In Search of the Bullwhip Effect

Cachon, Gérard P.; Randall, Taylor; Schmidt, Glen M.

doi:10.1287/msom.1060.0149

Cited by 273 publications

(265 citation statements)

References 44 publications

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“…This amplification effect is not only observed in aggregate trade, but also across industries. This is in line with the bullwhip effect that is often witnessed in global supply chains (Lee, Padmanabhan and Wang, 1997;Cachon, Randall and Schmidt, 2007). When a drop in final demand reduces downstream activities, a firm's first reaction is to run down its inventories.…”

Section: Electronics Trade and Asia-pacific Interdependencesupporting

confidence: 73%

Global Production Networks in Electronics and Intra-Asian Trade

Gangnes

Assche

2010

SSRN Journal

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The growth of East Asia's intra-regional trade is driven largely by increased component trade within global electronics production networks. Data on both electronics trade and production elucidate a pattern of specialization in which upper-and middle-income countries produce sophisticated components and lower-income countries assemble lowervalue-added final goods. There is evidence of increasing sophistication within the electronics sector by the Newly Industrialized Economies and to a lesser extent by ASEAN countries. Despite the marked increase in intra-regional trade, developing East Asian countries remain heavily dependent on developed-country markets. When Western export demand rapidly contracted during the 2008-2009 economic crisis, these specialization patterns led the rapid diffusion of the business cycle shock throughout the East Asian region.

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Section: Electronics Trade and Asia-pacific Interdependencesupporting

confidence: 73%

Global Production Networks in Electronics and Intra-Asian Trade

Gangnes

Assche

2010

SSRN Journal

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“…We add to this stream of research by linking other factors associated with production and scheduling that are associated with finished-goods inventory. Several papers explore inventory at the industry level with a focus on either the long-run trend in inventory (e.g., Chen et al 2005, Rajagopalan andMalhotra 2001) or the volatility of production relative to sales (e.g., Cachon et al 2007)-we do not consider either of those issues in our study. There is a growing literature that explores firm-level inventory rather than that at the product/model level as we do.…”

Section: Literature Reviewmentioning

confidence: 99%

Drivers of Finished-Goods Inventory in the U.S. Automobile Industry

2010

Self Cite

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A utomobile manufacturers in the U.S. supply chain exhibit significant differences in their days of supply of finished vehicles (average inventory divided by average daily sales rate). For example, from 1995 to 2004, Toyota consistently carried approximately 30 fewer days of supply than General Motors. This suggests that Toyota's well-documented advantage in manufacturing efficiency, product design, and upstream supply chain management extends to their finished-goods inventory in their downstream supply chain from their assembly plants to their dealerships. Our objective in this research is to measure for this industry the effect of several factors on inventory holdings. We find that two factors, the number of dealerships in a manufacturer's distribution network and a manufacturer's production flexibility, explain essentially all of the difference in finished-goods inventory between Toyota and three other manufacturers: Chrysler, Ford, and General Motors.

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“…Cachon et al made observations and evaluated the strength of the bullwhip effect in U.S. industry [21] using official data from period 1992-2006. They did not observe the bullwhip effect among retailers and among manufacturers, but the majority of wholesalers amplified.…”

Section: Literature Reviewmentioning

confidence: 99%

Analysis of a Three-Stage Supply Chain with Level Constraints

Buchmeister¹,

Friscic²,

Lаlić³

et al. 2012

Int. j. simul. model.

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Many companies have enjoyed a significant success due to the unique ways in which they have organized their supply chains, which are one of the best ways to compete in today's marketplaces. For make-to-stock production systems the production plans and activities are based on demand forecasting. This is one of the key causes of the bullwhip effect. The bullwhip effect (BE) is the inherent increase in demand fluctuation up the supply chain. In the paper we experimented (by simulating) with a special case of a simple three-stage supply chain using seasonal and deseasonalized time series of the market demand data in order to identify, illustrate and discuss the impacts of different level constraints on the BE. The results are presented for different overall equipment effectiveness (OEE) and constrained inventory policies. At higher OEE level there is less variability in production processes, but at inventory limitations the impact is more complex.

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In Search of the Bullwhip Effect

Cited by 273 publications

References 44 publications

Global Production Networks in Electronics and Intra-Asian Trade

Global Production Networks in Electronics and Intra-Asian Trade

Drivers of Finished-Goods Inventory in the U.S. Automobile Industry

Analysis of a Three-Stage Supply Chain with Level Constraints

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