Inventory cost consequences of variability demand process within a multi-echelon supply chain

Francisco Campuzano Bolarín (Author), Andrej Lisec (Author), Francisco Cruz Lario Esteban (Author)

Abstract

The bullwhip effect (Lee et al, 1997a) is a known supply chain phenomenon where small variations in end item demand create oscillations that amplify throughout the chain. Different price elasticity of demand influence different changes of demand when prices of items are changing on the time horizon. The variance of the orders at the end user placed on suppliers or on manufacturer increases with the orders flow upstream in the logistics chain. This creates harmful consequences in inventory levels and all kind of inventory costs that may affect added value of activities along the logistics chain and finally affect Net Present Value of all activities in the chain. Traditional model of dynamic supply chain structures is used for this particular study, based on the seminal work of Forrester Diagrams (Forrester 1961). Simulation platform for supply chain management at stochastic demand developed by Campuzano (2006) has been used. VENSIM Simulation Software was previously used for developing these supply chain dynamic models. In the development platform generalised supply chain models are constructed graphically and also analytically. Our study here is to get a dipper insight into the processes in a logistics chain, measuring the inventory cost consequences due to variability demand amplification.

Keywords

učinek biča;naraščanje potreb;logistične verige;dinamika sistemov;bullwhip effect;demand amplification;logistic chain;system dynamics;

Data

Language:	English
Year of publishing:	2008
Typology:	1.01 - Original Scientific Article
Organization:	UM FL - Faculty of Logistics
UDC:	656:070.33
COBISS:	512036669
ISSN:	2232-4968
Views:	1121
Downloads:	33
Average score:	0 (0 votes)
Metadata:

Other data

Secondary language:	English
Secondary keywords:	učinek biča;naraščanje potreb;logistične verige;dinamika sistemov;
URN:	URN:SI:UM:
Pages:	12 str.
Volume:	ǂVol. ǂ1
Issue:	ǂiss. ǂ3
Chronology:	2008
Keywords (UDC):	applied sciences;medicine;technology;uporabne znanosti;medicina;tehnika;communication and transport industries;accountancy;business management;public relations;komunikacije in transport;knjigovodstvo;poslovni menedžment;stiki z javnostjo;transport and postal services;traffic organization and control;transportne in poštne usluge;organizacija in kontrola prometa;science and knowledge;organization;computer science;information;documentation;librarianship;institutions;publications;znanost in znanje;organizacije;informacije;dokumentacija;bibliotekarstvo;institucije;publikacije;newspapers;the press;journalism;časniki;tisk;
ID:	1435588