Managing Supply Chain Demand Variability with Scheduled Ordering Policies
AbstractThis paper studies supply chain demand variability in a model with one supplier and Nretailers that face stochastic demand. Retailers implement scheduled ordering policies: Orders occur at fixed intervals and are equal to some multiple of a fixed batch size. A method is presented that exactly evaluates costs. Previous research demonstrates that the supplier's demand variance declines as the retailers' order intervals are balanced, i.e., the same number of retailers order each period. This research shows that the supplier's demand variance will (generally) decline as the retailers' order interval is lengthened or as their batch size is increased. Lower supplier demand variance can certainly lead to lower inventory at the supplier. This paper finds that reducing supplier demand variance with scheduled ordering policies can also lower total supply chain costs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 45 (1999)
Issue (Month): 6 (June)
supply chain management; multi-echelon inventory; bullwhip effect;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Miragliotta, Giovanni, 2006. "Layers and mechanisms: A new taxonomy for the Bullwhip Effect," International Journal of Production Economics, Elsevier, vol. 104(2), pages 365-381, December.
- Casaburi, Lorenzo & Minerva, G. Alfredo, 2011. "Production in advance versus production to order: The role of downstream spatial clustering and product differentiation," Journal of Urban Economics, Elsevier, vol. 70(1), pages 32-46, July.
- Yan, Xi Steven & Robb, David J. & Silver, Edward A., 2009. "Inventory performance under pack size constraints and spatially-correlated demand," International Journal of Production Economics, Elsevier, vol. 117(2), pages 330-337, February.
- Jain, Apurva, 2007. "Value of capacity pooling in supply chains with heterogeneous customers," European Journal of Operational Research, Elsevier, vol. 177(1), pages 239-260, February.
- Potter, Andrew & Disney, Stephen M., 2006. "Bullwhip and batching: An exploration," International Journal of Production Economics, Elsevier, vol. 104(2), pages 408-418, December.
- Chandra, Charu & Grabis, Janis, 2005. "Application of multi-steps forecasting for restraining the bullwhip effect and improving inventory performance under autoregressive demand," European Journal of Operational Research, Elsevier, vol. 166(2), pages 337-350, October.
- Ewing, Bradley T. & Thompson, Mark A., 2008. "Industrial production, volatility, and the supply chain," International Journal of Production Economics, Elsevier, vol. 115(2), pages 553-558, October.
- Dobos, Imre, 2011. "The analysis of bullwhip effect in a HMMS-type supply chain," International Journal of Production Economics, Elsevier, vol. 131(1), pages 250-256, May.
- Lai, Richard, 2005. "Bullwhip in a Spanish Shop," MPRA Paper 4758, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.