Centralized versus decentralized inventory control in supply chains and the bullwhip effect

Zhan Qu and Horst Raff

This paper constructs a model of a supply chain to examine how demand volatility is passed upstream through the chain. In particular, we seek to determine how likely it is that the chain experiences a bullwhip effect, where the variance of the upstream firms’ production exceeds the variance of the upstream firm’s sales. We show that the bullwhip effect is more likely to occur and is greater in size in supply chains in which inventory control is centralized rather than decentralized, that is, exercised by the downstream firm.

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Year of publication:	[2017]
Authors:	Zhan, Qu ; Raff, Horst
Publisher:	[Kiel] : Kiel Centre for Globalization
Subject:	bullwhip effect \| production smoothing \| inventory \| supply chain \| demand uncertainty \| stockout avoidance \| Theorie \| Theory \| Bullwhip-Effekt \| Bullwhip effect \| Lieferkette \| Supply chain \| Lagermanagement \| Warehouse management \| Lagerhaltungsmodell \| Inventory model

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Extent:	1 Online-Ressource (circa 25 Seiten)
Series:	KCG working paper. - [Kiel] : [KCG], ZDB-ID 2925625-2. - Vol. no. 6 (November 2017)
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	hdl:10419/181361 [Handle]
Classification:	L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration ; L14 - Transactional Relationships; Contracts and Reputation; Networks ; M11 - Production Management
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011820911