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Empirical Assessment of Bullwhip Effect in Supply Networks

Author

Listed:
  • Dazhong Wu

    (University of the District of Columbia, USA)

  • Joe Teng

    (Troy University, USA)

  • Sergey Ivanov

    (University of the District of Columbia, USA)

  • Julius Anyu

    (University of the District of Columbia, USA)

Abstract

Previous empirical studies on bullwhip effects treat each industry or firm as isolated from its supply chain network. In this paper, the authors are interested in the role played by supply chain relational connection in moderating how demand variability signal is transmitted upstream. The paper conducts an empirical study based on a panel data of 55 manufacturing industries and 9 wholesale industries. The regression analysis shows that demand variability is propagated through supply chain upward and the transmission is influenced by the structural relationship between suppliers and customers, which is measured by customer-base concentration and customer interconnectedness. On the other hand, customer demand variability has a greater impact on industries with less concentrated customer base or with less interconnected customers.

Suggested Citation

  • Dazhong Wu & Joe Teng & Sergey Ivanov & Julius Anyu, 2021. "Empirical Assessment of Bullwhip Effect in Supply Networks," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 14(2), pages 69-87, April.
    • Handle: RePEc:igg:jisscm:v:14:y:2021:i:2:p:69-87
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    Cited by:

    1. Lusheng Shao & Derui Wang & Xiaole Wu, 2023. "Competitive Forward and Spot Trading Under Yield Uncertainty," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 214-228, July.
    2. Jing Wu & Zhaocheng Zhang & Sean X. Zhou, 2022. "Credit Rating Prediction Through Supply Chains: A Machine Learning Approach," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1613-1629, April.
    3. Haoyuan Ding & Yichuan Hu & Han Jiang & Jing Wu & Yu Zhang, 2023. "Social embeddedness and supply chains: Doing business with friends versus making friends in business," Production and Operations Management, Production and Operations Management Society, vol. 32(7), pages 2154-2172, July.
    4. Baron, Opher & Callen, Jeffrey L. & Segal, Dan, 2023. "Does the bullwhip matter economically? A cross-sectional firm-level analysis," International Journal of Production Economics, Elsevier, vol. 259(C).
    5. Bin Li & Onur Boyabatlı & Buket Avcı, 2023. "The Impact of Commodity Price Uncertainty on the Economic Value of Waste-to-Energy Conversion in Agricultural Processing," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 229-249, July.
    6. Senay Agca & Volodymyr Babich & John R. Birge & Jing Wu, 2022. "Credit Shock Propagation Along Supply Chains: Evidence from the CDS Market," Management Science, INFORMS, vol. 68(9), pages 6506-6538, September.
    7. Mu-Shu Yun & Ko-Chia Yu, 2024. "Vertical propagation of default risk along the supply chain," Review of Quantitative Finance and Accounting, Springer, vol. 63(1), pages 63-85, July.
    8. Selvaprabu Nadarajah, 2023. "Corporate Renewable Procurement Analytics," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 250-266, July.
    9. Giovanna Culot & Matteo Podrecca & Guido Nassimbeni & Guido Orzes & Marco Sartor, 2023. "Using supply chain databases in academic research: A methodological critique," Journal of Supply Chain Management, Institute for Supply Management, vol. 59(1), pages 3-25, January.
    10. Jing Hou & Burak Kazaz & Fasheng Xu, 2023. "Blockchain-Based Digital Payment Obligations for Trade Finance," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 267-287, July.
    11. Panos Kouvelis & Hirofumi Matsuo & Yixuan Xiao & Quan Yuan, 2023. "Long-Term Service Agreement in Power Systems," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 288-303, July.
    12. Jie Peng & Boluo Liu & Jing Wu & Xiangang Xin, 2024. "Financial statement comparability and global supply chain relations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(3), pages 342-360, April.
    13. Dass, Mayukh & Reshadi, Mehrnoosh & Li, Yuewu, 2023. "An exploration of ripple effects of advertising among major suppliers in a supply chain network," Journal of Business Research, Elsevier, vol. 169(C).
    14. Wang, Jiepeng & Zhou, Hong & Sun, Xinlei & Yuan, Yufei, 2023. "A novel supply chain network evolving model under random and targeted disruptions," Chaos, Solitons & Fractals, Elsevier, vol. 170(C).
    15. Peng Liang & Hasan Cavusoglu & Nan Hu, 2023. "Customers’ managerial expectations and suppliers’ asymmetric cost management," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1975-1993, June.
    16. Jiang Shenyang & Jiang Zhibin & Niu Yimeng & Wu Jing, 2023. "The Impact of Servicization of Manufacturing Firms on Bullwhip Effects," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 304-317, July.
    17. Oben Ceryan & Florian Lücker, 2023. "Disruption Mitigation and Pricing Flexibility," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 177-192, July.
    18. Sining Song & Yan Dong & Thomas Kull & Craig Carter & Kefeng Xu, 2023. "Supply chain leakage of greenhouse gas emissions and supplier innovation," Production and Operations Management, Production and Operations Management Society, vol. 32(3), pages 882-903, March.
    19. Haichao Fan & Guangyuan Guo & Dongmin Hu, 2023. "Impact of U.S. Tariffs on Chinese Firms' Outward Connection," Annals of Economics and Finance, Society for AEF, vol. 24(2), pages 363-375, November.
    20. Paolo Guiotto & Andrea Roncoroni, 2023. "Optimal Newsvendor IRM with Downside Risk," Foundations and Trends(R) in Technology, Information and Operations Management, now publishers, vol. 16(3-4), pages 193-213, July.

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