Abstract
The bullwhip effect refers to the phenomenon of demand distortion in a supply chain. By eliminating or con- trolling this effect, it is possible to increase product profitability. The main focus of this work is to apply a control tech- nique, based on the divergence of system, to reduce the bullwhip effect in a single-product one echelon supply chain, in which an Order-Up-To (OUT) order policy is applied. First the relationships between bullwhip, stability of the supply chain and the total costs are analyzed. Second the divergence-based control strategy is applied to stabilize the supply chain dynamics with a considerable reduction of the total costs (> 30%) and, in relevant cases, of the bullwhip effect.
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