Measure of bullwhip effect : the cases of dual sourcing and VAR (1) demand process

By: Call Number: AIT Diss no.ISE-13-05 Contributor(s): Material type: SeriesSeries: Asian Institute of Technology. Dissertation ; no. ISE-13-05Publication details: Pathum Thani, Thailand : Asian Institute of Technology, 2013Description: 74 p. : ill. + 1 online resourceSubject(s): Online resources: Dissertation note: Thesis (Ph.D.) - Asian Institute of Technology, 2013 Summary: The bullwhip effect in which the demand in the upstream section of a supply chain is distorted is a very important issue in supply chain management. However, most of the existing research studies have investigated the bullwhip effect under a single sourcing environment. In this research the behavior of the bullwhip effect under a dual sourcing environment for a first-order autoregressive [AR(1)] demand process will be examined using analytical approach for a three-stage supply chain consisting of a retailer, two distributors and a supplier. The conditions under which the bullwhip effect is reduced in the dual sourcing environment in comparison to that of the single sourcing environment are subsequently derived. In addition, we also investigate the situation when the incoming demand process is a first-order bivariate vector autoregression [VAR(1)] process for a two-stage supply chain consisting of a supplier and two retailers in order to examine the effects of the correlation parameters of demand process, the correlation coefficient between the two error terms, and the variances of the error terms.
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A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Industrial and Manufacturing Engineering, School of Engineering and Technology

Thesis (Ph.D.) - Asian Institute of Technology, 2013

The bullwhip effect in which the demand in the upstream section of a supply chain is distorted is a very important issue in supply chain management. However, most of the existing research studies have investigated the bullwhip effect under a single sourcing environment. In this research the behavior of the bullwhip effect under a dual sourcing environment for a first-order autoregressive [AR(1)] demand process will be examined using analytical approach for a three-stage supply chain consisting of a retailer, two distributors and a supplier. The conditions under which the bullwhip effect is reduced in the dual sourcing environment in comparison to that of the single sourcing environment are subsequently derived. In addition, we also investigate the situation when the incoming demand process is a first-order bivariate vector autoregression [VAR(1)] process for a two-stage supply chain consisting of a supplier and two retailers in order to examine the effects of the correlation parameters of demand process, the correlation coefficient between the two error terms, and the variances of the error terms.

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