Controlling replenishment rule induced bullwhip via good systems design

Abstract

Demand amplification (or bullwhip as it is now popularly called) is not a new phenomenon. Industry typically has to cope with bullwhip measured not just in terms of the 2:1 amplification in orders which is frequently encountered across a single echelon, but sometimes it is as high as 20:1 across the extended enterprise. In this Chapter we consider how bullwhip due to various Forrester effects may be avoided. This leads to our exploitation of a particular Replenishment Rule already widely used in industry and for which analytical formulae for bullwhip generation and inventory variance have been recently derived.

Publication
In “The bullwhip effect in supply chains: A review of methods, components and practical cases”, edited by O.A. Carranza Torres and F. Villegas Morán, Palgrave Macmillan, London, 95-106. ISBN: 978-1-4039-9858-3