Modeling And Simulating The Bullwhip Effect In The Supply Chain Based On Control Theory

The bullwhip effect is a very necessary topic for us to study. Traditional research on bullwhip effect can be divided into three aspects: firstly, the existence of the effect; secondly, related quantitative analysis; thirdly, how to control the effect and optimize its stability, while the major method for quantification of the bullwhip effect is basing on probability and statistics, in which variance ratio of the orders is defined as the measurement of the bullwhip effect. Study on the bullwhip effect based on control theory has been a focus in supply chain management in recent years. In supply chain, how to analyze the supply chain, how to remove and control the bullwhip effect, how to improve economic gain and social benefit of supply chain system, how to design logistics process, information channel, make decision of inventory and production etc., in order to control the bullwhip effect in supply chain, by the smooth production, lower stock, higher customer satisfaction level, to strengthen the competition ability of the enterprises, it is a very important value of theoretical research and guiding practice.Based on the review of the overseas and domestic study, bullwhip effect problem and its control methods in supply chain are analyzed and studied. The main works in this paper are considered:(1) Analysis of the bullwhip effect problem in supply chain. The existence of bullwhip effect, the causes and impacts of bullwhip effect, the research methods and VMI of bullwhip effect are analyzed.(2) Analysis of bullwhip effect in supply chain and VMI. Based on statistics methods, impacts of exponential smoothing forecasts method, moving average methods and information sharing on the bullwhip are analyzed.(3) Analysis of the transfer functions of bullwhip effect in supply chain. The transfer function of supply chain system and bullwhip effect is studied. The dynamic performances of supply chain are analyzed. The dynamic impacts of information sharing policy on bullwhip effect are analyzed. Simulations of the supply chain system are performed using Matlab/Simulink.(4) Based on control theory, a more smoothing decision rule is analyzed. Using the Matlab/Simulink simulation, it proves that information sharing method can greatly reduced the bullwhip effect.