Green Bullwhip Effect Cost Simulation in Distribution Networks

Abstract

Sustainability is a modern day requirement toward global supply chains and also in most cases an efficiency challenge for logistic companies. Complementary objectives in decreasing carbon footprint and costs of transports are assumed or claimed, e.g., for an increase in load factors, reduction in transport intervals, and other green transport approaches in scheduling and tour planning. And also conflicting objectives can be identified with a decrease in flexibility due to lower transport intervals and higher load factors, as this research approach shows with a meta-heuristic approach for delivery transports under uncertainty of demand conditions. This uncertainty regarding increasing cost of necessary changes in transport planning due to probabilistic demand changes can be seen as excess flexibility costs. These can lead to increased security stock levels based on bullwhip behavior of logistics deciders, creating an additional green bullwhip effect for supposed sustainable supply chains. Therefore, the overall business and sustainability improvement in measures such as, e.g., reduced delivery intervals are to be evaluated taking this new perspective into account.