Avoiding demand amplification phenomenon via hi-tech application: A what-if supply chain analysis

Abstract

The well-known deleterious effect of the amplification of variance of order rates in multi-echelon systems, commonly known as demand amplification phenomenon or bullwhip effect, still presents new challenges and continues to fascinate the operations management community. Recently this research field is focusing on the study of robustness of bullwhip avoidance techniques under uncertainty, as environmental conditions often determine variations in processes, with regards to production and delivery lead time, and variations in the parameters of the decision policies. This work aims at quantifying the efficacy of bullwhip dampening techniques and at verifying this efficacy against variations in the business context. The original value of the research consists in showing that the bullwhip dampening efficacy, provided by hi-tech applications and practices of supply chain collaborations, persists when operational parameters vary within a certain range. © 2010 Springer-Verlag Berlin Heidelberg.