The bullwhip effect on inventory under different information sharing settings based on price-sensitive demand

Information sharing (IS) is proved to be a valid method to counter demand variability amplification along the supply chain, or bullwhip effect (BWE). Different from the traditional way of measuring the BWE based on order quantity, we measure the BWE on inventory in different IS settings and try to f...

Full description

Saved in:
Bibliographic Details
Published in:International journal of production research 2016-07, Vol.54 (13), p.4043-4064
Main Authors: Wang, Nengmin, Lu, Jizhou, Feng, Gengzhong, Ma, Yungao, Liang, Huigang
Format: Article
Language:English
Subjects:
bullwhip effect
Demand
Economic models
Forecasting techniques
Information sharing
Inventories
Inventory
Inventory management
Lead time
Markets
MMSE forecasting technique
Order quantity
order-up-to policy
Pricing
Stockpiling
Supply chains
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Information sharing (IS) is proved to be a valid method to counter demand variability amplification along the supply chain, or bullwhip effect (BWE). Different from the traditional way of measuring the BWE based on order quantity, we measure the BWE on inventory in different IS settings and try to find the best IS approach. In this paper, the retailer will face the market demand which is price-sensitive, and the price follows a first-order autoregressive process. This demand model includes some indexes that can provide more useful managerial insights than previously studied parameters. Our study identifies the best IS setting under any conditions, and clarifies that the benefits of IS will be evident when the overall market product pricing process is highly correlated over time, the demand shocks to the retailer are high, the price sensitivity coefficient is small, the overall market shocks are low, the retailer's lead-time is long and the manufacturer's lead-time is short.
ISSN:0020-7543
1366-588X
DOI:10.1080/00207543.2016.1171418