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Title: The Sensitivity Analysis of the Bullwhip Effect in A Three-Level Supply Chain with Stochastic Demands and Lead Times
Authors: Khumwan, Natnicha 
Pichitlamken, Juta
Issue Date: 2007
Publisher: University of the Thai Chamber of Commerce
Source: Natnicha Khumwan, Juta Pichitlamken (2007) 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 
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.
Rights: This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
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