Analyzing the behavior of the bullwhip effect considering different distribution systems

Abstract

Recently, researchers have shown increased interest in quantifying the bullwhip effect, and several attempts have been made to alleviate this phenomenon within supply chain man- agement; however, absent from the current literature surrounding this topic is an in-depth analysis of the impact of different distribution systems, particularly cross-docking systems, upon the behavior of the bullwhip effect. This research aims to investigate the measure of the bullwhip effect in three different supply-chains; (I) with a central warehouse, (II) with a cross-docking system, and (III) without any distribution systems. These three different supply chains are subsequently analyzed to discover which supply chain helps reduce the bullwhip effect more. In doing so, the reasoning here is based on the premise that the demand process follows a mixed autoregressive-moving average model and all the stages employ the base stock policy for inventory replenishment, if necessary. In addition, the above mentioned supply chains are assumed to have two members in the retailer stage, with a different market share of the customer demand. It was found that factors such as lead time, market share of each retailer, autoregressive coefficient and moving average pa- rameter contribute to the selection of the most effective distribution system