IDEAS home Printed from https://ideas.repec.org/a/sen/rebelj/v57i3y2012p381-393.html
   My bibliography  Save this article

The Return of the Bullwhip

Author

Listed:
  • A.G. De Kok

Abstract

In this paper we present a two-echelon inventory system consisting of a warehouse that does not hold stock, and multiple retailers. The demand at the retailers is stationary and demand per period is normally distributed. The retailers forecast demand using single exponential smoothing, leading to dynamic demand forecasts. Thus the retailers use dynamic inventory control policies aimed at achieving a target service level. The dynamic policies are based on covering the forecasted demand over the lead time plus some safety time. The safety time is the control parameter to be determined, such that the target service level is met. This model allows us to study the impact of demand information distortion due to forecasting on the safety stock requirements of the retailers. We derive explicit expressions for the control policies and the safety time parameters. We introduce a new amplification factor ? that measures the relative increase in safety time requirements under demand information distortion due to the exponential smoothing with parameter ?. We derive quantitative and qualitative insights into the impact of the model parameters on the safety time amplification factor ?. We show that under demand distortion it may be favorable to reduce the review frequency.

Suggested Citation

  • A.G. De Kok, 2012. "The Return of the Bullwhip," Review of Business and Economic Literature, Intersentia, vol. 57(3), pages 381-393, September.
    • Handle: RePEc:sen:rebelj:v:57:i:3:y:2012:p:381-393
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. Udenio, Maximiliano & Fransoo, Jan C. & Peels, Robert, 2015. "Destocking, the bullwhip effect, and the credit crisis: Empirical modeling of supply chain dynamics," International Journal of Production Economics, Elsevier, vol. 160(C), pages 34-46.
    2. Li Chen & Wei Luo & Kevin Shang, 2017. "Measuring the Bullwhip Effect: Discrepancy and Alignment Between Information and Material Flows," Manufacturing & Service Operations Management, INFORMS, vol. 19(1), pages 36-51, February.

    More about this item

    Statistics

    Access and download statistics

    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:sen:rebelj:v:57:i:3:y:2012:p:381-393. 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: Petra Van den Bempt (email available below). General contact details of provider: http://www.rebel-journal.org/ .

    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.