Quantifying the Bullwhip Effect in a Simple Supply Chain: The Impact of Forecasting, Lead Times, and Information

An important observation in supply chain management, known as the bullwhip effect, suggests that demand variability increases as one moves up a supply chain. In this paper we quantify this effect for simple, two-stage supply chains consisting of a single retailer and a single manufacturer. Our model includes two of the factors commonly assumed to cause the bullwhip effect: demand forecasting and order lead times. We extend these results to multiple-stage supply chains with and without centralized customer demand information and demonstrate that the bullwhip effect can be reduced, but not completely eliminated, by centralizing demand information.

• 저널Management Science · 46(3) · 436–443
• 토픽Supply Chain and Inventory Management · Management Information Systems
• DOI10.1287/mnsc.46.3.436.12069
• 저자Frank Chen, Zvi Drezner, Jennifer K. Ryan, David Simchi‐Levi