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Distortional Bullwhip Effects on carriers

Author

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  • Haughton, Michael A.

Abstract

This paper analyzes the Bullwhip Effect (BWE) problem from the (carriers') viewpoint. The analysis explores how retailer's limited capability to forecast end-customer demand and their sub-optimal replenishment policies distort service demand signals to carriers. The consequent unnecessary increases in carriers' capacity costs and operational instability are quantified for a context of pronounced seasonality. The paper finds that carriers unable to adjust transportation capacity to seasonal changes can incur costs of nearly five times what is possible with maximum forecasting capabilities and prudent replenishment policies. Another major finding is that replenishment policy is superior to forecasting capability in reducing BWE-related costs.

Suggested Citation

  • Haughton, Michael A., 2009. "Distortional Bullwhip Effects on carriers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(1), pages 172-185, January.
    • Handle: RePEc:eee:transe:v:45:y:2009:i:1:p:172-185
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    Citations

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    Cited by:

    1. Chatfield, Dean C. & Pritchard, Alan M., 2013. "Returns and the bullwhip effect," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 49(1), pages 159-175.
    2. Nguyen, Duy Tan & Adulyasak, Yossiri & Landry, Sylvain, 2021. "Research manuscript: The Bullwhip Effect in rule-based supply chain planning systems–A case-based simulation at a hard goods retailer," Omega, Elsevier, vol. 98(C).
    3. Wang, Xun & Disney, Stephen M., 2016. "The bullwhip effect: Progress, trends and directions," European Journal of Operational Research, Elsevier, vol. 250(3), pages 691-701.
    4. Dominguez, Roberto & Cannella, Salvatore & Framinan, Jose M., 2015. "On returns and network configuration in supply chain dynamics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 152-167.
    5. Cantor, David E. & Katok, Elena, 2012. "Production smoothing in a serial supply chain: A laboratory investigation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 781-794.

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