Study On The Cause And Decrease Method Of Bullwhip Effect In Supply Chain

Bullwhip effect has a great disadvantage for supply chain management, it arises a demand information distortion and then lead the distortion larger gradually, as a result the problem such as overstock, increased extra cost and the customer's demand dissatisfied in time will be occurred. Bullwhip cannot be erased radically, but can be weakened by taking some methods, Therefore, the study on the cause and reduce the bullwhip effect in supply chain reveals certain value in theory and practice field.Base on the structure, character of the supply chain and the theory of the supply chain management, we analyze the relation between the uncertainty of the supply chain and the stock, and build a mathematical model on bullwhip effect by using the difference to describe the fluctuate of the demand. Through deducing and analyzing the math model , the thesis draw a conclusion that the main causes of the bullwhip effect include the distribution and the game when out of stock , demand forecast update, order batching, price variation ,a lead time for order and a lack of correspond among the players etc.After analyzed the causes of the bullwhip effect, the thesis first provides that the Vendor Managed Inventory(VMI) and information sharing between players can effectively reduce the bullwhip effect and demonstrate this conclusion by a graph. Then the pattern of the decision-making system when applying VMI and the pattern of the information-sharing system are built, the latter includes information transfer pattern, third party pattern and information center pattern. At last the thesis discusses the risk of the information and the management of the risk of the information in supply chain and suggests the ways how to prevent it happens.