Bullwhip effect metrics for multi-echelon systems under order batching policies with cyclic demand

Abstract

This paper analyzes how order batching policies impact on the bullwhip effect over a multi-echelon distribution supply chain facing cyclic demand. As a demand cycle is repeated over the time planning horizon, a wrapping around operator is considered and based on this a single cycle is required to represent the real problem. The problem consists on determining the optimal reordering plan, which minimizes the overall system operational costs while investigating which bullwhip measures are more adequate to control such type of systems. A mixed integer linear programming model is developed, which considers a multi-echelon inventory/distribution system formed by N-warehouses and M-retailers with lateral transshipments among warehouses and among retailers. A case study based on a real retailer distribution chain are presented and solved.