Delayed demand information and dampened bullwhip effect

Authors:
Xiaolong Zhang
Affiliations:
Department of Information Systems and Decision Sciences, Information System and Science, Fairleigh Dickinson University, 285 Madison Ave, The Mansion M-MS2-04, Madison, NJ 07940, USA
Venue:
Operations Research Letters
Year:
2005

Citing 6
Cited 0

Information distortion in a supply chain: the bullwhip effect

Management Science - Special issue on frontier research in manufacturing and logistics
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Abstract

This paper considers an inventory setting in which the historical data used for demand forecasting is delayed. When the replenishment is controlled via an order-up-to policy, we show that such delays reduce the variability of the order history and dampen the bullwhip effect. We discuss the intuition behind this result.