Publication
Title
A win-win solution for the bullwhip problem
Author
Abstract
An important supply chain research problem is the bullwhip effect where demand variability increases as one moves up the supply chain. This distorted information may lead to inefficiencies. In this article we suggest a remedy to reduce the bullwhip effect. We focus on an inventory replenishment rule that reduces the variability of upstream orders and generates a smooth order pattern. However, dampening the order variability has a negative impact on customer service due to an increased inventory variance. We resolve this conflicting issue by taking the impact of the replenishment rule on lead times into account. A smooth order pattern generates shorter and less variable (production/replenishment) lead times, introducing a compensating effect on the inventory levels. We show that by including endogenous lead times in our analysis, the order pattern can be smoothed to a considerable extent without increasing stock levels, resulting in a win-win solution for both supply chain echelons. Finally we discuss several order smoothing approaches from an industrial perspective and comment on how our results may influence these cases.
Language
English
Source (journal)
Production planning and control. - London
Publication
London : 2008
ISSN
0953-7287
Volume/pages
19:7(2008), p. 702-711
ISI
000261495000008
Full text (Publisher's DOI)
Full text (publisher's version - intranet only)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identification
Creation 29.02.2012
Last edited 26.09.2017
To cite this reference