The variability of replenishment orders tends to increase as one moves up the supply chain, causing the bullwhip effect (Figure 1). The presence of the bullwhip effect in supply chains leads to severe consequences such as stock outs, low service level, and extra transportation and capacity costs. Lee identified five operational causes of the bullwhip effect: demand signal processing, lead-time, order batching, price fluctuations and rationing and shortage gaming. Extensive modeling studies have quantified the impact of these causes utilizing three modeling approaches: simulation modeling, statistical modeling, and control theoretic. Read More….
Citation: Shaban A, Costantino F, Gravio GD, Tronci M (2015) Managing the Bullwhip Effect in Multi-Echelon Supply Chains. Ind Eng Manage 4:e128.
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