The inventory bullwhip effect in the online retail supply chain considering the price discount based on different forecasting methods

Abstract

With the improvement of the new generation information technology, and the development of online economy, the customer behavior has gradually changed. The online economy has gradually become a new economic growth point. Many online platforms attract customers to purchase new products through different kinds of price discounts. In this article, we discuss the inventory bullwhip effect (IBE) in an online retail supply chain (ORSC) considering the price discount based on the different forecasting methods. Moreover, we discuss the influence of them on the IBE. When the price discount, the moving average forecasting method (MA), the exponential smoothing forecasting method (ES), and the minimum mean squared error forecasting method (MMSE) are considered, we consider an ORSC including of a manufacturer and an online platform, and the quantitative models of the BE and the IBE are discussed. This article finds that when the price sensitivity coefficient is very low, the online platform’s IBE is the lowest when the online platform adopts the MMSE method. Moreover, when the price discount gradually increases, the IBE of the online platform is also increasing. Moreover, it is gradually increasing when the expectation price difference coefficient becomes gradually increasing.