Mitigation of Bullwhip Effect in Supply Chain Inventory Management Model

Abstract

This article starts with the reasons to bullwhip effect phenomenon, analyzes how to enhance inventory management strategy to reduce the bullwhip effect in supply chain management. And then, we study the case of McDonald's and its third-party logistics system HAVI cooperation to explore the cooperation mode between the two companies. Assuming that McDonald's stores as a logistics activities supply chain leader adopts the upper and lower inventory management strategy, according to the HAVI's distribution for McDonald's stores, we develop a one-multi distribution model, and build a mathematical model for reducing inventory and improve service level.