The impact of exponential smoothing forecasts on the bullwhip effect

Frank Chen, Jennifer K. Ryan and David Simchi‐Levi

Naval Research Logistics (NRL), 2000, vol. 47, issue 4, 269-286

Abstract: An important phenomenon often observed in supply chain management, known as the bullwhip effect, implies that demand variability increases as one moves up the supply chain, i.e., as one moves away from customer demand. In this paper we quantify this effect for simple, two‐stage, supply chains consisting of a single retailer and a single manufacturer. We demonstrate that the use of an exponential smoothing forecast by the retailer can cause the bullwhip effect and contrast these results with the increase in variability due to the use of a moving average forecast. We consider two types of demand processes, a correlated demand process and a demand process with a linear trend. We then discuss several important managerial insights that can be drawn from this research. © 2000 John Wiley & Sons, Inc. Naval Research Logistics 47: 269–286, 2000

Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
https://doi.org/10.1002/(SICI)1520-6750(200006)47:43.0.CO;2-Q

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:navres:v:47:y:2000:i:4:p:269-286

Access Statistics for this article

More articles in Naval Research Logistics (NRL) from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().