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Development of Analytical Tools for the Bullwhip Effect Control in Supply Chains : Quantitative Models and Decision Support System  

Shim, Kyu-Tak (Department of Industrial Engineering, College of Advanced Engineering, Kyung Hee University)
Park, Yang-Byung (Department of Industrial Engineering, College of Advanced Engineering, Kyung Hee University)
Publication Information
Journal of Korean Society of Industrial and Systems Engineering / v.32, no.1, 2009 , pp. 117-129 More about this Journal
Abstract
The bullwhip effect is known as the significant factor which causes unnecessary inventory, lost sales or cost increase in supply chains. Therefore, the causes of the bullwhip effect must be examined and removed. In this paper, we develop two analytical tools for the bullwhip effect control in supply chains. First, we develop the quantitative models for computing the bullwhip effect in a three-stage supply chain consisted of a single retailer, a single distributor and a single manufacturer when the fixed-interval replenishment policy is applied at each stage. The quantitative models are developed under the different conditions for the demand forecasting and share of customer demand information. They are validated through the computational experiments. Second, we develop a simulation-based decision support system for the bullwhip effect control in a more diverse dynamic supply chain environment. The system includes a what-if analysis function to examine the effects of varying input parameters such as operating policies and costs on the bullwhip effect.
Keywords
SCM; Bullwhip Effect; Quantitative Models; Decision Support System; Computer Simulation;
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