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The Sensitivity Analysis of the Bullwhip Effect in A Three-Level Supply Chain with Stochastic Demands and Lead Times
Conference
Proceedings of the 2nd International Conference on Operations and Supply Chain Management
Publisher(s)
University of the Thai Chamber of Commerce
Date Issued
2007
Author(s)
Abstract
In a real-world supply chain (SC), when each party manages its organization without any coordination to the others, the so-called “Bullwhip Effect” (BWE) happens; variances of ordering patterns move up the SC from retailers, to distributors, to manufacturers, and then to suppliers. Our goal is to quantify the extent of the bullwhip effect. We develop a three-level SC simulation model with stochastic demands and lead times where periodic order-up-to level inventory policies are used. We build our model in Arena (Rockwell Software). There are two retailers, a distributor and a supplier in the model. Customers, with random demands, purchase goods only from retailers. A supplier has an infinite supply. No backorder is allowed, and unfilled demands are lost. We use factorial design where factors are: mean of demand, standard deviation of demand, mean of lead time, standard deviation of lead time, time between inventory reviews, and multiple of lot size. We use ANOVA to determine what SC factors significantly contribute to the BWE.
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Rights Holder(s)
University of the Thai Chamber of Commerce
Bibliographic Citation
Natnicha Khumwan, Juta Pichitlamken (2007) The Sensitivity Analysis of the Bullwhip Effect in A Three-Level Supply Chain with Stochastic Demands and Lead Times.
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Sep 29, 2023
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