A generalized measure of bullwhip effect in supply chain with ARMA demand process under various replenishment policies

Abstract

The measure of bullwhip effect (BWE) has always been a challenging task to the researchers. BWE is one of the main performance measures for a supply chain. In the existing literature, the measurement of BWE has been performed based on the simple demand processes such as Moving Average, AR(1) (AutoRegression), AR(2), Exponential Smoothing and ARMA(1,1) (AutoRegressive Moving Average). In this paper, we have derived generalized expressions of BWE based on the generalized ARMA (p,q) demand process under the various replenishment policies. The expressions have been compared both algebraically and numerically in order to find out the appropriate replenishment policy that leads to minimum valued expression for BWE.