Abstract
In this paper, the bullwhip effect in a two-stage supply chain with one supplier and two retailers is measured. The customer demand is assumed to be followed an AR(1) model and is forecasted at each retailer by using the minimum mean square error forecasting method. In addition, the retailers employ the base stock inventory policy. Among the findings of this research, it is interesting to note that the bullwhip effect in supply chains will be minimized as the retailers have the same market share.
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