Analysis of the bullwhip effect in multi-product, multi-stage supply chain systems–a simulation approach

Pilada Wangphanich · Sami Kara · Berman Kayis

80 citations0/0 files storedInternational Journal of Production Research

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Supply Chain and Inventory Management Quality and Supply Management Sustainable Supply Chain Management

Abstract

This research aims to develop a simulation approach based on system dynamics modelling (SDM) and adaptive network based fuzzy inference system (ANFIS) for quantifying and reducing the bullwhip effect in a multi-product, multi-stage supply chain. The proposed model is comprised of three groups of variables influencing the bullwhip effect, namely the structure of a supply chain network, supply chain contributions (ordering process in regular situation or when a supplier has a promotion or shortage gaming) and supply chain performances (the number of defects and ordering lead time). As a result, a two layer simulation model is developed with three generic models. The flexibility of this proposed approach is its ability to model various types of ordering policies which are basic inventory policies, material requirement planning (MRP) system and just in time (JIT) approach. The supply chain of a beverage company was selected to validate and demonstrate the flexibility of the proposed model. The findings of the proposed simulation model are consistent with the results obtained from the case study. The error magnitude of the bullwhip effect level varied between 0 and 9% resulting in bullwhip effect reductions of up to 92%. Accordingly, the bullwhip effect levels are significantly decreased by using the proposed simulation model.

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References

1989Modeling Managerial Behavior: Misperceptions of Feedback in a Dynamic Decision Making Experiment 1997The Bullwhip Effect In Supply Chains 1 2012Industrial Dynamics: A Major Breakthrough for Decision Makers 2000Supply Chain Inventory Management and the Value of Shared Information 2000Quantifying the Bullwhip Effect in a Simple Supply Chain: The Impact of Forecasting, Lead Times, and Information 1999Quantitative Models for Supply Chain Management 1999Value of Information in Capacitated Supply Chains 1997Quantifying the bullwhip effect in supply chains

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2020Modelling near-real-time order arrival demand in e-commerce context: a machine learning predictive methodology 2014Supply chain integration patterns and operational performance: a plant-level survey-based analysis 2011Bullwhip Effect in Supply Chains 2012A robust optimization approach to reduce the bullwhip effect of supply chains with vendor order placement lead time delays in an uncertain environment 2015The impact of the supply chain structure on bullwhip effect

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