Abstract
While considering the competition effect and market share, this study discusses how the cash flow bullwhip effect (CFBE) is impacted in two-product and two-parallel supply chain systems by comparing the situation that it has one kind of product in two-level supply chain (SC). Specifically, the study aimed to examine two-product and two-parallel SC systems that include two suppliers and two retailers. Assuming that the demand function is a linear relationship of price self-sensitivity coefficient and price cross-sensitivity coefficient, which is an AR(1) process, two retailers share the demand. After that, the quantitative equation of the CFBE was deduced from two-product and two-parallel SC systems. Finally, we get the condition that the competition effect and the market share increase or decrease the CFBE, which was in contrast to the situation without the competition effect and the market share. The paper suggested that the manager can cooperate with their partner if two products are substitutable. On the other hand, the firm should improve the forecasting accuracy of the customer’s demand and improve the service quality so that it can increase the market share and reduce the CFBE in two-parallel SC systems.
Highlights
E higher the Huawei mobile phone’s retailing price is, the lower its market demand is, and vice versa. e product substitutability of Huawei and Apple, if the Apple mobile phone’s retailing price is so high, some consumers can turn to Huawei, and its market share increases and vice versa
E above studies have a lot of limitations: (1) the research concentrates on two-level or multilevel supply chain (SC), and fewer papers evaluate two-parallel SC systems which include two suppliers and two retailers; (2) many scholars assume the trade of one type of product between two enterprises, and few consider the trade of two different types of products that are substitutable between them; (3) many papers discuss the influence of lead times, and other factors on the bullwhip effect (BE), while few study the impact of the above variables on the cash flow bullwhip effect (CFBE)
In contrast to previous studies, we provide an alternative perspective that controls the BE, the IBE, and the CFBE using a statistical approach. e contribution is that: (1) the object involved two-product and two-parallel SC systems consisting of two suppliers and two retailers; (2) this study introduced the relevant factors in the model. en, we obtained the equation of CFBE in two-product and twoparallel SC systems; and (3) we analyzed the condition that the competition effect and the market share could increase or reduce the CFBE
Summary
In SCM, the BE means the phenomenon that demand enlargement as up to in SC, i.e., from the down demand to upstream (Lee et al [1]). is phenomenon can lead to substantial problems that affect supply chain performance, such as superfluous inventory, and high costs for corrections (Lee et al [10]). e BE has become one of the main obstacles affecting the efficiency of the SC. Ma et al [38] built the equation of the BE on product orders and inventory using the MMSE, ES, and MA forecasting techniques with the price sensitivity demand modeling. E above studies have a lot of limitations: (1) the research concentrates on two-level or multilevel SC, and fewer papers evaluate two-parallel SC systems which include two suppliers and two retailers; (2) many scholars assume the trade of one type of product between two enterprises, and few consider the trade of two different types of products that are substitutable between them; (3) many papers discuss the influence of lead times, and other factors on the BE, while few study the impact of the above variables on the CFBE. This study found that the CFBE could be reduced, but only when the price cross-sensitivity coefficient was very small; otherwise, the CFBE always existed
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
