Research Of Retail Stage’s Bullwhip Effect In Supply Chain Based On Demand Correlation

Based on former research on single-supplier-single-supplier supply chain’sbullwhip effect, this paper extends the single-retailer structure into two-retailerstructure for further study. Considering the supplier will focus on performance of thewhole retailer stage when the supplier use the centralized inventory management, thepaper discloses the forming mechanism and main causes of retailer stage’s bullwhipeffect in such supply chains. Through analysis the paper summarizes relatedmanagement meanings which are helpful for supply chain members, especiallysuppliers, to better understand and control bullwhip effect.The paper discusses the effect of demand correlation between the two retailers onthe bullwhip effect of retailer stage by analyzing the forming mechanism and maincauses of retailer stage’s bullwhip effect.After determine the bullwhip effect of retailer stage, the paper discusses therelation between each retailer’s bullwhip effect and retailer stage’s bullwhip effect bycomparing the contribution of each retailer’s bullwhip effect into the retailer stage’s.In addition, the paper analyzes the causes related with bullwhip effect, includingretailers’ demand correlation, retailers’ lead time, forecasting period of movingaverage method, etc. The paper analyzes the effect direction and degree of retailers’demand correlation on bullwhip effect. At the same time, the paper analyzes the effectof lead time and forecasting period on bullwhip effect, and compares these two factors.At last, the paper provides several specific management advises.