The issue of bullwhip-effect evaluating in supply chain management

• Main Authors: Anna Vokhmyanina, Marina Zhuravskaya, Waldemar Osmólski
• Format: Article
• Language: English
• Published: Poznań School of Logistics 2018-06-01
• Series: LogForum
• Subjects: supply chain; uncertainty; bullwhip-effect; variation in order sizes; regression coefficient; t-statistics; order size dynamics
• Online Access: http://www.logforum.net/vol14/issue2/no2/14_2_2_18.pdf

Background: This article deals with the quantitative evaluation of the bullwhip effect in supply chains. A literature review was carried out and it was revealed that there is no general approach to quantifying the bullwhip effect. In the article, a more precise concept of the bullwhip effect is proposed from the point of view of the natural-scientific approach. Methods: A methodology for quantifying the bullwhip effect as a coefficient of linear regression was developed, characterising the dependence on the location of a link in supply chains, which can be used to adjust its operational work. Results: The stability of the proposed model is confirmed by the results of its implementation in production in several sectors of the economy, distinguished by the number of units and number of study periods, which demonstrates its potential for use in the distribution system. Conclusions: The main reason for the existence of the bullwhip effect is the unreliability of forecasts, which ultimately reduces the efficiency of inventory planning in supply chains and extensive logistics systems. Reducing the negative impact of the bullwhip effect can be achieved by using more advanced forecasting models and the quantitative assessment method used in this study, to adjust reserve stocks in supply chain links.