Abstract
An important observation in supply chain management, popularly known as the bull-whip effect, suggests that demand variability increases as one moves up a supply chain. For example, empirical evidence suggests that the orders placed by a retailer tend to be much more variable than the customer demand seen by that retailer. This increase in variability propagates up the supply chain, distorting the pattern of orders received by distributors, manufacturers and suppliers.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Baganha, M. and M. Cohen, “The Stabilizing Effect of Inventory in Supply Chains,” To appear in Operations Research, 1995.
Caplin, A.S., “The Variability of Aggregate Demand with (S,s) Inventory Policies,” Econometrica, 53 (1985), 1396–1409.
Chen, R, J. K. Ryan and D. Simchi-Levi, “The Impact of Exponential Smoothing Forecasts on the Bullwhip Effect,” Working Paper, Northwestern University, 1998.
Chen, F., Z. Drezner, J. K. Ryan, and D. Simchi-Levi, “Quantifying the Bullwhip Effect in a Simple Supply Chain: The Impact of Forecasting, Leadtimes and Information,” Working Paper, Northwestern University, 1998.
Johnson, M.E., H.L. Lee, T. Davis and R. Hall (1995), Expressions for Item Fill Rates in Periodic Inventory Systems. Naval Research Logistics, 42, pp. 39–56.
Kahn, J., “Inventories and the Volatility of Production,” The American Economic Review, 77 (1987), 667–679.
Kaminsky, P. and D. Simchi-Levi, A New Computerized Beer Game: Teaching the Value of Integrated Supply Chain Management. To appear in the book Supply Chain and Technology Management. Hau Lee and Shu Ming Ng, eds., the Production and Operations Management Society, (1996).
Lee, H., P. Padmanabhan and S. Whang, “The Bullwhip Effect in Supply Chains,” Sloan Management Review, 38 (1997a), 93–102.
Lee, H., P. Padmanabhan and S. Whang, “Information Distortion in a Supply Chain: The Bullwhip Effect,” Management Science, 43 (1997b), 546–58.
Ryan, J. K., “Analysis of Inventory Models with Limited Demand Information,” Ph.D. Dissertation, Department of Industrial Engineering and Management Sciences, Northwestern University, 1997.
Sterman, J. D., “Modeling Managerial Behavior: Misperceptions of Feedback in a Dynamic Decision Making Experiment,” Management Science, 35 (1989), 321–339.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1999 Springer Science+Business Media New York
About this chapter
Cite this chapter
Chen, F., Drezner, Z., Ryan, J.K., Simchi-Levi, D. (1999). The Bullwhip Effect: Managerial Insights on the Impact of Forecasting and Information on Variability in a Supply Chain. In: Tayur, S., Ganeshan, R., Magazine, M. (eds) Quantitative Models for Supply Chain Management. International Series in Operations Research & Management Science, vol 17. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4949-9_14
Download citation
DOI: https://doi.org/10.1007/978-1-4615-4949-9_14
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-7246-2
Online ISBN: 978-1-4615-4949-9
eBook Packages: Springer Book Archive