Study On Bullwhip Effect Issues With Inventory Management

Since the 1980s, growing market competition, increasing demand for personalized products and services, rapid development of high-tech, which all contributed to companies from a purely competitive relationship change into mutual cooperation relationship. In this context supply chain management was put forward, and aroused widespread concern after more than 20-year development. Bullwhip effect as a unique phenomenon in supply chain management caused a huge loss of efficiency of supply chain, such as misleading the production plan, excess inventory, the illusion for increased demand, etc. Therefore, bullwhip effect aroused widespread concern and attention. So the research of bullwhip effect has great theoretical and practical significance.This thesis analyzes the bullwhip effect and inventory management with qualitative and quantitative methods, and the bullwhip effect of the traditional inventory management has been studied from various aspects. The main ideas and original points are as follows:Firstly, systematically and comprehensively summed up the study of the bullwhip effect which other people have done, and from eight aspects analyzed the causes of the bullwhip effect existed in general supply chain, but also simply explained the causes of the bullwhip effect existed from economic aspects.Secondly, based on traditional inventory management, with different forecast methods analyzed the bullwhip effect of information in forecasting process and in dealing process. When the Lead Time is L, in the predicting process, using moving average method and the minimum mean squared error method don't produce the bullwhip effect, but using an exponential smoothing method mostly produces the bullwhip effect. In the dealing effect, all of these three types of forecasting methods have the bullwhip effect. Combined with the research of the elder generation, in the multi-stage supply chain when information transfers upward, will have different order process for different demanding processes, whether information will continue to amplified distortedly has a close relation to demanding process. For the supply chain comprises a manufacturer and a number of retailers, the relationship of retailers can strengthen the bullwhip effect, and information may also have tended to stabilized. Thirdly, this thesis discusses the bullwhip effect of two classic inventory management model VMI and JMI in supply chain context. Compared with the traditional inventory management model, the two of high-tech and high-cooperated inventory management models indeed decrease the bullwhip effect, but not completely eliminated.