Influence of Inventory Changes to Bullwhip Effect on Private Industrial Network

Abstract

This article presents a mathematical model to compute the influence of inventory changes to bullwhip effect on the case of the private industrial network that consists of four stages. Sequentially, in each stage, there is 6 Supplier companies, Manufacturer company, 3 Distributors companies, and 6 Retailer. Each company has an inventory of product or component with the value of maximal, minimal, safety stock, and initial of it. By pull inventory system for replenishment and production of product and component, as well using the parameter on data set, the work in this article computes the inventory on Retailers, Distributors, Manufacturer, and Suppliers (upstream companies to downstream companies). Next, the work compares the bullwhip effect of inventory on each company for every stage, which based on fixed parameters on data set and sensitivity analysis on the value of maximal, minimal, safety stock, and initial for inventory. Results showed that by performing the sensitivity analysis could find the values of inventories so that the bullwhip effect occurs not cause the inventory shortage on each company. In addition, these values of inventories can change the average of the minimum inventory to be positive, the maximum inventory decreased, and availability and the total number of shortages on the PIN become not occur.