A type-2 fuzzy system model for reducing bullwhip effects in supply chains and its application in steel manufacturing

Abstract

The purpose of this paper is to evaluate and reduce the bullwhip effect in fuzzy environments by means of type-2 fuzzy methodology. In order to reduce the bullwhip effect in a supply chain, we propose a new method for demand forecasting. First, the demand data of a real steel industry in Canada is clustered with an interval type-2 fuzzy c-regression clustering algorithm. Then, a novel interval type-2 fuzzy hybrid expert system is developed for demand forecasting. This system uses Fuzzy Disjunctive Normal Forms (FDNF) and Fuzzy Conjunctive Normal Forms (FCNF) for the aggregation of antecedents. An interval type-2 fuzzy order policy is developed to determine orders in the supply chain. Then, the results of the proposed method are compared with the type-1 fuzzy expert system as well as the type-1 fuzzy time series method in the literature. The results show that the bullwhip effect is significantly reduced; also, the system has less error and high accuracy.