The Analysis of Bullwhip Effect in Supply Chain Based on Strategic Alliance

Abstract

Bullwhip effect is a widespread and serious problem in supply chain management, both domestic and foreign scholars studied and came to a conclusion consistently: That the main functions that cause bullwhip effect are need forecasts, batches ordering, and fluctuations in price, rational decision-making, and time deferment and in coordination, supply chain structure. Many scholars have done quantifying study on bullwhip effect, but no one has think of the element that the ordering enterprises may magnify their demand and calculated the effect in the whole supply chain. This paper leads into the magnifying rate of market demand based on the research of Lee and Chen and others, quantifying the overstock caused by bullwhip effect in the whole supply chain, and contrast the condition under strategic alliance pattern and the condition under non-strategic alliance pattern, then testified the first pattern can bring benefits to enterprises and it is useful for saving resources, which can serve as good apocalypse for managers and entrepreneurs in supply chain.