IDEAS home Printed from https://ideas.repec.org/a/ids/eujine/v1y2007i3p241-265.html
   My bibliography  Save this article

Controlling bullwhip and inventory variability with the golden smoothing rule

Author

Listed:
  • Stephen M. Disney
  • Ingrid Farasyn
  • Marc R. Lambrecht
  • Denis R. Towill
  • Wim Van De Velde

Abstract

A major cause of supply chain deficiencies is the bullwhip effect. Supply chain managers experience this variance amplification in both inventory levels and replenishment orders. In this paper, we analyse a major cause of the bullwhip effect, namely the classical Order-Up-To (OUT) policy and suggest a remedy (a smoothing replenishment rule). In general, dampening variability in orders may have a negative impact on customer service due to increase in inventory variance. We quantify the variance of the Net Stock (NS) levels and compute the required safety stock as a function of the smoothing required. The contribution of this paper is the analysis of the tradeoff between bullwhip and inventory variance resulting in a 'golden smoothing rule'. The golden smoothing rule refers to the fact that the values of two proportional feedback controllers are set equal to the Golden Ratio. [Received 5 September 2006; Revised 22 January 2007; Accepted 13 March 2007]

Suggested Citation

  • Stephen M. Disney & Ingrid Farasyn & Marc R. Lambrecht & Denis R. Towill & Wim Van De Velde, 2007. "Controlling bullwhip and inventory variability with the golden smoothing rule," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 1(3), pages 241-265.
    • Handle: RePEc:ids:eujine:v:1:y:2007:i:3:p:241-265
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=14686
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dejian Yu & Zhaoping Yan, 2021. "Knowledge diffusion of supply chain bullwhip effect: main path analysis and science mapping analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(10), pages 8491-8515, October.
    2. Ciancimino, Elena & Cannella, Salvatore & Canca Ortiz, José David & Framiñán Torres, José Manuel, 2009. "Análisis multinivel de cadenas de suministros: dos técnicas de resolución del efecto bullwhip // Supply Chain Multi-level Analysis: Two Bullwhip Dampening Approaches," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 8(1), pages 7-28, December.
    3. Yu, Dejian & Yan, Zhaoping, 2023. "Main path analysis considering citation structure and content: Case studies in different domains," Journal of Informetrics, Elsevier, vol. 17(1).
    4. K. Devika & A. Jafarian & A. Hassanzadeh & R. Khodaverdi, 2016. "Optimizing of bullwhip effect and net stock amplification in three-echelon supply chains using evolutionary multi-objective metaheuristics," Annals of Operations Research, Springer, vol. 242(2), pages 457-487, July.
    5. Ciancimino, Elena & Cannella, Salvatore & Bruccoleri, Manfredi & Framinan, Jose M., 2012. "On the Bullwhip Avoidance Phase: The Synchronised Supply Chain," European Journal of Operational Research, Elsevier, vol. 221(1), pages 49-63.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:eujine:v:1:y:2007:i:3:p:241-265. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=210 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.