Simulation-Based Statistical Analysis of the Bullwhip Effect in Supply Chains

Proceedings of the 18th European Simulation Multiconference (ESM’2004) 2004
Jurijs Merkurjevs, Jūlija Petuhova, Māris Buiķis

The paper proposes both statistical and simulation-based analysis and evaluation of the bullwhip effect in supply chains. The demand distortion, called the bullwhip effect, is considered as an important characteristic of supply chain operation stability. A mathematical justification of the stochastic demand as a cause of the bullwhip effect is discussed. Results of simulation studies to analyse the impact of information sharing strategies on the magnification of demand fluctuations as orders move up the supply chain are presented. An approach to measuring the bullwhip effect for the entire supply chain is proposed and practically applied for comparison of different supply chain’s configurations.

Keywords
Bullwhip effect, Simulation, Statistical analysis

Merkurjevs, J., Petuhova, J., Buiķis, M. Simulation-Based Statistical Analysis of the Bullwhip Effect in Supply Chains. In: Proceedings of the 18th European Simulation Multiconference (ESM’2004), Germany, Magdeburg, 13 Jun-16 Oct., 2004. Magdeburg: Society for Modelling and Simulation International, 2004, pp.301-307.

Publication language
English (en)