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Supply Chain Management: Issues and Models Lecture 4: Bullwhip Effect. Prof. Dr. Jinxing Xie Department of Mathematical Sciences Tsinghua University, Beijing 100084, China http://faculty.math.tsinghua.edu.cn/~jxie Email: jxie@ math.tsinghua.edu.cn
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Supply Chain Management:Issues and ModelsLecture 4: Bullwhip Effect Prof. Dr. Jinxing Xie Department of Mathematical Sciences Tsinghua University, Beijing 100084, China http://faculty.math.tsinghua.edu.cn/~jxie Email: jxie@ math.tsinghua.edu.cn Voice: (86-10)62787812 Fax: (86-10)62785847 Office: Rm. 1308, New Science Building
i) Barilla (意大利面条制造商) 工厂 销售总公司 顾客 分销商 零售商 ii) P & G 3M (胶带) 顾客 P&G 批发商 零售商 信息流 物流 牛鞭效应(例)
Four sources of the bullwhip effect: Demand signal processing Rationing game Order batching Price variation
Summary Bullwhip effect exists even when the leadtime is zero Other causes of bullwhip effects: omitted here Sharing information is needed?
Supplier (Manufacturer) Demand Retailer Basic Assumptions • The demand is assumed to be a simple autocorrelated AR(1) process • (2.1) • d > 0, -1<<1, and is i.i.d. normally distributed with mean zero and variance 2. • << d
Benefits of information sharing Comparing (3.10) with (3.13), one can quantify the benefits of information sharing: • Inventory level; • Cost evaluation
Similar methods can be used to • Analyze the case when forecasting is used • Raghunathan S. “Information sharing in a supply chain: a note on its value when demand is non-stationary”. Management Science, April 2001, 605-610. • Analyze the value of advance demand information (the value of time) • Zhao X., Xie J. and Wei J. The Impact of Early Order Commitment on the Performance of a Simple Supply Chain. Working paper, 2002, Chinese University of Hong Kong.