The Bullwhip Effect and its Suppression in Supply Chain Management

Flexibility dimensions to control the bullwhip effect in a supply chain

“…Is the correct countermeasure to the bullwhip effect the maximisation of stages' lead time, as proposed by many authors (for example Lee et al 1997, Chen et al 2000, Takahashi and Myreshka 2004, Geary et al 2006)? In Figure 3, we use Equations (13) and (14) to outline the amplification level as a function of lead time L, the stage position i and three values of (0.1, 0.7, 0.9).…”

“…Other causes/ principles, relevant in the framework of this article, are: the information transparency principle, which means avoiding noise and bias in ordering information; the synchronisation principle, indicating a continuous synchronised ordering throughout the chain; the demand forecast principle, preventing the introduction of 'noise' by this way; and the order batching principle, where synchronised retailer ordering is the only situation eliminating the bullwhip effect. Takahashi and Myreshka (2004) extensively studied sources of the bullwhip effect, as presented by Lee et al (1997), and proposed several counter-measures on the demand, ordering process and supply sides. Some of the suggested measures are: information sharing; single control of replenishment; lead-time reduction; appropriate forecasting methods, or even elimination of forecasting; application of pull or hybrid methods to provide good strategies to diminish amplification.…”

“…This will be called the reference model M. We are going to consider a periodic system (Takahashi and Myreshka 2004). Then, in this system, the ith production stage periodically receives an order O i .…”

Bullwhip-Effect and Flexibility in Supply Chain Management

“…This will be called the reference model M (Pereira and Paulre, 2001). Let us consider a periodic ordering method managing the production levels on each stage of the supply chain (Takahashi and Myreshka, 2004). Then, the i-th production stage periodically receives an order O i , which defines how many units of the item stocked in B i need to be processed and further stocked in B i−1 .…”

“…Among them, the time compression principle suggests that the most relevant principle to achieve this goal is the existence of an optimal minimum lead time. Takahashi and Myreshka (2004) extensively studied sources of bullwhip-effect and proposed several counter-measures for the demand, ordering process and supply sides. Some of these counter-measures are: sharing information about inventory and production levels among stages along the chain, controlling inventory replenishment by a single method, reducing the lead-time, designing appropriate forecasting methods (or eliminating forecasting practices) and implementing pull or hybrid methods.…”