Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

Narayanan, Arunachalam; Moritz, Brent

doi:10.1111/poms.12343

Cited by 82 publications

(89 citation statements)

References 62 publications

(245 reference statements)

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“…However, using the classical beer game, Croson and Donohue (2006) find evidence of the bullwhip effect in laboratory experiments, even when the demand distribution is shared and all other causes are removed. They attribute this phenomenon to "underweighting the supply line," reported also by Sterman (1989), Niranjan et al (2011), Bloomfield and Kulp (2013), Croson et al (2014), and Narayanan and Moritz (2015), where players may not account for the previous orders that have not yet been received from their supplier ("onorder quantity" in this study) when placing orders in the next period.…”

Section: Bullwhip Effectmentioning

confidence: 83%

Does Forecast‐Accuracy‐Based Allocation Induce Customers to Share Truthful Order Forecasts?

Pekgün

Park

Keskinocak

et al. 2019

Production and Operations Management

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Through a behavioral study, we investigate buyers’ strategic order forecasting behavior in a multi‐period setting under a forecast accuracy‐based allocation policy, where the supplier allocates (proportionally) more inventory to the buyer with the better order forecast accuracy in case of scarce supply. We developed an interactive game that simulates a supply chain in which one supplier sells a key component to two buyers, who in turn sell to consumers. In each period, buyers share forecasts of future orders with their supplier. The participants in the game play the role of a buyer, while the supplier is automated. Our experimental findings suggest that rewarding forecast accuracy in allocating inventory can significantly improve the order forecast accuracy of the buyers and reduce their forecast inflation behavior. Interestingly, even without communication of the policy, buyers learn over time that more accurate forecasts lead to better service from their supplier and improve their order forecast accuracy.

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Section: Bullwhip Effectmentioning

confidence: 83%

Does Forecast‐Accuracy‐Based Allocation Induce Customers to Share Truthful Order Forecasts?

Pekgün

Park

Keskinocak

et al. 2019

Production and Operations Management

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show abstract

“…This has been investigated in different contexts including the behavior of managers versus students (Bolton, Ockenfels, & Thonemann, ), females versus males (De Véricourt, Jain, Bearden, & Filipowicz, ), and Chinese versus Americans (Cui, Chen, Chen, Gavirneni, & Wang, ). Another class of studies explores the behavioral causes of the bullwhip effect in the supply chain (e.g., Croson & Donohue, ; Croson, Donohue, Katok, & Sterman, ; Narayanan & Moritz, ; Tokar et al., ) and solutions to mitigate the identified behavioral risks (Wu & Katok, ; Tokar, Aloysius, & Waller, ).…”

Section: Literature Classification Based On Operations Contextsmentioning

confidence: 99%

Behavioral Operations and Supply Chain Management–A Review and Literature Mapping

et al. 2019

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Behavioral operations research has proliferated greatly over the decade since its first formal review in 2006. The growth of the field warrants an objective mapping of contributions to the literature and the identification of trends. We conduct a systematic review of the literature of behavioral operations and supply chain management (BOSCM) across eight key operations and supply chain management journals, with publication dates through the end of June 2018. Collected articles are categorized into 12 operations contexts as well as emerging topic considerations. Key research trends, theoretical foundations, and methodological choices are discussed in each context. The results show that supply chain management, inventory management, and procurement/auctions have been the most popular operations contexts for BOSCM researchers. The results of our co‐citation analysis shows that the fundamental research areas that have informed and shaped the field include supply chain risk management, marketing, cognitive psychology, and social psychology. Based on these findings and a survey of the most prolific authors in the field, we discuss possible avenues for future research.

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“…Croson et al (2014) conduct experiments with the Beer Game and suggest coordination risk as an additional behavioral cause. More recently, Narayanan and Moritz () consider the role of subjects’ cognitive profile on the bullwhip effect, while Villa et al . () find that a retailer facing shortages in a competitive environment will amplify its orders to a supplier following an anchoring and adjustment heuristic.…”

Section: Literature Reviewmentioning

confidence: 99%

From boom to bust: an operational perspective of demand bubbles

Gonçalves¹

2018

System Dynamics Review

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When demand exceeds supply, retailers hedge against shortages by placing multiple orders with multiple suppliers, exceeding customer demand and leading to excess capacity, excess inventory, low capacity utilization and financial losses. This paper provides a comprehensive causal loop diagram and a formal mathematical model of a subset of supplier-retailer relationships. We obtain closed-form solutions when supplier capacity is fixed, and analyze simulation dynamics when it is variable. Sensitivity analyses provide a deeper understanding of parameters that contribute to demand bubbles and insight on improvement policies. For instance, the ability of the supplier to build capacity quickly can reduce bubble size. The time it takes retailers to perceive and react to supply availability is an important lever in controlling demand bubbles. When retailers learn of shortages with a delay, their reaction is also delayed, which stabilizes the supply chain.While not an experimental study, Barlas and Gunduz (2011) also find that sharing information significantly reduces the bullwhip effect. Their research using system dynamics finds that policies that share demand and forecast information are very effective in reducing order amplification. P. Gonçalves: From Boom to Bust 393

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Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

Cited by 82 publications

References 62 publications

Does Forecast‐Accuracy‐Based Allocation Induce Customers to Share Truthful Order Forecasts?

Does Forecast‐Accuracy‐Based Allocation Induce Customers to Share Truthful Order Forecasts?

Behavioral Operations and Supply Chain Management–A Review and Literature Mapping

From boom to bust: an operational perspective of demand bubbles

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