Reducing the bullwhip effect from signal demand of hybrid artificial neural network models of supply chain in Indonesia

Abstract

The bullwhip effect becomes a problem for the factory to manage the inventory policy in the warehouse. This study proposes to reduce the bullwhip effect through signal demand forecast from hybrid artificial neural network (ANN) models. The original ANN is combined with analytical hierarchy process (AHP), Monte Carlo simulation (MC), and geometric random distribution at the parts of the input weight and input bias from the ANN. The variation of forecast signal demands from the hybrid models are used to reduce the variance from the signal customer demands. The results from this study, AHP(iw)ANN(b) has the smallest mean square error (MSE) from signal demands, it implys that the variance signal demands should reduce the bullwhip effect (BWE) in the supply chain. It can be concluded that the small variance signal demand should reduce the bullwhip effect in the supply chain. (c) 2017 The Authors. Published by IASE.