Research On The Bullwhip Effect Behavior And Its Chaotic Characteristics In A Multilevel Supply Chain

Since discovered,the bullwhip effect has been a hot topic in the supply chain management,and also made a puzzle for the smooth operation of the supply chain.The bullwhip effect affects the effectiveness of the entire supply chain and each node enterprise,and results in unnecessary operating costs.So,the research on supply chain bullwhip effect has important theoretical and practical significance in order to improve supply chain efficiency,enhance customer service levels,and thus enhance the market competitiveness of enterprises.To better understand the mechanism of the bullwhip effect and control methods,this paper will make futher research on bullwhip effect according to the existing theory and practice.Our thesis establishes a supply chain model with one supplier and two retailers.In the two-stage supply chain,under the condition of Order-Up-To inventory policy,we forecast the lead-time demand by using three forecasting methods of MMSE,MA and ES.This thesis studies the the impact mechanism of market share,price fluctuations and the behavior of consumer forecasting price on the bullwhip effect.For multi-level supply chain,this thesis analyzes the chaotic characteristics of supply chain system by Lyapunov exponent.Our study found that in a mature market,regardless of demand forecasting methods,if a retailer had a longer lead time,then the greater its market share,the greater the bullwhip effect.In the choice of demand forecasting methods,business managers should take full account of autoregressive coefficients of its demand model.When the autoregressive coefficient is larger,they should select the MA forecasting method,otherwise,they will select the MMSE forecasting method for reducing or even eliminating the bullwhip effect effectively.Price volatility is an important factor affecting the bullwhip effect.The study found that the behavior of consumer forecasting price can weaken the system bullwhip effect,to some extent.When the extent of consumers concerning about the historical price volatility is higher,increasing of the price-sensitive coefficient can weaken the bullwhip effect.For the retailer with a longer lead time,reducing the random fluctuations of their demand also can reduce the system bullwhip effect.If the consistency of price volatility between two retailers is worse,the higher relative price fluctuations of the retailer which has a longer lead time,the stronger the bullwhip effect.Meanwhile,for the multi-level supply chain with N-level distributors,we study the chaotic characteristics of the complex system by calculating Lyapunov exponent of bullwhip effect.The results show that chaos in the supply chain system is closely related to lead time of each distributor.When the lead time of the last distributor is larger than that of the first distributor,the Lyapunov exponent can be positive meaning that the nonlinear dynamic system will appear chaos in the supply chain.Managers should effectively inhibit the chaos phenomenon by controlling the lead time of upstream enterprises.