Study of the Bullwhip Effect in a Multistage Supply Chain with Callback Structure considering Two Retailers

Junhai Ma,Shunqi Hou,Liqing Zhu,Ye Yuan

doi:10.1155/2018/3650148

Abstract

With the purpose of researching the bullwhip effect when there is a callback center in the supply chain system, this paper establishes a new supply chain model with callback structure, which has a material supplier, a manufacture, and two retailers. The manufacture and retailers all employ AR(1) demand processes and use order-up-to inventory policy when they make order decisions. Moving average forecasting method is used to measure the bullwhip effect of each retailer and manufacture. We investigate the impact of lead-times of retailers and manufacture, forecasting precision, callback index, and marketing share on the bullwhip effect of both retailers and manufacture. Then we use the method of numerical simulation to indicate the different parameters in this supply chain. Furthermore, this paper puts forward some suggestions to help the enterprises to control the bullwhip effect in the supply chain with callback structure.

Highlights

Bullwhip effect is a major issue that threats the stable and smooth performance of inventory, cost, and information of different layers of participants
We investigate the impact of lead-times of retailers and manufacture, forecasting precision, callback index, and marketing share on the bullwhip effect of both retailers and manufacture
We can see that the call back factor is very important for the bullwhip effect on a reverse supply chain

Summary

Introduction

Bullwhip effect is a major issue that threats the stable and smooth performance of inventory, cost, and information of different layers of participants. Luong develops a measure of bullwhip effect for a simple two-stage supply chain that includes only one retailer and one supplier in the environment where the retailer employs base stock policy for their inventory and demand forecast is performed through the first-order autoregressive model, AR(1) [14]. This paper studies callback system’s impact on bullwhip effect from the aspect of the order of retailer and manufacturer and offers theoretical support to detailed control measures in multilevel supply chain. It divides the traditional demand market in line with certain market share, to probe into the mutual influence and differentiation among several retailers. Si,t: order-up-to level of retailer i at period t Dili,t: forecast of the lead-time demand of retailer i at period t σil,it: standard deviation of forecasting errors on the lead-time demand of retailer i at period t

Supply Chain Model

Measure of the Bullwhip Effect

The Behavior of the Bullwhip Effect Measure and Numerical Simulation

Conclusion