008).
Summary: An important phenomenon in supply chain management, known as the bullwhip effect, suggests that demand variability increases as one moves up a supply chain. This paper examines the influence of different replenishment policies on the occurrence of the bullwhip effect. The paper demonstrates that certain replenishment policies can in themselves be inducers of the bullwhip effect, while others inherently lower demand variability. The main causes of increase in variability are projections of future demand expectations, which result in over-exaggerated responses to changes in demand. We suggest that through appropriate selection and use of certain replenishment rules, the bullwhip effect can be avoided, subsequently allowing supply chain management costs to be lowered.

90B50 Management decision making, including multiple objectives
Full Text: DOI
[1] Baganha, P.M.; Cohen, A.M., Stabilizing effect of inventory in supply chains, Operations research, 46, 3, S72-S83, (1998) · Zbl 0987.90003
[2] Bai, L.; Tsui, Y., Modified order-up-to level of AR(1) demand, Transportation research part E, 37, 35-54, (2001)
[3] Bowman, E.H., Consistency and optimality in managerial decision making, Management science, 9, 310-321, (1963)
[4] Chen, Quantifying the bullwhip effect in a simple supply chain: the impact of forecasting, lead times, and information, Management science, 46, 3, 436-443, (2000) · Zbl 1231.90019
[5] D’Azzo, J.J.; Houpis, H.C., Feedback control systems analysis & synthesis, (1966), McGraw-Hill Book Company New York, International Student Edition, 824p · Zbl 0145.12403
[6] Dejonckheere, J. et al., 2002a. Measuring and avoiding the bullwhip effect: A control theoretic approach. European Journal of Operational Research, unpublished, 24p. · Zbl 1026.90030
[7] Dejonckheere, J., Transfer function analysis of forecasting induced bullwhip in supply chains, International journal of production economics, 78, 133-144, (2002)
[8] Forrester, J., Industrial dynamics, (1961), MIT Press and John Wiley and Sons Cambridge, MA, New York
[9] Houpis, H.C.; Lamont, B.G., Digital control systems, (1985), McGraw-Hill Book Company New York, 667 p
[10] Jakšič, M., 2003. Analiza učinka biča pri periodičnih sistemih uravnavanja zalog z uporabo metodologije prenosne funkcije, magistrsko delo, Faculty of Economics, Ljubljana, 96 p.
[11] Lee, L.H.; Padmanabhan, V.; Whang, S., Information distortion in a supply chain: the bullwhip effect, Management science, 43, 4, 546-558, (1997) · Zbl 0888.90047
[12] Lee, L.H.; Padmanabhan, V.; Whang, S., The bullwhip effect in supply chains, (), 93-102
[13] Metters, R., Quantifying the bullwhip effect in supply chains, Journal of operations management, 15, 89-100, (1997)
[14] Silver, A.E.; Peterson, R., Decision systems for inventory management and production planning, (1985), John Wiley & Sons New York, 716 p
[15] Simon, H.A., On the application of servomechanism theory in the study of production control, Econometrica, 20, 247-268, (1952) · Zbl 0046.37804
[16] Sterman, J.D., Modeling managerial behavior: misperceptions of feedback in a dynamic decision making experiment, Management science, 35, 3, 321-339, (1989)
[17] Towill, R.D., 1999. Fundamental theory of bullwhip induced by exponential smoothing algorithm. MASTS Occasional Paper No. 61, Cardiff University.
[18] Xu, K.; Dong, Y.; Evers, T.P., Towards better coordination of the supply chain, Transportation research part E, 37, 35-54, (2001)
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.